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Cunliffe’s not so shabby question: broadband costs

Written By: - Date published: 12:57 pm, September 18th, 2013 - 39 comments
Categories: capitalism, david cunliffe, infrastructure, john key, news, Steven Joyce, telecommunications, tv - Tags:

The MSM, especially TV One and TV 3’s 6pm news, reported on Cunliffe stumbling over the word Chorus in his first question yesterday to PM Key.

They failed to significantly report on the substance of Cunliffe’s question, that exposes Key’s prevarications on the costs to Kiwis of his Ultrafast Broadband plan.

Cunliffe lays out the importance of his question in a press release:

Kiwis will pay $150 more a year for their broadband than they should thanks to the National Government – and John Key knows it, says Labour Leader David Cunliffe.

“John Key’s government is planning to keep the price of copper broadband services artificially high because it has a political problem and is trying to make its ultrafast broadband plan more attractive to consumers.

“The Commerce Commission’s draft determination would have cut prices for broadband by up to $12.50 a month.  But the Minister’s proposals override the independent regulator, and would keep prices higher for longer.

“John Key’s claim in Parliament today that “under every scenario consumers will pay less” is just plain wrong.  Every scenario put forward by the Government in its discussion document would see Kiwis pay more than they would under the Commerce Commission’s plan.

“This is corporate welfare.  National is once again propping up big business at the expense of Kiwi families.

Cunliffe also points out the crony capitalism involved in Key’s slippery deal:

“Embarrassingly, John Key’s former boss at Bankers Trust, Gavin Walker, is the chair of Chorus’ UFB Steering Committee.  Given the $600-million estimated subsidy involved, that is just too close for comfort.

Following this question and Key’s comments on it later yesterday, Paul McBeth and NBR staff report on the dodgy way Key operates, getting advice by phone from Chorus Chair and passing it off as official advice. (h/t Penny Bright)

At question time in Parliament today, Prime Minister John Key defended comments that Chorus may go broke if the Commerce Commission pressed ahead with plans for a sharp cut in the regulated price on the copper lines, saying Cabinet had received advice based on commercial and in-confidence briefings between Chorus and Ministry of Business, Innovation and Employment.

In his post-Cabinet press conference yesterday, Key said he could not recall where the advice had come from.

He said today that those briefings probably would have come after he received a phone call from Chorus chair Sue Sheldon in December last year when she shared her view on the impact of the regulator’s draft decision and gave the government “some understanding of the issues they would face.”

The article goes on to point out the significance of Cunliffe’s question, in relation to the manipulations of Joyce and Key around the comparative pricing of copper wire and brroadband connections.

He was answering the first question directed to him by the newly elected leader of the Labour Party, David Cunliffe, who asked if Key still believed Chorus would “go broke” if proposals to drop the price of copper services in line with Commerce Commission recommendations went ahead.

The new Labour leader also asked why then-ICT Minister Steven Joyce did not include base copper pricing in UFB contract negotiations.

Cunliffe’s choice is significant because he was Communications Minister in 2006 when he surprised Telecom by forcing operational separation between its core infrastructure and competitive telephony and broadband services in a move that saw prices to consumers drop.

Cunliffe is expected to campaign heavily on that record in the context of the current spat over how to price copper services in a way that doesn’t undermine the government’s desire to see consumers switch quickly to the fibre-based ultra-fast broadband network, which the government is underwriting.

So there may be more to come on this story.  I hope the MSM are paying attention.

[update] Press release from Coalition for Fair Internet Pricing.

ASX & ASIC Asked to Investigate Chorus Insolvency Speculation

Ongoing speculation of a risk that Chorus Ltd (CNU) may become insolvent has led New Zealand’s Coalition for Fair Internet Pricing to ask the Australian Securities Exchange (ASX) and the regulator, the Australian Securities & Investments Commission (ASIC), to inquire into the company.

