National acts for its Chorus mates, not Kiwis

National has given its mates at Chorus a huge windfall by proposing to keep the price of copper broadband at the more expensive level of fibre broadband, Labour’s Communications and IT spokesperson Clare Curran said today.

“Amy Adams’ announcement today is outright government interference. It is price-fixing to suit its mates at a cost to consumers. She has essentially let Chorus set the price for copper broadband so that their fibre broadband is not undercut. Her decision today could breach international law and certainly breaches New Zealand’s regulatory framework.

“Amy Adams is proposing that copper broadband is charged at an equivalent price to fibre broadband, despite the Commerce Commission last year recommending that copper should be $12 a month cheaper.

“Chorus was furious with the Commerce Commission and that’s when Amy Adams climbed in and launched an inquiry as a delaying tactic.

“Now instead of the Commerce Commission setting the price, it has been side-lined and Chorus and the Government are in charge. It’s Kiwis that are paying the price. John Key promised to change the law if necessary back in December to bail out Chorus. Amy Adams is now delivering on that promise.

“This is an incredibly bad precedent. The ultra-fast broadband rollout was a public-private partnership with Chorus. But as soon as conditions change Chorus is able to renegotiate the contract.

“It’s the private company wearing the pants in this partnership.

“The price of copper broadband should be set by the Commerce Commission as an independent regulator. That way Kiwis can have faith in the system. It was working well and Kiwis were set to save $12 a month before Amy Adams stepped in.

“Even if the Commerce Commission ultimately sets the copper price, they are only allowed to do it on Amy Adams’ terms. Under GATT, global best practice requires separation between the investor and the regulator. National is acting as both.

“Labour is utterly opposed to the casual disregard for the regulatory process and favouring a private company over consumers.

“There are serious questions for the Government to answer about what benefits Chorus will reap from this intervention and whether profits will end up in overseas investors’ pockets,” says Clare Curran.

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