10. CLARE CURRAN (Labour—Dunedin South) Link to this
to the Minister for Communications and Information Technology
What is the best estimate of the additional cost to the Crown of the change he announced to the ultra-fast broadband network this morning?
Hon STEVEN JOYCE (Minister for Communications and Information Technology) Link to this
The current best estimate of the additional cost to the Crown is zero.
What precedents are there for the Crown indemnifying a private company for its technological and financial risk?
No, it is. In countries around the world it is common for Governments to be involved to provide support for regulatory risk. That is how they get prices down, and that is what we have done in this case. [ Interruption]
Mr SPEAKERHow does he propose that the winning private contractor will be compensated in the event that the Commerce Commission decides that the contractor’s market dominance is unfair and forces a price cut?
Firstly, I should say that I think that that is a highly unlikely scenario, because the prices that Crown Fibre Holdings have announced at this point for the contracts they have done have been seen to be highly competitive, and supported by most of the industry contractors, which have said that they are surprised they are on the cheaper side than what they expected and they are very competitive with current copper prices. So to say that that will be a problem, one would have to assume that the Commerce Commission would come in and regulate over the top of what is already a very competitive price, which I think is a very high assumption. But if it were to occur—and, as I say, it is not very likely—then I would expect that that would involve a change to the financial terms, which would perhaps delay repayment of the Crown’s investment. It would not involve extra money, and it would not involve a reduction in the footprint of the ultra-fast broadband.
Hon Trevor Mallard Link to this
If, as the Minister says, that is highly unlikely, why is he legislating to protect Telecom from that event?
Firstly, the member assumes the outcome of the bid negotiations. He must know more than me. The second point is that I think the entire point of the change to the regulatory forbearance is to not legislate, so I think he needs to keep up with what has been happening today.
Why is he using the $15 million that was allocated to connect the most remote schools in New Zealand to broadband to now connect up to 108,000 New Zealand school students from up to 470 schools who were mistakenly left out of both his urban and rural broadband schemes, as identified in a report written by independent consultant Jonathan Brewer, and is this not just another almighty screw-up in his broadband scheme?
No, although I am not quite sure how close that question is to the primary question. But let us humour the member. The reality of the situation is that there was always a boundary between the ultra-fast broadband network and the rural broadband network, and it has always been the intention that schools within that geographical area would be tendered separately. That is what has happened. There is no conspiracy here, I say to Ms Curran.
I seek leave to table three documents. The first two are reports from the independent consultant Jonathan Brewer. The first is titled “Ultra Fast Broadband for Schools—By the Numbers”, and the second is titled “Broadband for Schools—Rural Communities Miss Out”.
I seek leave to table a third document. It is a letter to the Minister of Education, Anne Tolley, and the Minister for Communications and Information Technology, Steven Joyce, signed by InternetNZ, Telecommunications Users Association of New Zealand, and Federated Farmers. It is titled “Zone 3 Schools Missing Out on Fibre Broadband”, and attached is a list of 470 schools.