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Telecoms report outrageous on the Kiwi Share

Media Release October 4th, 2000

Telecoms report gratifying on many counts; outrageous on the Kiwi Share

The Employers & Manufacturers Association (Northern) says the Telecommunications Inquiry Report is gratifying on many counts but outrageous on the subsidy that rural New Zealand would receive from the country's town and city dwellers.

"Many recommendations of the telecommunications inquiry report are very pleasing," said Alasdair Thompson, EMA's chief executive, "but adopting the recommendations relating to the Universal Service Obligation of the Kiwi Share would have repercussions that town and city businesses just will not wear.

"Our 5000 members are all heavy users telecommunications services, an expense which is becoming second only to employee salaries and wages.

"We are pleased that the complex issues the Inquiry had to consider are expressed very clearly.

"We want to congratulate the Inquiry on the prominent recognition they give electronic communications, that they are "central to the economy, the process of Government, and to the ability of New Zealanders to participate fully in the information society and in the global economy."

"If we want to maintain our standard of living we had better get our telecommunications environment right.

"The Report provides a strong start to the process of building confidence once again in investing in our telecommunications infrastructure.

"We are satisfied with the recommendation to establish a light handed regulatory environment with an Electronics Communications Commissioner and the Electronic Communications Industry Forum.

"The recommendation that all services subject to regulation, and the industry itself, should be reviewed within specific time frames, is particularly welcome. We advocated this as a necessary backstop to ensure regulatory 'creep' did not occur.

"However the recommendations surrounding the Kiwi Share's Universal Service Obligation are totally unsatisfactory. The Kiwis Share should be canned.

"At present town and city users of telecommunications subsidise rural New Zealand's phone use to the tune of $167 million, which is Telecom's own figure.

"Requiring Telecom to steadily invest so rural New Zealand can have high speed internet access will cost a further $500 million and maintain Telecom's monopoly across many rural areas.

"This is absurd. Obliging Telecom to continue building monopoly services in areas with decreasing returns would keep on raising the subsidy that urban users would have to pay. Business users won't stand for it.

"We want to see telecommunications infrastructure implemented on a transparent, competitive basis to encourage the rapid uptake of the fast changing technology available.

"There are sound alternatives to the Report's recommendations on the Kiwi Share, including calling tenders on a regional basis to provide universal service, which would encourage creative new solutions.

"Besides, the rural sector expects to invest its improved returns at present on getting better services to boost its productivity."

Further comments: Alasdair Thompson tel 09 367 0911 (bus) 09 303 3951 (hme) 025 982 024

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