Govt broadband move "embarrassing back-down'' -- Labour

The Government is being accused of an ``embarrassing back-down'' after ditching a controversial holiday from price regulation for ultra-fast broadband (UFB) providers.
A bill that paves the way for the Government's $1.35 billion ultra-fast broadband plan is being amended to remove a regulatory holiday consumer groups lobbied against even though the finance and expenditure committee left the issue alone.
Communications and Information Technology Minister Steven Joyce said he had listened to industry concerns and the solution would give confidence to providers and consumers. He thanked the Maori Party for their representations and assistance in developing the change.
Telecom has been selected for preferred negotiations for the UFB initiative but a final decision is awaited. Telecom said today it was comfortable in principle with the proposed changes.
``They appear to adopt a standard contractual approach to Public Private Partnership arrangements,'' Telecom chief executive Paul Reynolds said.
``They should therefore provide investors with the necessary degree of certainty while also ensuring the industry is comfortable with the level of regulatory oversight.''
Labour MP Clare Curran said Mr Joyce had been forced into a ``hugely embarrassing back-down'' and the Government's policy making was rushed.
The change took away the secrecy of price-setting and made it more transparent, but shifted risk to the Government, she said.
``He's allowing the Commerce Commission back in but he's transferring all the risk to the Crown, which means that he's providing greater certainty for a private contractor and pushing risk back on to the taxpayer.''
The bill would have given fibre companies an 8-1/2-year regulatory holiday during which the Commerce Commission would not have had any oversight of prices and services.
The Government said the provision would be replaced with contractual measures that would kick in if the commission regulated prices lower than those contracted.
It would back the prices negotiated by Crown Fibre Holdings but if the commission believed prices should go lower during the UFB build period, then the Crown would wear the risk rather than consumers, Mr Joyce said.
Maori Party telecommunications spokeswoman Rahui Katene said she was pleased the Government had listened to its calls for consumers not to be hard done-by.
Green Party technology spokesman Gareth Hughes said the move was a win for New Zealanders but could end up costing taxpayers.
``This is a major back-flip for Steven Joyce. It continues his track-record of poor process and haste on the bill.''
Telecommunications groups have welcomed the move.
InternetNZ chief executive Vikram Kumar said the proposed mechanism looked like a superior approach.
``It does not require a major re-write of the Telecommunications Act, and it can be implemented quickly.''
Telecommunications Users Association chief executive Paul Brislen was also happy.
``We, the consumers, get full Commerce Commission oversight of the new regime to make sure we're getting the best bang for our buck.''