Internet bill will 'reward the lazy'

Paul Brislen. Photo / Paul Estcourt

A law paving the way for the Government's broadband scheme will "crush competition" in the copper market, says the telecommunications users association (TUANZ).

The association harshly criticised the Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill in their public submission on the law published last night.

The bill, before a select committee, allows for the building of the Government's fibre internet network which hopes to deliver internet speeds of 100 megabits a second to 75 per cent of New Zealand over the next ten years.

The Crown is in negotiation with a number of private vendors to decide who it will partner with to build the scheme.

The bill also makes the necessary legislative changes so Telecom can participate in the build if it wins Government contracts.

However, TUANZ chief executive Paul Brislen said the law would kill competition in the copper line market, even though copper would remain important until at least 2017.

"They're undoing the framework of the copper world. For a lot of our members, copper is going to be important for the next six years," Brislen said.

TUANZ represents the telecommunications interests of major banks, supermarkets, government departments and universities.

Under the pricing structure in the bill, those who had invested heavily in infrastructure to rival Telecom in the copper market would be the most disadvantaged, Brislen said.

"A company who has invested tens of millions of dollars in copper unbundling has their investment become expensive per line. Meanwhile those lazy bastards who've not invested a penny suddenly get a free ride and have a much cheaper price per line. You're not rewarded for investing money, you're penalised for investing money," he said.

This would make telcos uninterested in competing in the copper, Brislen said.

The result of the law would be that when fibre was finally rolled out, the public would flock to the Government's network, he said.

But when that time came, there might be no one left to rival the Government and their private partner.

"For six years, what you're doing in effect is screw over the copper market and the very companies that are most competitive are the most penalised and that means in six years, when its time to move to fibre, the companies that could cause a lot of trouble can't because they've been sidelined," Brislen said.

"You're basically handing an entire fixed-line and broadband industry to whoever wins the UFB."

hamish.fletcher@nzherald.co.nz