TelstraClear, Tuanz, Internet NZ, others say they need more than 10 minutes to make oral submissions on a bill that would let the government buy into Telecom and/or Telecom buy into lines or fibre companies without M&A scrutiny. Act could throw a c
Various contenders say they need more than 10 minutes to make submissions on the proposed legislation, which would let the government buy into Telecom and/or Telecom buy into lines or fibre companies without M&A scrutiny.
Submitters will be given 10 minutes to make their case when a controversial new telecommunications law goes before the finance and expenditure select committee tomorrow and Thursday.
A coalition of opponents, ranging from consumer lobby groups InternetNZ and Tuanz to TelstraClear and, more predictably, Labour, have called the bill’s accelerated timetable undemocratic.
The Telecommunications Amendment (TSO, Broadband and Other Matters) Bill, boosted in the New Year by a Supplementary Order Paper, is a complex piece of legislation.
It ranges from changes in property access rules need to facilitate the government’s $1.35 billion ultrafast broadband (UFB) initiative to regulatory changes required for the $300 million rural broadband initiative to provisions that allow the Crown to buy Telecom shares or assets and/or Telecom to buy into a local lines or fibre company without the usual M&A scrutiny – seen by some analysts as the precursor to a “grand alliance” between Telecom, or a spun-off Chorus – and lines companies that will form the ultimate shape of the UFB.
"We take our industry, this bill and the parliamentary process seriously,” TelstraClear chief executive Alan Freeth said. “Clearly, this Government doesn't. It's taken the industry 20 years to catch up with the rest of the world. With just 10 minutes before the Select Committee, 20 years of progress could be destroyed."
InternetNZ and Tuanz share Labour’s concerns about the bill’s compressed timetable, and what they see as the secretive nature of all discussion surrounding the UFB.
Tuanz has also picked up on Labour communications spokesperson Clare Curran’s point that the bill sets up Crown Fibre Holdings as both an investor in the UFB and what “de facto regulator”.
All three want the so-called “regulatory holiday” or ten-year “forbearance” from Commerce Commission scrutiny removed from the legislation.
Steven Joyce – the minister responsible for the bill - has previously called the regulatory holiday a necessary pragmatic measure to attract private investment.
Today, the minister was also unmoved by the claims that select committee hearings would be too rushed.
Extra time - maybe
Mr Joyce told NBR that beyond the 10 minutes allocated to each oral submission, “additional time can be provided if necessary”. Whether extra time was allocated would be up to the committee.
The finance and expenditure select committee has 12 members: five National MPs, four Labour MPs (including finance spokesman David Cunliffe, who joined Ms Curran in railing against the bill today), one Green MP, one Act MP and one Maori MP.
This is where it gets interesting
Excitingly - given National relies on him for a majoriy on the committee - Roger Douglas is the Act MP.
Although Act voted for the first reading of the bill. But Mr Douglas, who spoke for his party in the December 9 debate, said two members - himself and Heather Roy - had severe reservations about the legislation. Mr Douglas said it was an example of "politics being put ahead of markets."
NBR is inclined to believe that Mr Douglas - assuming he's present tomorrow - will be in favour of extending the game a little.
Previous opportunities
Mr Joyce said there had been a number of chances for parties including TelstraClear to comment on the proposed structural separation of Telecom, including workshops and discussion documents – all though these all did take place before the final Telecommunications Amendment Bill took shape.
Tuanz chief executive Paul Brislen has described the bill, and its supplementary order paper, as far more sweeping than any of the players had anticipated last year.
Crown Fibre Holdings as investor and sherif
Crown Fibre Holdings would not comment on Labour and Tuanz assertion that the bill put it in the conflicting roles of investor in, and regulator of, the UFB. As a policy matter, this was referred to the minister.
Mr Joyce replied that "Crown Fibre Holdings will set upfront contractual terms with successful UFB partners, including price caps, that will apply over the entire forbearance period and will not change during the period. However, CFH will not have an ongoing role as a regulator during that period.
"The Commerce Commission plays a central role as the independent regulatory agency. The commission will monitor and enforce the fibre open access Undertakings which require non-discrimination [the same pricing available to all retailers] by LFCs [local fibre companies]. The sanctions that the Commission is able to impose on LFCs are consistent with those set out under the existing copper regime. The commission will also continue to regulate copper prices.
"In addition, the commission is granted robust information disclosure powers under the Bill. This is a crucial tool for the Commission to monitor the LFC's behaviour in relation to the supply of fibre services."
