Broadband monopoly ties up taxpayer funds
The Government’s broadband plan will tie up $1.35 billion of taxpayer funds until possibly 2036, with taxpayers bearing the cost of hundreds of millions of dollars in interest, says Labour’s communications and IT spokesperson Clare Curran.
Clare Curran says an examination of the contract between Chorus, the new network building company (split off from Telecom), and the Government reveals that repayment of the government’s investment will be massively delayed --- to between 2025 and 2036.
“Tieing up public capital until 2036 is a shockingly long deferral. It will cost hundreds of millions of dollars in interest more than the now-false $1.35 billion price cap indicates, but this Government will be long gone and won’t have to worry,” Clare Curran said.
“After more than two and a half years, I welcome a decision at last on the winning contractor, but have grave concerns whether there is enough protection in place to ensure effective competition so Kiwis can receive affordable prices and services. The contract details do not reflect the original contract specifications. This deal may well need further legislative change that could happen without public consultation.”
Clare Curran said Labour fears most Kiwis will not receive ultrafast broadband until the end of the decade, and maybe not then, and may not be able to afford it. “Access to technology is a great leveller. It can transform our nation. It can give people opportunities and ways out of poverty they never had before. It can allow us to build new industries and a nation built on our wits and skills. Getting the infrastructure right is paramount. Steven Joyce must ensure that the network is built properly.
“Labour is committed to reviewing the UFB and the Rural Broadband Initiative (RBI), and to possibly repealing parts of the ill-fated Telco Bill that underpins the scheme,” she said.
“There are up to 470 schools with more than 100,000 school children who won’t receive either the urban or rural broadband schemes,” Clare Curran said. “This leaves a gaping hole in the scheme that Steven Joyce hasn’t yet managed to explain how he will fill.
“His last minute stitch-up to replace his regulatory holiday means the Crown will bear the risk from any drop in pricing recommended by the Commerce Commission. Telecom has been insulated from that risk.
“It’s good news that Enable Networks will roll out broadband in Christchurch, even if it is going to happen too slowly,” Clare Curran said. “Enable has the skills and experience to deliver the important infrastructure to underpin a high tech city of the future.”