Telecommunications

It took 3 years but we warned you

Three years ago we warned readers about a telco called Intagr8.

Unfortunately we were right and the company has now collapsed.

A controversial telecommunications company accused of misleading sales tactics has collapsed, leaving thousands of business customers around the country in the lurch.

Intagr8 Ltd was placed in liquidation on Thursday, the same day that Vodafone announced it was severing ties with the company. It is understood Vodafone is owed at least $1m.

Intagr8 offered bundled deals for phones and equipment and the collapse means around 2500 business customers around New Zealand are left with finance company contracts, but potentially no phone lines.

According to the Companies Office website, Damien Grant of Waterstone Insolvency was appointed liquidator on Thursday and his first report is due next week.

Grant said he would investigate why the business failed, but Intagr8’s owner Murray Taylor had blamed it on negative publicity.    Read more »

An interesting Wikileaks memo

There is an interesting Wikileaks memo about David Cunliffe…some of his ardent supporters might not like what it says about him, in particular his support for the US.

On Telecom:

4. (C) Cunliffe was also upbeat about his telecommunications portfolio, despite the challenges. He is currently trying to break up Telecom, which enjoys a monopoly in most New Zealand telecommunications sectors and what Cunliffe called a “cozy duopoly” with Vodafone in mobile telephony. New Zealand’s overpriced cellular services, Cunliffe said, made clear there was room for a third provider. He expected the entry of a third player in the market to be announced reasonably soon. He said that, in slowing investment and throwing up roadblocks to reform, Telecom was behaving exactly as any monopoly would when faced with being dismantled. He acknowledged that significant government investment in the sector might be required, particulary in broadband, where NZ’s performance against other OECD members has lagged and where the country’s vast and nearly empty rural areas make providing universal coverage a challenge. He noted that people have become very dependent on broadband access in just a few years and reported that his constituent office received far more complaints about broadband access than about any other issue, including the recent, highly-unpopular anti-spanking legislation

On immigration and Muslims:

———– Immigration ———– WELLINGTON 00000461 002 OF 003 ¶5. (C) Cunliffe’s constituency is one-third foreign born, the largest percentage of any electorate. He said that, while New Zealanders are generally very tolerant of different cultures, the country did suffer from cyclical waves of anti-immigration sentiment – anti-Pacific in the eighties, anti-Asian in the nineties, and anti-Muslim today. When the PO expressed surprise at the latter, given that Muslims, particularly Arab Muslims, are nearly invisible even in multicultural Auckland, Cunliffe acknowledged that the population was small, but concentrated. He said that Muslims drew suspicion and hostility from other Kiwis who view them, for no good reason, as a security threat. While emphasizing that New Zealand Muslims are loyal to their adopted country and inclined to leave the conflicts of their homelands behind them, Cunliffe expressed some concern that more radical imams are trying to enter the country and stir up trouble. Asked what tools he had to exclude those who have committed no crimes but still might be considered a threat, Cunliffe turned coy. “Some people simply find their visas don’t get renewed,” he said. Cunliffe was confident that such imams are being pushed to New Zealand by radical elements outside the country, rather than pulled into New Zealand by congregations seeking more extreme preachers.   Read more »

Rodney Hide on Chorus

Rodney Hide has a good article in the NBR about Chorus [paywalled], Matthew Hooton’s corporate wrecking crew and businesses exposed to government meddling.

I was reminded of Professor Ron Johnson when National talked up the Big Idea of the 2008 election: its promise to spend $1.5 billion kick-starting ultra-fast broadband. It showed National having vision, National proving tech savvy and National switched on to the needs of modern business and young voters.

Oh, and National would enlist private enterprise to deliver, so putting distance between Muldoon’s disastrous policies and modern National. The government would simply set the contracts and provide the money. That showed National had learned and could still “Think Big” while valuing private enterprise.

The policy has proved what every free-market thinker feared: a political, economic and technologic cluster bomb. Telcos – and potential telcos – focused on lobbying, not providing service; the policy chilled investment and development as business had to await government decisions; and politics now dominates and dictates telecommunications.  Read more »

Final copper price decision today, bet you Hooton’s rent a mob are outraged

According to my Wellington mates, later today the Commerce Commission will be announcing its final wholesale copper broadband price decision.  Predictably, Vodafone and Hooton’s ‘axe the copper tax’ coalition of CallPlus, Slingshot and Orcon will no doubt demand the government not intervene so consumers get the lowest possible internet prices.

What Hooton is hoping no one remembers is that we’re talking about wholesale copper prices – the charges internet retailers pay Chorus.  Not the price consumers pay.

Most of the internet retailers who access Chorus’ copper network have not confirmed they would pass any reduced costs on to consumers.  As usual Orcon is using weasel words

“This being said, some internet retailers such as Orcon have committed to pass on at least some of the commission’s draft price drop to customers if it is finalised.”    Read more »

Media finally catch on to Hooton’s tricks

Matthew Hooton will be crying into his cornflakes this morning, which will take the edge off the hangover somewhat. The media are finally starting to see through his highly misleading campaign.

