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ACT – Cullen’s Telecom Recommendations Su

"Spare a thought for Michael Cullen who had to blow the whistle on the Telecommunications Report," said ACT Commerce Spokesman, Stephen Franks today.

"He has acted sensibly and promptly to limit the damage. He was right not to wait for the Minister of Commerce who should have been thinking through the issues and headed them off.

"The alarms should have rung for Mr Swain when he got the report under embargo. The June draft gave fair warning.

“Some things cry out even to those with little commercial experience.

"The weird absence from the report of strong consciousness that there are serious property rights and rule of law issues in a decree to rewrite contracts without agreement, and to give over $300m per year free to competitors and customers, by confiscation from Telecom.

“The claim of "light handed regulation" against a cursory look at the extraordinary powers proposed for a regulatory telecommunications commissar.

“The strange expectation that future investors would continue to put new technology in a country that feels free to simply decree that a facilities owner must provide them at cost price or below - no profit - if they prove to be vital to competitors or to a chunk of voters.

"The report has got it all backwards. We should want attractive returns for those who upgrade and duplicate the hardware if necessary. Instead the report wants to transfer the facilities profits to the resellers. They just take capacity of existing facilities and put their invoicing and rate and customer relations brands and services over them. This could make the resellers more into parasites, despite the value they can bring The report hopes that competition among the resellers would trickle through some of the expropriated profits to the end users.

"Mr Swain should have been put on enquiry by the integrity of Federated Farmers. They question this gift horse. The report would give them looted gains from uncompensated forced investment in new rural wires. Property principles are more important to land owners than the initial rural gain from an uncompensated Telecom. They know from the Resource Management Act what it means to be on the paying end of regulatory expropriation without compensation.

"Are they also worrying that farmers might have to meet the costs of electric fence interference?

"This government has done enough breaking of contracts on the West Coast, and elsewhere, to learn the costs for people and countries who can’t be trusted to keep their word. Though he failed the West Coast Mr Cullen has bought breathing space on this one. But the spadeful of earth he has put on the fire won’t last until Christmas when Mr Swain was expecting to give his decisions.

"Mr Swain must show now that he understands the principles by a statement of intention.

"The Minister of Finance is getting dragged back into the same swamp as the Prime Minister. She has to spend her time hosing fires started by the loony theories and inexperience of the Cabinet she is given. Mr Cullen had that responsibility on the Accident Compensation project and clearly was overwhelmed. But now it will get worse.

"Labour promised literally hundreds of reports and enquiries, to look caring without being committed. Their anointed inquirers are of mixed competence, to say the least. Now the political invoices are starting to come in. Embarrassing reports (on topics more pressing than Government patronage of culture) will thump down with increasing frequency. Mr Cullen has booted this one into the stand.

"But Mr Swain will need to be ready to catch it now when it is thrown back. That will be tomorrow. It wont wait until Christmas,” said Stephen Franks.

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.


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