The Government should put consumers first and regulate mobile termination rates to keep call costs down, Labour spokesperson for communications and IT Clare Curran said today.

“High mobile termination rates are a barrier to entry for new players in the market, which leads to less competition and higher prices,” Clare Curran said.

“While Vodafone and Telecom have now offered to lower termination rates by around 80 per cent, it still does not go far enough to reduce the major issues for new entrants.

I think it is a good thing that Labour have learnt from their mistakes, when they did a deal with the two telcos in 2007, rather than accept the advice to regulate.

Slightly amused that their formal policy stance comes just days after Clare had a whack at Matthew Hooton for implying Labour support the Drop the Rate, Mate campaign.

The Drop the Rate, Mate campaign also yesterday released their submission to the Minister, including some research done by Curia of 400 mobile phone users. Key findings were:

• Only 18% of respondents wanted the Government to accept the binding promises of Telecom and Vodafone, while 78% wanted the Government to regulate
• 79% agreed that Telecom and Vodafone are overcharging New Zealanders
• 85% agreed with the proposition that it should cost the same to call someone on a different network, as to call someone on your own network

The full results are here – EXCELTIUM MOBILE PHONE RESULTS MARCH 2010 PUBLIC.

Chris Barton in the Herald is not shy with his opinion of what the Government should do:

So far, you have to say, Joyce has played with an exceedingly straight bat. But it won’t be easy negotiating the quagmire of a split recommendation by Commerce Commissioners on mobile termination rates. Two argue for putting heads in the sand while one voice of reason says enough is enough – Vodafone and Telecom have had more than enough time to sort this out and have, time and again, shown they can’t be trusted.

Joyce will be familiar with the sordid last-minute deal stitched together between new mobile entrant 2degrees and Vodafone last year. While the public isn’t allowed to know about this venality, anyone who cares to can find it online (search under “NZ Cellphone racket”). It shows that Vodafone will move if it has a gun to its head. Joyce will also be familiar with www.droptherate.org.nz and www.fibretothedoor.co.nz – two campaigning websites where the public is helping the minister make up his mind.

Go there at once.

What fed-up consumers want minister, is Clint Eastwood’s Dirty Harry. For some of us, it’s so bad, we don’t just want Clint to pull out his .44 Magnum and ask whether the punk feels lucky. With Telecom and Vodafone, we want him to pull the trigger.

The challenge for the Minister, is how quickly can a regulated price be established, if he chooses to regulate. The undertakings would take place more quickly. However the likely regulated price would see prices by 2011 drop further, and remain lower.

I generally don’t like unsolicited strangers at my front door trying to sell me stuff.

So when the young guy turned up last week I adopted my usual, somewhat abrupt, I’m-not-buying-anything-from-you manner.

“Hello, I’m from Telecom and just wanted to ask whether you’re happy with your broadband and phone service?” …

But because I may have just witnessed a landmark event in telecommunications history – the first occasion in my lifetime that Telecom has actually touted for my business.

The slothful corporate has always assumed my business was its monopoly right. Has competition finally arrived?

I think that is a positive sign. May it continue.

• Maori make up 11 per cent of the region and 9 per cent of local body winners.

• Asians comprise 19 per cent of greater Auckland but hold just 4 per cent of council seats.

• Pacific peoples make up 14 cent of the population. They, too, have 4 per cent of elected local body positions.

So over the Region, Maori are barely under-represented at all – nothing compared to Asian representation or Pacific representation. So the issue is not about representation, but whether the Treaty demands reserved seats for Maori.

Barton says:

The slightly ajar door has the Maori party scrambling to come up with a proposal that would be acceptable to National – understood to be just two, rather the previously proposed three, seats. And with candidates required to show affiliation to mana whenua (local Maori with ancestral ties to the land) and voted in by Aucklanders on the Maori electoral roll.

That is an improvement, but unless they increase the number of ward seats, there should be only one seat for those on the Maori roll – as Maori also get to vote for the at large Councillors.

An issue that may be worth considering, is that some of those currently on the Maori roll, may not want to lose the right to vote in a geographic ward, and be forced into a Maori ward. Normally you can only change rolls after each census – so not until 2011.

