10/05/2007

NATIONAL ON TELECOMS REGULATION

Here's an interview in the Herald I did with National deputy leader Bill English in which he fleshes out National's view on Government investing in broadband infrastructure. He said National was looking at the Australian Labor Party's proposal to spend up to AU$4.7 billion on a national fibre network for the country if it comes to pwoer next year. But he's skeptical of such investments, which makes it unlikely that National would support and Government buy-back of Telecom's network if it was put on the block.
National has a lot of work to do to come up with some credible policies in the area of telecoms and IT, but at least they're finally talking about the issues.

Some additional views from Bill English:

On Government subsidisation of broadband infrastructure

“There’s a growing expectation among the public that they’re going to have access to higher quality broadband. It’s obvious there are parts of the country where that’s uneconomic for investors. It’s not clear the extent of that problem.”

On the Government’s proposal for operational separation of Telecom

“It has to be done in a way that doesn’t stop the evolution of technology.”

“It should be consumer driven, not producer or investor driven.”

“Too much of the talk about broadband is driven by the people who want to sell the technology. It’s still unclear what the average household is willing to pay for broadband. The killer applications are not obvious.”

“We don’t want to see public investment competing with private investment.”

“There’s no lack of fibre in our big cities and no lack of people trying to do it another way, like electricity lines companies who have the expertise to sling fibre through their networks. They’ve got piles of cash.”

“We want to signal to those communities at the end of the network we’re not going to abandon them.”

“It shows the difficulty Government gets into when it tries to make business decisions as opposed to regulatory decisions.”

“That big issue, which has been a big issue for six or seven years, has been cleared off the table. Now the issue is whether enough people have access to this new infrastructure.”

“Telecom is signaling correctly on behalf of its shareholders that it can’t wait around.”

“The Government and its officials may not have the understanding of the dynamics of investment that’s required.”

“We don’t mind the debate about it, as long as it doesn’t drag on.”

“Lobbying has no risk, investing has huge risk.”

“What’s going to matter is whether the regulatory regime gets the balance right between risks and return, in a way that makes investment worthwhile.”

On the Government’s digital strategy:

“I think it’s a bit overblown. The basics are straightforward. How does a Government get the rules right for this market?”

“[The digital strategy is] not a replacement of dealing with those tough issues and the one before the Government now is a pretty tough one.”

On National’s low-key approach to telecoms policy.

“Sounding off about it doesn’t always earn much, particularly when the issues have got so technical. “

“We’re signaling that is has increasingly become another infrastructure issue. That means the Government is going to have to pay attention to who has got it (Telecom’s network).”

On attracting more IT multinationals to base operations here:

“We’re a bit skeptical of bolt-on and buy-in businesses. The track record is that if they can’t get good roots down, they don’t hang around.”

On the local IT industry:

“It’s a tough industry, it’s competitive, it’s risky and New Zealand capital has tended to stay away from it.”

“The problem is access to local capital. They end up sourcing so much of their capital from overseas, it’s a natural progression that their ownership goes overseas.”

“I don’t think [the IT sector] should be looking to the Government to leverage other people’s capital into their business. If you’re perceived as risky, maybe investors are right. Maybe it’s pretty risky.”

“The Government is more inclined to some strategy to fix a problem. We’re a bit more inclined to pay attention to the basics. There’s a lot of capital sitting around in New Zealand.”

“[IT entrepreneurs] would regard the current issue around Telecom as probably the most critical issue.”

On listed IT stocks:

“I don’t think there’s any doubt there’s going to be a lot more IT capital on the market. In ten years it’s going to look almost completely different.

“There’ll be more and more [IT listings] as the market adjusts to the new economy.”

On setting the regulatory framework for telecoms:

We don’t have a role in it, but we hope to after 2008.

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