MEDIA RELEASE – GREY POWER FEDERATION

DATE: 18/09/2013

Immediate Release

Arguments in favour of “Copper Tax” spurious

The argument put forward by supporters of the Governments proposed “Copper Tax” that implementation of the pricing recommended by the Commerce Commission would harm the uptake of fibre is spurious, says Pete Matcham, head of research for the Grey Power Federation. This argument shows a remarkable lack of understanding of consumer motivation Pete said. Ultra Fast Broadband (UFB), is an enabling technology, and it is clear from the example of the ‘smart phone’ market that consumers uptake of such technology is driven by content and increased capabilities, not price. This view is supported by Telecom’s own advertising that is based on the ability to ‘do more’.

Grey Power Federation is totally opposed to the proposal by Minister of Communications and IT, Amy Adams to transfer the responsibility for setting the price of internet connections from the independent Commerce Commission to the Government. The proposed transfer of costs by imposing an on-going levy above market rates on the 25% of the population who will never be able to benefit from the roll out of UFB is unacceptable Mr Matcham continued. Those most impacted will be the elderly, and those in rural and peri-urban areas where Chorus considers it uneconomic to install fibre.

It’s unbelievable that a Government that supposedly supports a free market economy and is opposed to tax rises, would consider introducing a measure that will imposes a Government mandated levy on 25% of the population to benefit an already highly profitable company. Grey Power will lobby against these proposals which amount to no more than the kind of monopolistic price gouging that the de-regulation of the Telecom market was supposed to prevent, Mr Matcham concluded.

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