UPDATED NOVEMBER 19: Crown Fibre Holdings (CFH) yesterday confirmed to NBR that it had yet to submit its first partner recommendations to cabinet, as per an October 31 deadline.What first like a couple of days' delay while i's were dotted and t's crossed,
UPDATED NOVEMBER 19: Crown Fibre Holdings (CFH) yesterday confirmed to NBR that it had yet to submit its first partner recommendations to cabinet, as per an October 31 deadline.
What first like a couple of days' delay while i's were dotted and t's crossed, is now starting to look like a serious hold-up.
In addition to the complications essayed in NBR's original story below (including whispers of under-resourcing, an interdepartmental Cold War, and a government mulling Telecom options beyond Crown Fibre Holdings' brief), CFH has become embroiled in a political mini-scandal over one of its board members, Murray Milner, doing contract work for Huawei.
The Chinese telecommunications equipment maker is angling to become a subcontractor to partners chosen by CFH.
NOVEMBER 15 As November ticks on, Crown Fibre Holdings (CFH), the state-owned company charged with selecting partners for the government's $1.35 billion ultrafast broadband (UFB project), has yet to meet its October 31 deadline to send partner recommendations to cabinet.
Yesterday, a spokesman told NBR that: "CFH will be making recommendations to ministers shortly and arrangements will be finalised after that".
Once recommendations are delivered, shareholding ministers Steven Joyce, Bill English and Simon Power can consider them of an open-ended amount of time - during which period the government will continue its parallel discussions with Telecom about its national bid.
Elements of Telecom's bid - including its proposed split into two separate companies, regulatory changes and possible tax breaks - fall outside CFH's mandate.
Relations between Crown Fibre Holdings, and the Ministry of Economic Development - charged with accessing Telecom's possible split, and the parallel $300 million rural broadband initiative - are frosty, one party
CFH's latest statement echoes its comments on November 3, when NBR revealed the agency had missed its cabinet deadline.
The state-owned company had been due to deliver recommendations to cabinet by the end of October following "priority negotiations" with its first brace of bidders: Whangarei lines company Northpower, The Central North Island Fibre Consortium; and Timaru lines company Alpine Energy.
Despite earlier media reports indicating the deadline would be met, it has whistled by.
One industry insider told NBR that CFH has two main issues: "under-resourcing and an unclear mandate."
Expanding on resourcing, he said, "If they go down the thirty Local Fibre Companies path, they'll need at least thirty capable account/relationship managers [double CFH's current total staff] but those people dont exist".
The original target date for sending contracts to cabinet had already been pushed from September to October, then refined again to include only negotiations in three regions.
So what? So everything
Some would argue that a few weeks' delay is neither here nor there in a project with a 10-year timeframe.
But for Telecom - which has placed a (on the face-of-it) all-or-nothing national bid, every delayed CFH deadline gives more precious moments to reach its desired "heads of agreement" with the government, going over Crown Fibre Holdings' head to reach a broad-ranging deal that also takes in structural separation, tax breaks, regulatory breaks and other elements outside CFH's mandate.
According to the tender's fine print, even if CFH delivers its recommendations on the first three (of 30) Local Fibre Company regions today, Telecom can still buy more time - for cabinet can leave CFH's report on the table for an undefined period (or, indeed, choose to ignore it altogether and go its own way with some kind of compromise deal).
Yet in reality, political pressure is mounting. If Telecom is to reach some kind of accommodation with the government, it must do it soon. Now, it has a touch more time.
READ ALSO: Telecom softens up shareholders with presentation on possible split
