NZ Business Reputation At Risk

NEWS RELEASE 14 OCTOBER, 2001

NZ Business Reputation At Risk

The handling of changes to telecommunications law is becoming a significant issue in the information communications technology (ICT) sector.

The Executive Director of the Information Technology Association of New Zealand (ITANZ), Mr Jim O’Neill, said today there was a good deal of disquiet among ICT companies that the government planned to reverse specific assurances that it would not regulate the mobile telephone market.

“Commercial investment judgements during the radio spectrum auction process and subsequently during the development of cellular networks were made on the basis of Government assurances that there would be no regulation and that normal commercial practices would be followed.

“Advice of the Ministry of Economic Development was that the costs of regulating national roaming between competing mobile phone companies would outweigh the benefit of regulation.

“Now, however, the Government has signalled its intention to bring in an amendment to Parliament providing for regulation of the market.

“ITANZ regrets that the Minister of Information Technology has found it necessary to announce such action. We look forward to an explanation from him of the reasons for this action, bearing in mind that he has always shown high regards for principles of natural justice, respect for property rights and due process.

“Overseas companies investing in New Zealand must be in a position to know that when assurances are given by a Government of the day these assurances will be honoured, or will be amended only when there is an extremely compelling and acceptable reason for doing so. This is particularly important for ICT companies that are considering making investments here.

“One of New Zealand’s significant assets is perceptions abroad that it is a western nation where the rule of law, property rights and due process are upheld. Any threat to this perception must be treated extremely seriously.

“It is particularly disturbing that, according to the Minister of Finance, the Government was convinced to change its mind after evidence was presented in secret to the Commerce Select Committee of Parliament. That this evidence was presented by a company with competitive interests in the mobile market added to concerns about processes being followed.

“Care must be taken that the manner of entry of new players into the mobile telephone market is achieved without any loss of New Zealand’s reputation internationally as a nation that respects property rights and due process.

“Regulation in itself is a legitimate tool of government. But regulation contrary to previous assurances raises questions, particularly when a practicable and workable code of practice for all players in the market might well be an acceptable alternative to all parties

“ITANZ will seek discussions with the Government on the issue.”

Ends

For further information:
Jim O’Neill
Executive Director, ITANZ
Tel: (04) 472-2731 or 025-249-5657

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