Don’t subsidise fibre with copper

December 4th, 2012 at 11:00 am by David Farrar

Stuff reports:

The price of could fall by about $12 a month in two years’ time if internet providers pass on swinging cuts to Chorus’ charges that were proposed yesterday by the .

Good.

But Scott Bartlett, the boss of New Zealand’s fourth largest internet provider, Orcon, is doubtful. He said Telecommunications Commissioner Stephen Gale already seemed to be signalling “almost in code” that the commission would back down from the steep cuts when it finalised its decision on wholesale pricing in June.

Prime Minister John Key signalled that the Government was concerned about the effect cheaper copper-based broadband could have on the -optic ultrafast broadband network, in which the Government has agreed to invest $1.3 billion.

He did not rule out using legislation to overturn the proposed price cut yesterday.

I think that would be a bad thing. The Commerce Commission should be left alone to set the price of copper access based on existing competition law.  I’m a huge fan of the fibre rollout, but we shouldn’t try and get people to move to fibre by having copper priced artificially high.

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9 Responses to “Don’t subsidise fibre with copper”

  1. anonymouse (695 comments) says:

    Why not….. fibre is the future and the faster it is taken up the more services will be offered, have fibre in front of everyone’s gate but having people clinging onto copper is a strategically bad move……

    One possible alternative is to allow Chorus to turn off copper service at a certain point in time ( the Government did it with Digital TV), to promote Fibre Take up

    Also Chorus are funding a large chunk of the roll out ( presumably with existing profits), if you reduce that money, then they will expect the government to increase its funding…..

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  2. David Garrett (6,372 comments) says:

    I believe they are “swingeing” cuts…but hey, who cares about spelling other than crusty old farts?

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  3. barry (1,317 comments) says:

    Jeez – whats wrong with these bums. Dont they know that rule that says something like – “the speed doubles every x months, or the price is cut in half every x months”

    Surely they knew when this whole thing was set up that prices will be a lot less when its up and running than it was when they started.

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  4. Sonny Blount (1,845 comments) says:

    We can’t have anything interfere with the ‘Great Fibre Leap Forward’. If the market won’t comply, we must use the government to implement our infallible and superior plans.

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  5. dime (9,399 comments) says:

    Dime has fibre. Its a tocuh quicker than adsl2. costs more. Dime’s thrilled.

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  6. berend (1,632 comments) says:

    DPF: I’m a huge fan of the fibre rollout, but we shouldn’t try and get people to move to fibre by having copper priced artificially high.

    One government department fighting with another. Law of unintended consequences, and all that.

    John Key is no Bestiat, but we already knew that.

    Another National failure trying to outsocialist the socialist.

    And that same party is berating Labour for wanting to built 100,000 houses.

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  7. berend (1,632 comments) says:

    Sonny Blount +1

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  8. Rex Widerstrom (5,257 comments) says:

    David Garrett notes:

    I believe they are “swingeing” cuts…but hey, who cares about spelling other than crusty old farts?

    Well this crusty old fart just about had apoplexy when he read that. I got a mental image of Chorus executives swinging from the ropes, Pirates-of-the-Caribbean-like, wielding cutlasses.

    Stuff seems to have replaced the story DPF quoted with one that’s markedly different – calling Scott Bartlett “Kordia New Zealand chief executive” rather than “Orcon boss” for instance.

    That seems to be the new paradigm in news coverage – throw up any old mess, then sub-edit at leisure. Meanwhile a good portion of your readership have absorbed the wrong information.

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  9. Anthony (767 comments) says:

    Scott was Orcon boss and is now Korida NZ Chief Executive with Orcon being folded into Kordia – try and keep up Rex.

    Anyway, good to see DPF not afraid to criticise Key on this issue.

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