Regulatory break for fibre contract winner 'inappropriate'

Labour Party finance spokesman David Cunliffe. Photo / Mark Mitchell

Labour is railing against the Government's reform of telecommunications law and says it will review regulatory changes if elected this November.

If the House passes the Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill, Labour's finance spokesperson David Cunliffe said his party would re-assess the law on a return to power.

"We are committing to review it, we think that the regulatory holiday [provided by the law] is inappropriate," he said.

The law paves the way for the building of the Government's ultra-fast broadband (UFB) scheme and rural broadband initiative.

The billion-dollar UFB scheme hopes to deliver internet speeds of 100 megabits per second by laying a fibre internet network throughout 75 per cent of New Zealand.

The Crown is in negotiations with a number of private partners who are competing for the right to build the scheme.

A supplementary order paper, tacked on to the bill in February, offers the winner of the UFB tender a 10-year forbearance period, which would remove the Commerce Commission's ability to regulate the roll-out of fibre.

This "regulatory holiday" will prevent the commission from "carrying out its key role to protect the long-term interests of end users of telecommunications services," Cunliffe said.

Vector, who is bidding for broadband contracts, is calling for the Government to seek wider support for the changes to avoid future regulatory shake-ups.

"If a decision is rushed then our concern is shortly down the track the regulation could come under significant review," said Vector's chief executive Simon Mackenzie.

The bill is before the finance and expenditure select committee and is due back to the House in June.