NRT: Nats killing the Kiwishare

Written By: - Date published: 11:48 am, June 17th, 2011 - 27 comments
Categories: telecommunications - Tags:

When the government sold Telecom twenty years ago, they reassured us that free local calling would be protected under a “Kiwishare”. Now National is repealing it, with an SOP to the Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill removing the relevant provisions “reflect that the KSO will not be operative following the structural separation of Telecom”. Note that there has been no public debate over this; National has done it out of the blue, by stealth. They’re even refusing to front up in the House to explain the amendments.

This will allow Telecom’s foreign owners to introduce American-style local call charging. And it has significant implications for access to information in this country. It should not be rammed through in this fashion,without consultation, without debate. The only reason for the government to do so is because they are afraid of that debate, and seek to limit the political price they will pay for an unpopular move with no benefits to New Zealanders.

This is how National operates: undemocratically. They’re making a major change to the structure of telecommunications in New Zealand, one which affects every single one of us. They should at least be saying why. Instead, we have arrogant silence.


Eddie: Perhaps more importantly, the Kiwishare prevents a foreign national from owning a majority of Telecom. It’s removal would mean there is no bar to Telecom falling entirely into foreign ownership.

27 comments on “NRT: Nats killing the Kiwishare”

  1. Rusty Shackleford 1

    WTF. Last time I checked, a phone line was 40 odd bucks. What is free about that?

    Oh no! The govt is ending its subsidies for buggie whips! Who cares?

    • The Voice of Reason 1.1

      The calls you make on the phone line are free, you muppet. The forty bucks is the monthly charge to maintain the line, whether you use it or not. Ask your parents, they’ll explain how it works.

      • Draco T Bastard 1.1.1

        I remember when Telecom had the $25/month plus charges for local calls. It was awesome. I assume Telecom dropped it when they realised that they weren’t pulling in as much money as they were giving people a choice.

        BTW, there’s absolutely no way it costs more than about $20/month to maintain the line.

    • lprent 1.2

      Muppet – you could have just said that you don’t know what in the hell the Kiwishare is. It would have been faster and a lot clearer than your usual method of displaying your overwhelming ignorance.

  2. Jim Nald 2

    That’s another social contract they’re tearing up.
    They’ll stealthily sell the house and land under you before lunchtime if they get a chance.

  3. X 3

    The foreign ownership restrictions remain on the Network. Its only the retail business where they no longer apply.

    TSO regarding local free calling is under the Telecommunications Act. That isn’t to change.

    The Government previously announced:

    The government recognises the importance of the TSO as a mechanism to assure the affordability and availability of essential telecommunications services. The government is committed to the option of toll-free local calling as a feature of any TSO for local residential telephone service.

    There will be no change to expected line rental prices as a result of the TSO reforms. Residential telephone line rental charge increases are currently capped in the TSO at the rate of the change in the Consumer Price Index and this won’t change.

    • So Mr X why didn’t the Government put these changes into the original bill?
      Why did it not give Labour and the Greens a bit more notice of the SOP?
      Why bash the change through?
      Why not have at least a limited submission period so that everyone can be satisfied that there is not going to be any actual change?

    • toad 3.2

      TSO regarding local free calling is under the Telecommunications Act. That isn’t to change.

      No, as I explained here, there is a significant difference. The free local calling provision is still supposedly protected. But there will be a new and far less robust mechanism than the previous statutory requirements. The mechanism to do this will not be a special rights share, but according to the Ministry of Economic Development in the Scoop link you provided, X, will be:

      …a combination of constitutional requirements on the company, a small parcel of ordinary shares held by the Government, and a Deed between the company and the Government.

      So there will be no protection of free local calling in statute law. The constitutional requirements and the Deed will be able to be reviewed by any future Government without any reference to Parliament. And if Don Brash and his Actoids are part of a future Government, you can bet the farm on free local calling being gone by lunchtime.

  4. This really is bizarre.  The Government have released a paper suggesting that the rights protected by the Kiwishare will continue to be protected by a deed and other action taken.  But this really is a constitutional monstrosity for a few reasons:
    1.  There was no consultation.  If it was necessary to remove the Kiwishare when why wasn’t this put into the original legislation.  At least they could invite submitters to submit on the new proposal before enacting it.
    2.  The SOP was tabled on Tuesday the 14th but not given to the opposition until yesterday the 16th.  Some industry insiders knew about it before the opposition did.
    3.  The SOP is technical and its effect not immediately apparent.  The opposition should have been allowed time to at least get advice on it so that its effect could be understood.
    4.  Relying on a deed for protection is crazy.  In a weeks time the executive could decide to amend the provisions and there would be no need for Parliament to be told.
    Is this really a parliamentary democracy?
    No wonder Joyce has been looking so sheepish this week.
    I saw some of the debate and a number of people asked a number of questions of Joyce.  Did anyone see him respond?  The only other things I saw were a number of nats moving closure motions.

