May 18, 2011

The Group that represents the Hi-Tech industry, NZICT, is pleased that Minister Hon Steven Joyce today announced the replacement of the regulatory forbearance clause in the Telecommunications Amendment Bill with a contractual mechanism used elsewhere in other public private partnerships.

“This is a significant change and it addresses some of the concerns raised by NZICT and others about the proposed regulatory environment for New Zealand in an Ultra-fast broadband world,” says NZICT CEO Brett O’Riley.

“It was always going to be tricky trying to balance the investment return requirements of the Local Fibre Company investors and operators, with the need to give end customers confidence that they would not be price gouged over time.”

The impact of this contractual mechanism is to create a dynamic where broadband pricing can be moved by the Commerce Commission, without private sector investors being severely impacted, as they are offered alternative relief in terms of the return and repayment requirements of their contracts with Crown Fibre Holdings.

“This should give a number of players in the industry the confidence to invest, while ensuring customers are not saddled with artificially high prices,” says O’Riley.

ENDS

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