InternetNZ: Hands off UFB policy

InternetNZ policy contractor Reg Hammond warns government could be paving the way for a  significant change of policy on the UltraFast Broadband network now being built.

In a blog post Hammond says any policy changes will have broader implications for users and the telecommunications industry.

He says there are signs the government plans to move away from the idea that the new fibre network will compete with the existing copper network to a policy designed to push users into moving to fibre.

When fibre has a price advantage

One way of doing this would be to give fibre a price advantage over copper. It can do this by keeping the regulated price of a copper service artificially high relative to fibre costs.

Hammond says for that to work, the government would need to change the laws it previously enacted to base the regulated price of copper services on the costs of providing those services. That approach would see copper prices fall.

As he says, this in turn would have consequences. For example, the fibre network will only reach 75 percent of the country. The remaining 25 percent will stay with copper. Instead of the copper price reducing, he says these people will end up paying more for their connections in order to subsidise people on the fibre network.