NZ Opposition calls for halt to broadband rollout

New Zealand's opposition Labour party has demanded a halt to the rollout of the government’s Ultra-Fast Broadband (UFB) project and Rural Broadband Initiative (RBI) following revelations that an ex-Telecom NZ employee was a central figure in a long-running anti-competition court case against the incumbent.

Telecom was fined NZ$12 million yesterday for charging competitors disproportionately high prices for wholesale access to its network. The NZ telco regulator, the Commerce Commission, claimed that this prevented access seekers from offering retail end-to-end high-speed data services on a competitive basis.

Telecom has announced it would appeal the verdict.

Labour communications spokeswoman Clare Curran today accused Bruce Parkes, the NZ Government’s chief adviser on broadband, of beinginvolved in attempts to legislate for a ten-year regulatory holiday for Telecom New Zealand. Parkes headed the Telecom division responsible for developing and selling products such as data tails to other providers and was named in Justice Hansen's written judgement yesterday.

Curran said that the matter raises serious questions as to competition and regulation around government’s broadband projects. Labour has demanded an independent review of the processes around the UFB (ultra fast broadband) and RBI (rural broadband initiative) projects, to be conducted by an independent expert “as the New Zealand industry is too involved and inter-connected on the issues,” Curran said.

Parkes is employed by the Ministry of Economic Development as the Deputy Secretary of Energy and Communications, a role that he has held since February 2009.

He spent twelve years at Telecom New Zealand, starting in 1993, and moved onto Contact Energy in 2006 after the incumbent’s controversial CEO Theresa Gattung resigned and was replaced by Paul Reynolds from BT.

Today the New Zealand Government announced that it had signed on the dotted line to award the RBI to Telecom and Vodafone, as previously agreed. The contract is worth $285 million and the government has also excused Telecom and Vodafone from anti-competition provisions in the country’s Commerce Act to permit them to participate in the project.

Parkes was one of former Telecom executives accused of conflict of interest after taking up Government-appointed positions.

In November last year, Labour accused former Telecom CTO Murray Milner of conflict of interest after it was revealed that he consulted for Chinese telco vendor Huawei while serving as director of the government agency in charge of the UFB rollout, Crown Fibre Holdings.

Huawei is a bidder to supply equipment for the UFB.

Milner is one of two senior former Telecom employees in the CFH executive. CEO Graham Mitchell is a ten-year Telecom veteran, having held senior management positions at the incumbent including group general manager of business, wholesale and network services.

Last December, Telecom was chosen by the CFH to take part in priority negotiations in 25 of the 33 areas of New Zealand for the UFB.