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Govt in damage control over Pacific Fibre

Communications and IT Spokesperson
02 August 2012 MEDIA STATEMENT
Govt in damage control over Pacific Fibre

The Government has failed to get an estimate of the economic cost to New Zealand as the result of the collapse of the Pacific Fibre cable deal, says Labour’s Communications and IT Spokesperson Clare Curran.

“This shows the government hasn’t a clue how important price competition for international connectivity is for the success of its ultrafast broadband scheme.

“The Minister Amy Adams is in damage control mode. She’s trying to minimise the political impact and industry fallout from the Pacific Fibre deal on the government’s $1.5 billion ultrafast broadband scheme by claiming there is sufficient capacity and price competitiveness in our existing monopoly international cable.

“That flies in the face of comments from Tech entrepreneur Rod Drury who says he ‘cannot see how the Government’s investment in UFB makes sense until the price of international bandwidth is greatly reduced’.

“It’s also worth noting that Waikato University’s deputy dean of education, Russell Yates, told a select committee inquiry into digital literacy yesterday that the viability of the UFB was dependent on the price of hooking up, on-going data costs, removal of data speed and volume caps, including competition through the international cable.

“There’s no doubt the ultrafast broadband scheme is in trouble. It was recently revealed by the Minister herself that just 0.01% of Kiwi households have signed up after four years. Forty three per cent of New Zealanders don't even know it exists and Telcos are having to give away free connections to get customers.

“New Zealand is stuck at 17th on the OECD table of fixed broadband connections despite this Government promising in 2008 that three-quarters of the country would receive ultrafast broadband within 10 years.

“Also of concern is the fact that Pacific Fibre seems to have been caught in the middle of ‘real political issues between the US and China’ according to Rod Drury.

“Is this the result of poor communication between National and the United States over the involvement of Huawei in the Pacific Fibre venture? Why couldn’t the Government have intervened to sort this out and why didn’t they use their purchasing power to ensure this critical piece of infrastructure would proceed?

“Instead of being a step up, we are now seeing the broadband scheme taking a big step backwards,” said Clare Curran.

© Scoop Media

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