Just months after indicating he would reapply for his role as Telecommunications Commissioner, Ross Patterson has been dumped from the position and replaced by Stephen Gale, an associate member of the Commerce Commission.
Labour communications spokeswoman Clare Curran said the Government's decision not to reappoint Patterson might be illegal and has requested the Auditor-General to investigate the appointment.
"The Government had clearly signalled it wanted to get rid of Patterson, who has maintained a strong independent role as the watchdog for the important telco industry," Curran said.
"It is my understanding that the appointment of his successor Stephen Gale may have breached public sector requirements, specifically around the appointment process and the description of the appointment."
Communications and Information Technology Minister Amy Adams said an independent panel was convened to consider the 44 applications for the role of Telecommunications Commissioner and recommended the appointment of Gale.
"The Telecommunications Commissioner's role remains a vital one to the success of the industry and it was important we found the best candidate."
Gale impressed the panel with his wide range of experience in regulated industries and his ability to articulate the role of the regulator to promote the interests of consumers through encouraging competition and ensuring that investors had the incentives to invest over the long term, Adams said.
However, Curran was not impressed.
"It has been abundantly clear the Government has been looking for change," she said.
"It is of major concern if the new direction taken by the Telecommunications Commissioner is to focus on the interests of investors rather than consumers."
The Government had an existing conflict of interest being an investor with its $1.35 billion commitment to ultra-fast broadband. It should be scrupulously careful to avoid accusations of protecting its own interests and reassure the public that their interests were paramount, she said.
Patterson was seeking another five-year term, having overseen the operational and structural split of Telecom and cheaper charges for mobile termination rates.
The Commerce Commission recently launched an investigation into Sky Network Television's pay-TV content arrangements, which the anti-trust regulator considered might erode the level of competition in the industry.
The one thing both Curran and Adams did agree on was thanking Patterson for his contribution.
* This story has been amended from an earlier version. It was the Commerce Commission, not Ross Patterson, that launched the investigation into Sky Network Television's pay-TV content arrangements.