19 February 2013

New internet cable will shut out competition

A second trans-Tasman internet cable is positive for New Zealand’s interconnectivity but will not address the monopoly Telecom currently has on connectivity to the rest of the world, the Green Party said today.

Telecom, Vodafone, and Telstra have announced a non-binding memorandum of understanding to co-invest in the construction of a second trans-Tasman internet cable between Sydney and Auckland. The cable will cost US$60 million and be completed by 2015.

“The second trans-Tasman cable will improve New Zealand’s internet connectivity but will do little to break Telecom’s monopoly over pricing,” Green Party ICT spokesperson Gareth Hughes said today.

“The move will now make it much harder to justify building a second cable to the USA, yet this is exactly the kind of internet infrastructure New Zealand needs if we are to have a truly resilient and competitive network.

“Reliance on a single provider for our international internet provision has meant higher prices, data caps, and less innovation for services.

“Today’s announcement is likely to have only a small impact on the current unsatisfactory situation. It’s not the step change our economy needs.

“Telecom’s stake in the second trans-Tasman cable will ensure there is no price competition for internet out of New Zealand. And this will also benefit co-investors Vodafone and Telstra.

“Late last year, we proposed that the Government take a cornerstone investment in a second internet cable to the USA. We still see this as a strategic investment in a smart green economy.”

Link to Green Paper on the second internet cable:
http://www.greens.org.nz/sites/default/files/ict_green_paper_17_12_12_final_1.pdf

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