'Rural Package' Clarification Sought

'Rural Package' Clarification Sought

5 May 2006

Federated Farmers of New Zealand (Inc) has sought an urgent meeting with the Minister of Communications to seek more detail on the government’s plan for rural telecommunications, said Hugh Ritchie of Federated Farmers.

“The minister’s announcement is very short on detail about the government’s plans for the rural sector, which will be disadvantaged by unbundling of the local loop,” Mr Ritchie said.

“Federated Farmers would want to see a well thought out package with robust incentives for investment in rural infrastructure before accepting unbundling.”

Federated Farmers opposes unbundling because it further reduces the incentive for telcos to invest in rural telecommunications infrastructure.

“There is no doubt that urban people and businesses will be the winners from more competition in town and cities. But telcos that have been clamouring for unbundling have shown little interest in offering real competition in rural areas, despite demand from farmers operating substantial businesses.

“We can’t help but see these new entrants cherry picking off the biggest and most profitable urban customers, while rural infrastructure is left to wither.

“Unbundling is also a huge attack on private property rights. The government’s use of regulation to force unbundling on a private firm should send shock waves though everyone in the private sector.

“There were significant failures in policy when assets were sold to Telecom. Insufficient regard was given to the needs of rural New Zealand and for the on-going investment in infrastructure nationwide.

“But sold they were and the copper wire was Telecom’s rightful property. These should not be removed by government fiat because some other governments overseas have done the same thing,” Mr Ritchie said.

Hugh Ritchie is a Hawke’s Bay farmer and the federation’s spokesman on telecommunications.

ENDS

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