    • Blighty 4.1

      Yeah, I love the ‘oh, don’t worry, we’ll cover it in the deed’ line.

      This is from the same government who didn’t bother to telling anyone it was doing away with the Kiwishare in the first place.

      And the deed is only for Chorus, not Telecom anyway.

  5. queenstfarmer 5

    Wrong. Free local calling is not ending. To quote Computerworld:

    Yes, it appears that sacred cow ‘free local calling’ has not been slaughtered. The last-minute Supplementary Order Paper (SOP 247) added to the latest Telecommunications Amendment Bill will scrap the Kiwishare. But free local calling is safe because it’s part of the Telecommunications Service Obligation – who knew!

    To quote the Minister:

    “No, this is not the end of free local calling or the restriction on price increases.The Kiwi Share Obligation in regard to local calling was superseded ten years ago by the Labour government with the TSO deed. That TSO deed obligation will continue and it will be split between the separated companies – Telecom and Chorus.

    Labour is either unaware that their government made the change or are deliberately setting out to confuse,” Joyce replied.

    • Zorr 5.1

      If this wasn’t something they were afraid of the opposition finding out, why is the government being so deliberately devious as to try to slip it in there at the last possible moment?

      • queenstfarmer 5.1.1

        It wasn’t kept secret, see The Baron’s post below. But the premise of this article – that free calling will end – is clearly incorrect, according to Computerworld who’s reportage of telecommunication matter I am happy to rely on. In fact it appears that the KSO has nothing to do with free calling at all.

  6. The Baron 6

    Slow clap, morans:

    1. The Commerce Commission argues that NZ’s comparatively low value in landlines is due to the kiwishare – see here, page 15:


    “A key driver of price levels and price structure in the fixed line voice market is the Local
    Residential Telephone Service Telecommunications Service Obligation (TSO or formerly ‘Kiwi

    This is because you don’t get “free” local calling at all – you pay for it with the fucking astronomical monthly line rental charge. Click the link for more, though beware – there are some big words in there kids.

    2. No consultation? Here is a discussion document that contemplates why the removal of all this may be required. See section 6, page 25: Plenty more discussion on this in the context of the bill and SOP – but you can find those yourselves on the parliament website.

    That you’re too stupid to realise that consultation has been and gone and you missed it is a whole pile different than no consultation.

    Simple summary, cos I realise I may have lost many of you already – this will likely mean better value phone services, and you had plenty of opportunity to comment. Oh noes, the evil nats strike again!

    Pretty poor work, Malcolm. But then again, you’re a partisan hack. Is getting fisked like this why you no longer allow comments?

    • Ah page 25 of a document that was hidden in a disused filing cabinet in a pile of documents 2 metres high in MED’s basement!  How could we miss it.
      Three questions though.
      1.  If it was consulted on back then why wasn’t the change part of the select committee recommendations?  The report back by the select committee was on May 16, 2011 and the document was released in September 2010.
      2.  Why wasn’t it part of the original bill that was introduced in November 2010?
      3.  Why the last minute urgency and why wasn’t the opposition given the SOP on Tuesday when it was tabled?
      One possible answer is that Joyce forgot to include it,

      • The Baron 6.1.1

        Micky, your shortcomings are not evidence of a conspiracy.

        For what was such a secret document from MED (you’re challenging the activities of the impartial public service too to fit your conspiracy? the horror!) plenty of people seemed to realise what was going on and comment on these issues:

        If you read the documents around the Bill and SOP, you would see that issues such as these were indicated as something that would come later, partially because they would only be necessary if telecom was selected. If you actually READ the documents I have indicated above, you’ll see that – come on man, you’re a lawyer, you can read, right?

        Shall I call you and explain it in smaller words? I have your number thanks to your fucking lame letter to Whale Oil. (I thought there was no credit card details exposed by the way – so what are you wahhing on about?)

