Demise of regulatory holiday a win all round

Demise of regulatory holiday a win all round

InternetNZ (Internet New Zealand Inc) has welcomed this morning’s announcement by the Minister of Communications and IT Steven Joyce that the proposed regulatory holiday for ultra-fast broadband will be replaced.

“The regulatory holiday proposed by the Government was one of the biggest flaws in the emerging regulatory framework for telecommunications. We welcome its demise,” says InternetNZ Chief Executive Vikram Kumar.

“The mechanism proposed looks like a superior approach even to the special access undertakings regime we suggested to the Select Committee. It does not require a major re-write of the Telecommunications Act, and it can be implemented quickly.

“The mechanism leaves the Commission with full regulatory oversight of UFB, and turns the initiative into a more conventional Public-Private Partnership approach – which arguably would have been the best way to proceed from the beginning.

“The regulatory holiday was a non-transparent regulatory subsidy which hid any future costs from public scrutiny.

“Contractual mechanisms as proposed by the Minister would bring the cost of any changes back onto the Crown’s books. This however means that there is now greater risk to the non-priority coverage areas in the later years of the UFB initiative from any regulatory intervention in the early stages. That’s something a future government will need to grapple with.

“Details of the contractual terms will be important. We anticipate that these will be released for public scrutiny along with the rest of the LFC contracts in due course.

“We also strongly urge the Minister to release the necessary Supplementary Order Paper for public scrutiny as soon as possible. Rapid drafting such as will now be underway always creates the risk of unintended errors. The more time for public scrutiny of the SOP, the less likely such errors are.

“As we noted earlier in the week, there are still problems with the legislation. Today’s change is however a major improvement,” Vikram Kumar says.

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