10. CLARE CURRAN (Labour—Dunedin South) Link to this
to the Minister for Communications and Information Technology
Has he been advised that the regulatory arrangement around the ultra-fast broadband network will be worth up to $600 million, and who will pay for it?
Hon STEVEN JOYCE (Minister for Communications and Information Technology) Link to this
The premise of the member’s question is incorrect. The regulatory package reduces the regulatory risk for bidders so they are able to accept lower margins and, therefore, offer lower build prices and lower wholesale prices to the benefit of all users. The member has in fact got it exactly the wrong way around. Without regulatory stability and certainty for investors during the crucial build period, taxpayers and/or consumers would end up paying significantly more for ultra-fast broadband. As to the amount she mentions, a number of figures have been suggested as to what these savings will be, and that number is one of them.
Can he guarantee that retail prices for existing broadband on the copper network will not rise as a result of the Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill?
Nobody can guarantee that the retail price of copper will not rise at any time in the future, but the pressure will all be downwards because of the competition from the fibre network, and because, as part of the regulatory changes proposed, the unbundled bitstream access product will move from being retail-minus to cost-plus. Many people believe the commission—that it will lead to lower prices.
Does he accept that the $400 million to $600 million figure to increase broadband coverage will come from the users who are not receiving ultra-fast broadband now?
No, not at all. I really worry about the member’s understanding of the regulatory package’s purpose. It is there to reduce the regulatory risk for bidders so they are able to accept lower margins and, therefore, lower build prices and lower wholesale prices for the benefit of all users. It is not a case of taking from one set of users and giving to the other. It is about reducing the risk premium so that the margins can come down. The member needs to understand that.