Commerce Commission: Watchdog or Mad Dog, Ctd

The continuation of a series of guest posts.

Yesterday Whaleoil kindly the first post in a series on the Mad Dogs of the Commerce Commission attacking Chorus through proposals to force down their copper wire pricing for broadband.

Today, I’m focusing on how the Commerce Commission is working against the interests of the National Government.

One of the main policy planks of National in 2008 and 2011 was the big step-change in ultrafast broadband through fibre-optic cable rollouts.

National proposed a hefty $1.5 billion taxpayer contribution to help accelerate the rollout. It was, and is a bold plan to make New Zealand a more advanced, productive and connected nation. The use of fibre to improve peoples lives through better connectivity would be profound.

That’s why the Commerce Commission’s proposal is crazy.

It is forcing Chorus to massively lower copper wire based broadband, when Government policy is to encourage people to uptake on fibre!

Now, I don’t know about you, but when $1.5billion of taxpayer money is being used to encourage people to use a better form of infrastructure, I don’t like it when another part of government is working to discourage the policy.

This absurd contradiction of official government policy by the regulatory arm of the state highlights a real challenge for the National Government?

Do they make the policy, and have the bureaucracy implement it for the good of the nation?

Or do they merely announce policy, and have the bureaucracy implement contrary actions?

Will the government go into the 2014 elections showing a piss-poor uptake of fibre, and then explain that taxpayers money got wasted because they failed to eliminate the contradictory proposals of their mad dog regulatory arm?

Or will they haul back the draft proposal and give a new set of guidelines to the Commerce Commission to prevent them from this kind of unexpected attack on businesses that NEED certainty in the regulatory environment.

The irony is, Australia has a more regulated environment. But the certainty around the regulatory environment is far greater than in New Zealand. Australian businesses don’t get nasty surprises from mad dogs like they do here in New Zealand.


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  • Blokeintakapuna

    Good point!

    Is the CC headed by Labour Party sycophants planted by nepotism during the Clark / Cullen regime? Makes one wonder…

    Surely it couldn’t be one government department not knowing what the other government department was doing, could it?

  • BJ

    Surely there’s Labour saboteurs planted in all sorts of government departments

  • Cobolt

    I smell a shareholder concerned only with their investment.

    There is much more to consider here including the availability of broadband for all. ComCom’s job is to look out for the consumer, not the shareholders.
    If UFB is such a magnificent idea for everyone to be better connected, then why shouldn’t copper broadband be more affordable for those who don’t have access to or can’t afford UFB.

    I guess your due diligence may be lacking a little of you failed to see that the ComCom could act on Chorus’ bottom line and and then make your investment accordingly.

    I for one welcome the ComCom decision and look forward to more affordable broadband. I couldn’t give a shit about your share price.

  • Le Sphincter

    Remind me again why a so called free enterprise party , Le National is paying a private business $1100 for  each residential house it passes with a fibreoptic cable.
    What part of not ‘picking winners’ is this.
    Is this just another Nanny state inititive where the Le Travail was going to spend less taxpayers money than Le Nationale.
    What was that about ‘nice to haves’ and ‘level playing field’ that doesnt apply here

    Id love to know, mes amis

    • Guest

      It’s a bit like building a road or a motorway LS. If fibre is the information superhighway of the future, then having the govt help fund the infrastructure makes sense. 

      The winner is not so much a company, as the country as a whole that benefits from fibre.

  • David

    I have an investment in Chorus, but for the benefit of NZ consumers which the CC seems belatedly interested in by dropping the copper price it will keep the UFB network focused. Despite taking a hit it’s a good move and there are a lot of monopoly,s, duopoloys and oligopolys in NZ and we need a strong regulator.
    For me it will force Chorus to get a bit more focused and be efficient to give me a decent return.

  • Phar Lap

     Well, Stephen Joyce what are you going to do about the enemies within NZ .The Communist( sic) Commission.Shouldnt there be a please explain.If WO can access this type of sabotage, wonder why you are your team are not on the job.

  • Aunt Zinnia

    Has anyone heard that Sky has finangled itself a monoploy on the provision of all the whizz bang bits of what you are supposed to be able to access on UFB? (scheduling your own tv progs, HD gaming etc). Seems you have to be a big boy to get access to the overseas stuff so the providers are having to use Sky who are going to tie them into only using their service. Is this true? If so how affordable is UFB going to be?

    PS At least today’s post on this issue is more thought provoking than yesterday’s bibble babble

  • Greg M

    As long as the fibre ends up terminated to copper wire from your gate to your computer it’s never going to be a hell of a lot better anyway.
    When the fibre plugs in directly to the back of your computer, ( Some servers use “fibre channel” to connect HDD’s to the backplane for example), then you will notice a difference.
    Until then, don’t bother changing.