[…]

A spokeswoman for the Coalition for Fair Internet Pricing, Sue Chetwin, also Chief Executive of Consumer NZ, said today: “We continue to be concerned that there may be information circulating in Wellington, as the Prime Minister has confirmed, about the financial viability of Chorus Ltd under the Commerce Commission’s draft determination that is not available to its shareholders or to the broader market.

 

39 comments on “Cunliffe’s not so shabby question: broadband costs”

  1. The FACTS are that you cannot have either transparency or democratic accountability without proper written records.

    Here the Public Records Act 2005 is quite pivotal.

    Unfortunately, the RULE OF LAW – ie: the implementation and enforcement of the Public Records Act 2005, is being violated in a major way at both central and local government level.

    eg: ‘the books’ are not open at central and local government level, and we aren’t given the ‘devilish detail’ of where exactly public tax and rates monies are being spent, invested or borrowed.

    New Zealand is effectively like a legislative ‘Wild West’.

    On so many pivotal fronts the RULE OF LAW is not upheld, those who make the law don’t follow it themselves, and those responsible for upholding and implementing the LAW – just ‘make it up’.

    This won’t be happening on my watch!

    Good on David Cunliffe for helping to expose more corrupt, crony capitalism!

    ‘Her Warship’ 😉

    Penny Bright

  2. Herodotus 2

    From an alternative angle, what would have been chorus’s pricing policy should they not have won the fibre tender? Should that not indicate what premium there is?
    Perhaps in reflection the govt should have owned the fibre lines we already have invested $1b into the process.
    This has the ability to save households as much if not more than the Lab &Greens power policy.
    This fibre is something that has an immediate impact on our daily lives, coupled with SNA1 whereby there is a perception that corporates come 1st.
    This is a great commencing point in differentiation between Cunliffe / Key

    • Draco T Bastard 2.1

      Perhaps in reflection the govt should have owned the fibre lines we already have invested $1b into the process.

      The government should own the entire telecommunications sector. Having private investors has cost us $17b dollars in loss just for Telecom. Add in the other telco’s and the loss goes up.

      We are, IMO, a minimum of five years behind where we would be if telecommunications hadn’t been deregulated and sold.

      • billbrowne 2.1.1

        Yes, at a minimum Chorus should be re-nationalised, they own both the Copper mine that the NZ people paid for and the fibre mine that the NZ people are paying for.

      • srylands 2.1.2

        Don’t be ridiculous.

        That table suggests that the Crown would have recieved the same dividend stream from BNZ had it not neen sold to NAB! Without a sale there would not have been a BNZ.

        Same with Telecom – if it had stayed in State ownership why do you think it would have performed exactly the same over the last 23 years?

        • Colonial Viper 2.1.2.1

          Of course Telecom wouldn’t have “performed exactly the same”: it would have instead extracted less money out of communities, and it would not have shipped those monies overseas.

          That table suggests that the Crown would have recieved the same dividend stream from BNZ had it not neen sold to NAB! Without a sale there would not have been a BNZ.

          BULLSHIT.

          The Government could have recapped BNZ easy.

        • KJT 2.1.2.2

          Looking at the SOE’s over the same time period the evidence is that Telecom would have performed considerably better as under State ownership. AND the dividends would have stayed in New Zealand.

          AND. Kiwibank shows the value of a State owned bank, for keeping the banking cartels charges within reason, for one!

        • Telecom CEOs or shareholders wouldn’t be as rich, but our businesses and communities would more than make up the difference.

        • Draco T Bastard 2.1.2.4

          Without a sale there would not have been a BNZ.

          Actually, without the government bailout there wouldn’t have been a BNZ.

          The sale of Telecom didn’t magically make it start producing profit. It was doing that throughout the 1980s. No, what the sale did was shift that profit from being put directly back into the network and upgrading it to being dished out as dividends to the free-riding bludgers otherwise known as shareholders. which is why we’re now having to pay out even more taxpayer dollars to upgrade the network.

