Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Vibrant fibre market more important than low prices: Adams

Vibrant fibre market more important than low prices, Adams says

By Pattrick Smellie

Feb. 8 (BusinessDesk) - The lowest price of broadband internet access is less important than ensuring consumers move as quickly as possible to high-speed fibre-based services, says Telecommunications Minister Amy Adams.

"I don't think the over-arching criteria in this is 'what is the cheapest option'," Adams told BusinessDesk. "If that was the case, we'd be sticking with dial-up. I don't think you'd find any consumer saying 'if dial-up's cheaper, let me have that'."

Her comments followed her announcement the government would accelerate its timetable for reviewing the regulatory regime for telecommunications services. The decision effectively neuters the Commerce Commission, which issued a draft determination late last year that could favour a longer life for the existing copper wire network by pricing it highly competitively with new fibre services.

That draft determination, which Adams described as a "curve ball", sparked protest from the key players in the ultra-fast broadband roll-out, including NZX-listed Chorus, whose share price recovered 12 percent today, immediately following Adams's announcement.

The government is subsidising a national roll-out of UFB and had already signalled it saw the commission's draft determination as "problematic."

"Carrying on the way it was would have changed the landscape in the way telecommunications services were priced and delivered and we saw some real risks around that in terms of market uncertainty and the market not looking to develop and promote high speed fibre products," said Adams.

"What became very clear is that this sort of uncertainty and decisions coming out that have really taken everyone by surprise are the last thing that anyone needs in this space.

"The legislation always provided that he (Telecommunications Commissioner Stephen Gale) would be superceded" in 2014, said Adams. "The question was whether we had this ongoing period of uncertainty and constantly changing rules.

"Given that where he has gone has been a bit of a curve ball for most people in the industry, we've said the time is right now to bring this forward and have a comprehensive look now."

Adams stressed she did not necessarily agree that UFB prices would be higher as a result of the government's intervention, but argued price was not the only factor to take into account in pursuing a policy to improve New Zealand's internet speeds.

"It's not a simple matter of saying 'if the wholesale price is low for the next 12 months, that's a good thing' because as I think what everyone knows is that what consumers end up paying is a factor of a whole lot of other things, chief amongst which is a competitive market in which everyone's in competing for that business," Adams said.

"The over-arching consideration is what is the best long term interests of telecommunications users and certainly when we have the debate about the government's commitment to UFB programmes, we got a very clear message from consumers: we need to move to fibre.

"In any sector, you can't look at one component part without factoring in the cost of moving to new technology. While of course we want to ensure that consumers are paying fair prices and no more than is necessary, it isn't about the cheapest way of connecting."

The government and commission reviews would not necessarily reach different conclusions and Adams said the commission process would continue on its own path while the government review occurred.

"I'm not interfering in his process," she said.

"Now the two are in parallel. He has his process and that's for him to work through and determine how he wants to handle that, but what we need is a much clearer, long term provision around how regulation of telecommunication services work as a whole rather than in disparate parts."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news