5 November 2013

Government’s ICT and UFB policy in tatters

The Government’s bizarre suggestion that it may bail out or buy back part of Chorus shows how broken its UFB programme has become, says Labour Leader David Cunliffe.

“Just two years after signing the ultra-fast broadband contract with Chorus, the Government’s signature project is in tatters. The Government knew the Commerce Commission would need to investigate and should have planned accordingly.

“The Commerce Commission’s final decision involves compromise after taking account of the Government’s and Chorus’ position. It is a sensible and well-considered position that will benefit Kiwi households.

“The Government needs to be responsible and follow due regulatory process.

“Chorus’ profits may be affected but that should have been foreseen by the Government when it set up its UFB project. It is not uncommon for companies facing pro-competitive regulation to claim significant disadvantage.

“New Zealand families should not be forced to pay $100 a year more than the regulator says is needed for broadband just because the Government negotiated a bad contract.

“Nor should National bail out its corporate mates and force the taxpayer to pick up the tab. This is a ridiculous situation and is totally of the Government’s own making.

“The underlying problem is the slow uptake of UFB. If Chorus is truly struggling to stay solvent then it is the uptake rate by customers of UFB that is the problem, not the actions of the independent regulator.

“The National Government’s unwillingness to stimulate a compelling, multi-provider online content environment has made the UFB uptake problem worse.

“The Government’s ICT policy is in tatters. A reshuffle or ministerial resignation is surely not now beyond contemplation,” David Cunliffe says.

ends

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