          Same with Telecom – if it had stayed in State ownership why do you think it would have performed exactly the same over the last 23 years?

          I don’t think it would have performed exactly the same – I think it would have performed better:
          1.) We’d already have FTTH across most, if not all, of the country
          2.) We wouldn’t have to be paying out billions to corporations to upgrade the network and
          3.) IMO, we wouldn’t be paying anywhere near as much per month for telecommunications

          Telecom is the proof that the private economic system doesn’t actually work.

          • millsy 2.1.2.4.1

            “Actually, without the government bailout there wouldn’t have been a BNZ.”

            Given the on-going social costs resulting from Ruth Richardson’s austerity package, to pay for the bailout, one wonders if it was worth keeping, especially as it is now 100% Australian owned, Bank of NZ being in name only.

        • millsy 2.1.2.5

          The old NZPO and its predessor, the Post and Telegraph department, seemed to do OK with rolling out phone lines to almost all of the country (and telegraph lines before). Not to mention other communications services. I shudder to think what would be the case if we left it up to the private sector to build our telecoms network.

          Compare and contrast with broadband today, where you are stuffed if you leave the cities.

          National’s original proposal of a single fibre to the home network, that all retailers could use was a good one, and even its watered down proposal of local fibre companies was pretty good. But Chorus was allowed to join in and the whole thing became a shambles.

          Hopefully Messiah-boy will sort it when he gets in next year.

          UFB could unlock this country’s potential in a way that we could never imagine.

          • Draco T Bastard 2.1.2.5.1

            I shudder to think what would be the case if we left it up to the private sector to build our telecoms network.

            We wouldn’t have one as the BS with paying Chorus billions to do the job, despite having the income to do it before hand, shows.

  3. Blue 3

    It was quite funny to see that although the political journalists seemed to see Question Time yesterday as some sort of victory for Key, complete with stupid Herald cartoon suggesting that Cunliffe had been ‘knocked out’, the fact is that the issue he raised got significant coverage today.

    Forcing Steven Joyce into this is nothing to sneeze at.

  4. tracey 4

    Good to see nbr doing serious reporting. Political journos hang your pasty faces in shame

  5. bad12 5

    Right now the price of a ‘copper wire’ connection is probably not foremost on a lot of peoples minds, however the machinations of the Prime Minister in having the ex Telecom ‘Chorus’ set it’s own prices for such internet connections is likely to become as damaging to Slippery’s Government as was the GCSB Legislation,

    i have to wonder here what the rumored involvement of both Hooten and Farrer in the recently set up group opposing the Governments involvement in ‘price fixing’ on behalf of Chorus shareholders spells for the PM,

    What could Farrar and Hooten expect to gain from the Prime Minister on this issue, a ‘back-down’ where the Commerce Commission gets to set the price of internet access for the average Kiwi household would come at the price of a messy public campaign which would see Slippery, His fingerprints already all over the deal, lose even more appeal in the wider electorate,

    Perhaps the ‘two spinners’ of the National Party message have decided to exploit the slide in Nationals popularity with a view to a little night of the long knives leadership coup in favor of their particular pet candidate,

    Having played carrot and stick with both 2 degrees and voda-phone over their initial support for the campaign against the ‘copper tax’ Slippery’s right hand man Steven Joyce is in this little drama right up to His armpits, the rumor being is that to pacify the other tel-cos He has had to earmark the best part of the old analogue tv spectrum to be dished out to them on the cheap,

    Perhaps Slippery should have listened to Ruth Richardson’s historical call that Government has no business in business, especially one as inept as this one is proving to be,

    The PM is probably busily scratching out the hairy implants from His bald spot wondering why, recently, everything He touches seems to turn to s**t and it wasn’t like that in the good old money trading days,