        • mickysavage

          Shesh Baron
          Why do some engage in personal attacks rather than addressing the issues.  And why do you attempt to win an argument by belittling your opposition?
          Thank you for the explanation.  Yes the choice of telecom may explain why the change was not covered in the select committee report back.  No I have not spent the past few days reading all of the paper on the issue but I believe my criticism of undue haste is valid.
          The announcement that Telecom was a preferred supplier was made on May 24.  But, why still the haste?  Why drop the bill on the opposition at the last moment?
          I am obviously not an insider on telecommunication issues and I presume you and Mr X are but this is precisely the problem with rushing changes through.  There is no ability to review and no trust.  The opposition are not given the opportunity to comment or make suggestions and stuff ups happen.
          This “trust me I know what I am doing” stuff honestly does not work.

  7. Lanthanide 7

    Apart from the acronym “NRT” tagged onto the name, there’s no clear indication that this has come from No Right Turn.
    People who aren’t familiar with that as another blog, won’t know what NRT means, or that this is essentially a guest post.

    • queenstfarmer 7.1

      Perhaps whoever accepted this as a guest post could (a) tell NRT it is wrong, and (b) post a correction.

      [lprent: It is always dangerous to suggest what we should do – see this and it is viewed a evident attempt at self-martyrdom (see the policy).

      Posts here are are matters of opinion with supporting links to fact. They are not guaranteed to be perfect and we have no intent for them to be so. The comments section is there for you to disagree, and you’ll usually find somewhere here to disagree with you.

      However, trying to tell us what we should do on our own site will usually result in you getting a swift eviction as wasting our time. I really can’t be bothered with anyone stupid enough not to figure out what the probable response is. We put the about and policy there for a reason. Read them so I don’t have to waste moderating time on you. ]

      • toad 7.1.1

        The post at NRT is wrong only in one minor regard.  That is that the change will not automatically allow for the end of free local calling, as this is proposed to be protected by a Deed between Government and Telecom2.
        However, it still severely weakens the protection, as some future government can just of its own volition agree to amend the Deed.  That is a far lower level of protection than that which exists at the moment, under which a Government would have to get Parliament to agree to amend the legislation.

        • queenstfarmer

          It’s not wrong in a minor regard – the very first sentence talks about free calling, and then the first comment about the result of the change is “This will allow Telecom’s foreign owners to introduce American-style local call charging.”. So it’s wrong on its main premise.

          It’s also wrong when it talks about “Telecom’s foreign owners”. Telecom is majority NZ owned by law, and the network company which will inherit local calls will remain so.

    • lprent 7.2

      ...there’s no clear indication that this has come from No Right Turn.

      Agreed. Which is why I usually write a paragraph on the front when I repost them. But there isn’t a standard. It is difficult to see how there could be – we’ll get criticized whatever way it goes.

      I have been criticized for writing material to make it clear where it comes from. For expressing my opinion of a post in an introduction and not being enough of a sycophant (yeah right!). For not making it the way that others thought it should appear. For not writing anything at all.

      Some of the editors (like whoever put up this one up) do it differently with the same effect.

      I think that it is simplier make it a banning offense to mention even mention the issue in comments because there doesn’t seem to be an solution that someone won’t complain about. The effort of a rapid banning it seems like a more productive use of my time than listening to or responding to critics (see the last section of the About for the rationale)

      This isn’t specifically directed at you, but I’ll get irritated if this side track goes on too long.

  8. hellonearthis 8

    I was hoping the free local calling would have become an option as the monthly phone rental (which is really high when you look at other OECD countries) covers the maintenance of local calls. If they where charged then the monthly phoneline rental could drop to match the rest of the civilized world.

  9. Colonial Viper 9

    Let’s just learn that when the NATs govern, they govern in favour of their core constituencies i.e. the monied individuals and the monied corporations, and they don’t care to justify their decisions with debate or evidence. The Right are not here to convince, convert, or win over any one else. That would be a waste of their time and energy.

    They are already on to the next bloody minded thing while the Left is left in a spin wondering what the hell happened and what is going to happen next.

  10. Well looks like the lefties may have been handed our arses on a plate here but I still believe that the process was stuffed.  If this Government wants to get these changes put through they should give notice and allow the opposition to get its collective head around the changes.

    Otherwise the risk is that we will keep jumping up and down about these sorts of issues.

    • MrSmith 10.1

      Mickey: Unfortunately jumping up and downs not going to attract much attention with our media, maybe running around in your birthday suit with your cordless phone might get some attention, But home phones and cel phone companies will become a thing of the past before long, we will all be communicating through the internet mostly soon, unless of-course you are one of the poor hicks like me that live on the edge of the earth.

  11. tc 11

    more of that relentless focus….now watch the smiley wavey clown please everybody whilst the dark lords such as joyce go about ‘their’ business.

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