The “cast in stone” permanent obligations of majority New Zealand ownership and free local calls will be removed from law after the government dropped a last minute Special Order Paper[SOP] on the Telecommunications Amendment Bill last week:
In the explanatory notes in SOP No 247, which was introduced on Tuesday, it reads: “Makes changes to provisions relating to deemed TSO instruments and removes references to the KSO (Kiwi share obligation) (new clauses 6B, 7A, 7B, and 23HFA). These amendments are to reflect that the KSO will not be operative following the structural separation of Telecom.”
National are pushing a line that although it won’t be law it doesn’t matter – there’ll be a “deed” with the 2 new companies (Telecom Retail and Chorus) to protect some of the Kiwishare obligations. But this doesn’t wash.
A deed can be much more easily removed than a law. The minister responsible would have no need to comment, let alone do anything, if the new (privately owned) company wants it removed. It could be gone by lunchtime if a majority of shareholders approve – and those shareholders would have a monetary incentive for that to be so.
Telecom Retail will have no remaining obligation on its foreign ownership at any rate. Previously, as a strategic asset, no company could own more than 10% without government approval and a majority of ownership had to be in New Zealand hands. Now the government is happy for more of New Zealand to be foreign owned, and more of our profits to head overseas.
Chorus retains the foreign ownership restrictions, and Telecom Retail the free local calling obligations. But only by deed, so after a suitable period of time Telecom shareholders could easily change the rules and start charging more for rural areas than urban ones, or cancel free local calling entirely.
Perhaps most concerning was the manner in which this change was dropped on the public, not in the original bill, not when there was any chance of public comment or submission, but as a fait accompli, rushed through in the hope that there would be no chance of noticing.
This is similar to National’s penchant for urgency, to railroad through the dark bits of their agenda without comment. The New Zealand public deserves its chance to have its say on National removing their rights.