PM pledges urgency on slow internet

Ensuring faster and cheaper internet was "a matter of urgency", Prime Minister Helen Clark told Parliament yesterday, in the strongest hint yet that the Government plans to impose harsher regulations on Telecom.

Outlining her Government's priorities for the year, Clark said: "It's become very clear that new initiatives are needed to get faster internet access and at more competitive prices.

"Broadband is a critical enabler of productivity, growth, and economic transformation, yet New Zealand is lagging behind on many broadband indicators."

Clark's comments come as the Government conducts its regulatory review into Telecom, which is expected to be finished by the middle of the year.

With recent strident comments from Clark and Communications Minister David Cunliffe, some form of Government intervention looks increasingly likely.

Options include allowing Telecom's competitors access to the wires that join households to the telephone exchange - so-called "unbundling the local loop" - or strengthening existing rules that force Telecom to give wholesale internet access to its competitors.

On Monday, Telecom said it would offer its retail and business customers lower broadband prices and faster speeds, but Clark indicated this was not enough.

"While recent announcements of price reductions and other changes are welcome, the Government will be addressing the relevant policy, legislative, and regulatory settings as a matter of urgency," she said.

"We want to work with other parties on solutions which not only enable New Zealand to catch up with the rest of the world, but also enable us to keep up as those technologies develop further."

Clark expressed concern that broadband speeds were too slow and that New Zealand was "one of the few countries where restrictive data caps has been the norm".

In response to the speech, Telecom spokesman John Goulter said the company was working "actively and openly with the Government on its stock-take of telecommunications regulation".

"We share the Government's goal of affordable broadband for all New Zealanders," Goulter said.

Auckland Chamber of Commerce chief executive Michael Barnett said better broadband in New Zealand would result in more globally competitive businesses.

But not all business welcomed Clark's promise to take action.

Business NZ chief executive Phil O'Reilly said he was concerned "there may be an intention to regulate to force Telecom to hand over its assets to competitors.

"One of the first principles of good Government is that people or companies should not have their property confiscated."