    At the time of course He was doing exactly what He was told to do from the big boys upstairs who have fall guys like Slippery as the well paid middle men for times when the brown stuff hits the fan,

    i can’t see any minor servant of the Government in sight to take the fall for this latest of foot in mouth brain fades from our Prime Minister…

  6. alwyn 6

    It is a bit futile complaining that the MSM are reporting this as being a fall at the first fence by Cunliffe when he set himself up for it.
    It was Cunliffe who has promoted his activities as being a battle with his talk that “the party is on a war footing” and “We are taking the fight to the Key Government”. He also claims that “Key knows I have his measure”.
    Add to this the the statement that “I’m not expecting to have his trousers around his ankles at the first meeting”, with it’s implication that it won’t be long though and you have to expect that the media will highlight the fact that it took him THREE attempts to read a dozen words of a sheet of paper before he got them right.
    Under promise David, under promise and then out-perform. You are doing it the wrong way round.
    If you want to see how the questioning works best look back at Lockwood Smith and Tony Ryall in 2005-2008.

    • framu 6.1

      yes, because stumbling over one words is totally the big story here.

      while i agree that complaining about the MSM is a little futile – i find your sticking up for shit journalism a bit weird

      Does stumbling over one word really negate all the quotes youve picked out? Really?

      Or is it just a distraction from the substance of the question and the reply it got?

      • alwyn 6.1.1

        You misunderstand what I am trying to say.
        I shall try and be a bit clearer.
        It was Cunliffe who spent his time giving quotes to the press about how he was going to take Key apart and basically saying that Key would crumble before him.
        Then he goes into Parliament and makes a fool of himself.
        I am NOT sticking up for shit journalism as you call it.
        Stumbling over a word is totally trivial. It does not however fit in with the image Cunliffe was claiming for himself as the man who would demolish Key.

        • framu 6.1.1.1

          ok – i get you now 🙂

        • karol 6.1.1.2

          Yet you quote Cunliffe as saying this:

          “I’m not expecting to have his trousers around his ankles at the first meeting”,

          And so he was not building up expectations as you claim. The line about taking on Key was for the party in the context of the leadership contest.

          To the media, he said in effect, “I know I will make mistakes, I am not expecting an instant knockout blow in the House – we are beginning a long election campaign.”
          Of course, the short term memory, drama queens in the MSM want instant results.

          • alwyn 6.1.1.2.1

            Now I am getting seriously concerned.
            Are you saying that Cunliffe will say one thing to a party audience, where he is trying to get them to vote for him, and then feed another line to the media?
            What does he actually mean then. The options appear to be
            1. The members of the party are so stupid they won’t even realise I don’t actually have any real belief that I can or will do what I am telling them.
            2. The members of the media are so stupid that they won’t find out that I was boasting about what I was going to do to Key in the party meetings.
            3. I can’t remember what I said last week.
            4. Why should I say what I mean. I’m a leading Labour politician and it’s my right to lie whenever I feel like it.
            Incidentally, everything I quoted him as saying was reported in the media, as direct quotes mostly. Are you sure that he only said it to party audiences?
            As for your interpretation that he was saying “I know I will make mistakes … ” can you show me ANY occasion when he has admitted to making a mistake?

            • karol 6.1.1.2.1.1

              Oh, alwyn, we all frame things differently to different audiences – nothing sinister about it.

              See Gordon Campbell on that.

              nd since it will be Labour Party members, unions and Labour MPs who will decide the leadership contest, it was inevitable that hating on John Key would become a default option, and an easy way of looking staunch. Yet to outsiders, the fixation the three contenders seem to have with the taking down of John Key – up to and including Shane Jones’ rant last week about torturing his testicles – is kind of embarrassing. Hopefully, it has just been campaign rhetoric. Because if the successful candidate wants to reach a wider audience and win the 2014 election, Labour will need to dial it back.

              Cunliffe said to members he can take on Key – people were especially calling for that re-election debates, etc.

