NZ Government scraps regulatory holiday for FTTH network operators

Stuart Corner
Wednesday, 18 May 2011 11:10

IT Policy - Government Tech Policy

The New Zealand Government has bowed to industry pressure and scrapped the controversial plan to give operators of its FTTH networks a 10 year holiday from regulatory oversight, despite a government committee recommending in favour of the plan.

The Government is considering tenders for the operation of FTTH networks in different regions and service prices will be incorporated into contracts with the successful bidders. The Regulatory holiday will be replaced with contractual mechanisms that would cut in if the regulator, the Commerce Commission regulated prices lower than those contracted.

Announcing the change of heart, communications and information technology minister, Steven Joyce, said he had listened carefully to industry concerns in regards to the plan for regulatory forbearance over the eight and a half year build period of the contract.

"While I think their concerns are more theoretical than real, given that pretty much everybody has been happy with the very competitive prices announced by CFH [the government company overseeing the tenders and which will form joint ventures with successful bidders] to date, we have been able to find an alternative solution which will give the infrastructure builders confidence to stay committed to their low capped prices, and customers confidence that they are will continue to get the best prices over that eight and a half year period," Joyce said.

TUANZ welcomed the announcement saying "This is fantastic news and clears the way for the development of a world-class ultrafast broadband network that will give New Zealand the opportunity to take on the world in the new digital era."

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