In an editorial in The Press yesterday, the paper gets to the heart of the issue – the campaign is just designed to line the pockets of groups like Vodafone, Slingshot, Orcon and CallPlus.

A well-organised campaign is being orchestrated on the matter, it is true, suggesting a Government proposal would amount to an extra “tax” on broadband users of some $600 million over the next five years.

This glides over the fact that the shareholders of Vodafone, one of the largest international telecommunications companies in the world, and hundreds of times bigger than Chorus, stand to benefit if the other side of the argument prevails.

Labour’s prime objection is to the Government’s intervention into something it believes should have been left to the Commerce Commission. There would normally be some validity to that argument. Since Chorus’s monopoly of the copper network is deemed to make it unsafe to leave pricing to the free market, the next best option is an independent regulator.  Read more »

Paul Brislen’s taxpayer-funded junket?

Yesterday I revealed that Paul Brislen is a hypocrite and likes to suck off the taxpayers’ tit.

It appears that Brislen has been going cap-in-hand to government departments to get a taxpayer-funded bailout for his irrelevant organisation.

Today, his organisation appears to be suddenly full of cash (thank you taxpayers)

Now he is boasting that he is in Hawaii on a “work trip”, probably funded by the taxpayer.

brislen Read more »

Hooton’s plan to trick journalists

Matthew Hooton is telling anyone that will listen that he’s going to get the press gallery and IT journalists to fall for his latest campaign.

He reckons he’s so clever that he will have journalists eating out of his hands.

In fact, he has been openly saying that the journalists are always falling for his PR lines, and it’s now no longer a challenge for him.

The tip line is running hot with reports that Hooton is launching a campaign on behalf of Vodafone and Internet NZ tomorrow against the Government.

I understand the campaign is about a review the Government has underway about the relationship between pricing for the legacy copper network and pricing for the new fibre network.

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 will be profound.  Read more »

Yet another Clare Curran own goal

Clare Curran has been called many things, but certainly never competent.

Today she has displayed exactly why this is the case. The Labour Party techtard has scored yet another own goal.

Once again, Curran has written a letter of complaint making all sorts of wild allegations, only to have it flat out rejected.

She has been in a flap that telecommunications companies are colluding with the Government over the price people pay for copper broadband.

My spies tell me that Curran shopped the story to a number of journalists in the press gallery but was shot down by everyone she approached.

And when none of the press gallery journalists would touch the story, it appears that Curran turned to her future press secretary, Tom Pullar-Strecker.   Read more »

NBR rips into ComCom extremity

by Winslow Taggart

We’ve blogged a bit about the “mad dog” issues at the Commerce Commission. Today it’s the NBR’s turn to highlight the extreme decisions of the ComCom, with commentary from the financial sector confirming the issues highlighted on this blog around a month ago.

In a submission to telecommunications commissioner Ross Patterson, Mr Bascand says the commission’s approach puts the success of the government’s ultra-fast broadband initiative at risk.

And could be a turn-off for foreign investors considering buying shares in partially privatised state-owned energy companies.

His comments follow what he describes as last month’s “policy shock” of draft regulations for the unbundled copper local loop – the traditional mainstay infrastructure of the national telephone system, which fibre-optic cable will replace as ultra-fast broadband rolls out nationwide.

The government’s $1.5 billion subsidy plan is intended to accelerate uptake of UFB, but the Commerce Commission’s approach suggests it “has a mandate to tilt the playing field back to copper” while using a flawed benchmarking approach to regulation, Mr Bascand said.

Don’t mention Sky TV, who received supposedly happy news from the ComCom only to have it all turn to dust when the Mad Dogs tacked on a paragraph about investigating Sky TV’s broadband relationships.

It also seems that Harbour Asset Management aren’t the only ones. In addition to Milford Asset Management, First NZ and  Forsyth Barr, Global firm Goldman Sachs also points out how government is about to get shafted by the ComCom.

However, last month’s draft decision had led Goldman Sachs to cut its forecast of UFB uptake by 10%, suggesting outcomes that “run entirely counter to government policy”, tilting the playing field in favour of copper and forcing Chorus to accept uneconomic returns on its copper network.

However the issue was handled, the government should be aware international investors now look askance at New Zealand regulators, making them wary of investing in partially privatised assets where regulatory risk remains high, such as the electricity sector.

The question this blog asks is this – who needs Labour and the Greens running interference on an asset sales programme when the Commerce Commission can do it just as easily for them?

Quote of the Day

Ars Technica

Tim Berners-Lee the inventor of the internet:

“Record labels have a very strong voice when it comes to arguing for their particular business model, which is in fact out of date,” he said. “The result is that laws have been created which make out as if the only problem on the internet is teenagers stealing music. The world is bigger than that. The internet is bigger than the music industry. The economic impact of the internet is bigger than the music industry.”