              But there’s more to leadership of a team than on-on-one encounters between leaders.

        • Anne 6.1.1.3

          Cunliffe was claiming for himself as the man who would demolish Key.

          He didn’t say he was going to do it overnight and Alwyn knows it.

          Beware the worm that turns?

        • felix 6.1.1.4

          “It was Cunliffe who spent his time giving quotes to the press about how he was going to take Key apart and basically saying that Key would crumble before him.”

          alwyn, I think you’re mistaken. I can’t seem to find a quote of Cunliffe saying anything of the sort.

          I can find a couple of him say he would “take the fight to John Key” but that’s nothing at all like what you claimed.

          Would you like to rephrase?

          • Colonial Viper 6.1.1.4.1

            alwyn is permitted his personal alternate reality…

          • alwyn 6.1.1.4.2

            You won’t find him saying those exact words but that isn’t what I was claiming.
            As you say he said he would take the fight to key.
            He also said that it would be war, although I haven’t pinned down a reference.

            He did say “Prime Minister John Key should be worried” and “John Keys got a problem”
            http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11125165

            He also said “We will be taking the fight to the Government” and “I believe I have his number and I believe he knows I do”
            http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11125621

            He also opined that “I’ve got his number” and “I can foot it with John Key … in any debate, anywhere, anytime”
            http://blog.labour.org.nz/2013/09/13/winning-why-are-you-the-one-to-take-on-and-beat-john-key-labour-leadership-qa-14/

            If that isn’t claiming he was going to best Key rather easily I don’t know what is.
            Then he couldn’t even read out his questiom!

            • karol 6.1.1.4.2.1

              Cunliffe not only stated his questions, but as I said in my post, that and Key’s answers raised serious questions from some journalists/commentators. And Key’s answers show him to be a little on the dodgy side.

              But, as CV says, Alwyn’s comments seem to come from some ARG.

              • Arfamo

                I watched that stumble on TV One Newsotainment. It was amusing. Even David laughed at it. It’s yesterday’s news, and not really even news. Why is anyone getting their knickers in a twist over it? People are far more interested in everything else Cunliffe is saying and doing. Jesus, if we focussed on the number of stupid mis-speaks Key makes we’d never notice what else he’s up to.

                • Pascal's bookie

                  ” Why is anyone getting their knickers in a twist over it? ”

                  Lack of anything substantive to criticise I would think.

            • felix 6.1.1.4.2.2

              “If that isn’t claiming he was going to best Key rather easily I don’t know what is.”

              Then you don’t know what is.

              Every one of those statements implies being ready for a tough battle. Nothing in there about an easy besting at all.

  7. tracey 7

    And yet the pm was still exposed again… loss of memory… phone calls with the chair is direct interference in a company. Only last week srylands was hollering how they cant do this.

  8. Sable 8

    I wonder if the public at large really understand this?They are misinformed at every turn by the sleazy mainstream media and Key’s isn’t about to fess up.

    I think Cunliffe and the Greens really need a proper nationwide media campaign of their own outlining this and other shortcomings of this current government explained in terms people can readily understand.

    The only way to bypass the MSM’s lies is to take them on at their own game.

    • Anne 8.1

      Cunliffe and the Greens really need a proper nationwide media campaign of their own outlining this and other shortcomings of this current government explained in terms people can readily understand.

      That is what I thought Red Alert was going to do… 😡

      • Draco T Bastard 8.1.1

        Haven’t been over to RA for years now.

        • felix 8.1.1.1

          Hilariously, despite two new posts since Sunday, redalert authors still haven’t mentioned that the NZ Labour Party has a new leader.

          Amazing.

          • Colonial Viper 8.1.1.1.1

            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            This can’t be happening
            etc…

          • Anne 8.1.1.1.2

            Well, look who the moderating authors are… all of them ABCers. It was set up by the ABCs for the ABCs. We just didn’t know it.

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