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Failure to meet wholesale broadband target

Failure to meet wholesale broadband target proves need for a new regulatory settlement

Media release – InternetNZ 2 February 2006

“Today’s announcement that Telecom has failed to meet its self imposed target for wholesale broadband uptake proves that competition is still a long way away for Kiwi consumers,” InternetNZ President Colin Jackson said today.

He was commenting on Telecom statistics showing that only 63,000 residential wholesale broadband connections were in use by 31 December 2005. Telecom had previously pledged to deliver at least 1/3 of 250,000 – 83,000 connections – by the end of last year.

“This is further clear evidence that the existing light-handed regulatory framework is not delivering a competitive marketplace for broadband services. Telecom is still by far the dominant provider, and only fundamental regulatory reform will deliver better prices and faster services for New Zealanders.

“While it is commendable that Telecom have exceeded their total target for connections, the effect of this is simply to reinforce their dominance in the market.

“Telecom’s wholesale commitment has not been met. The current regulatory framework has not delivered, and cannot do so. A radically different regulatory settlement is needed to deliver competition, lower prices and real broadband services to the market.

“The government has been clear for some time that it was taking Telecom’s 83,000 wholesale target seriously.

“In July last year, Hon David Cunliffe, Minister of Communications made the following comments:

‘Let me be very clear on this. This Government regards world-class broadband infrastructure as a critical national capability for the 21st century.’

‘[T]he Government regards a healthy and competitive broadband wholesaling market as essential. Telecom New Zealand's wholesaling commitment is important, and a response will follow if it is not met.’

“InternetNZ looks forward to the government’s response, when it announces decisions arising from its ongoing stakeholder review of telecommunications regulation,” concluded Colin Jackson.


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