Also what if someone wants to vote on the Maori roll for parliamentary elections but would like to vote in a geographic ward for the Auckland Council elections? Perhaps there should be seperate rolls?

Why should there be Maori seats?

It’s the Treaty, stupid. Why the Government chose to ignore the Royal Commission’s extensive research and consultation on this matter is difficult to fathom. The Commission concluded there should be three safeguarded seats for Maori – two voted from the Maori electoral roll and one appointed by a mana whenua committee.

And the Royal Commission got it badly wrong. Even if you agree that there should be Maori seats, their proposal had a vote for a Maori Councillor worth four times as much as a vote for a geographic ward councillor.

The principle of equality of vote (within a small tolerance) is a vital one.

Its primary reason was “to give effect to obligations under the Treaty of Waitangi”. General considerations of equity and fairness of representation also came into play, said the Commission, but to a lesser extent.

It is highly debatable that the intent of wording of the Treaty requires reserved Maori seats. They only came about through a desire to allow Maori to vote despite not having individual land titles. Now yes they have assumed a different significance over time – but it is all too simplistic to just call them a Treaty obligation.

The provision of three safeguarded seats for Maori is also consistent with the spirit and intent of the Local Government Act 2002, which requires local authorities to establish processes for Maori to contribute to decision making.

And there is a big difference between a process to contribute, and reserved seats.

I don’t agree with the position Barton advocates, but it is a very good article.

We do know fibre-optic cable is at the centre of Joyce’s rewiring plan and the mechanism to get there is the much-vaunted public-private partnership.

So far so good. But just who does Joyce plan to partner with? And will he be seduced by Telecom’s wiles?

There’s no doubt Telecom would love to bed Joyce. Such a tryst – Telecom building, operating and no doubt, wanting to own, the new wires – would secure the firm’s monopoly dynasty forever.

I think Mr Barton needs to take less Viagra before he writes his column

But it’s also clear such a dalliance would be a terrible mistake. Not to mention a betrayal of voter trust and a very poor return on taxpayers’ money.

And getting the maximum return on the Government’s investment is crucial.

If Joyce is still uncertain about what to do, he should re-read the very fine piece of analysis prepared for Internet New Zealand by Network Strategies. There, in glorious return on investment detail, is a simple answer to who the Government should partner with instead of Telecom – electricity lines companies.

Why? Because if New Zealand wants to rewire its aged telecommunications to a fibre-optic future, the electricity lines companies are the cheapest, most efficient way to do it.
Plenty of power poles and ducting are already going by our homes, already with resource consent, making it much easier to string or trench fibre to our doorsteps. How much cheaper? Without the lines companies, Network Strategies estimates a fibre network will cost $5 billion.

With the lines companies on board, the cost drops to $3 billion – making the Government’s $1.5 billion investment look like a very realistic sum to fulfil its election promise.

A $2 billion difference is far from insignificant. I am of course on the Board of Internet New Zealand, but we were as surprised as anyone I think that the research turned up such a massive price difference.

There are other reasons why this is very good idea. Most of the 27 lines companies in New Zealand are owned by consumer trusts – an ownership structure that tends to be sympathetic to longer payback periods and fits well with local initiatives that recognise the importance of broadband to a region’s economic and social wellbeing. And some, such as Vector and Counties Power, are already providing fibre to homes or businesses.

And even more importantly, lines companies do not tend to be in the business of providing services over their lines – they are an access provide rather than a service provider. This is actually crucial as you then avoid a vertically integrated monopoly, and then multiple service providers can comptere and offer different packages over the fibre.

But there are two problems. The first is what such a network would do to Telecom’s share price. There’s no doubt it would have an unsettling effect. But if the new wires are “open access”, it’s hard to see how Telecom can complain too much.

Open access means companies get equal access to the infrastructure on non-discriminatory terms and conditions, so all comers are offered the same wholesale products or services at the same price and equivalent conditions. In other words, consumers get choice and Telecom competes for business with everyone else, probably getting a whole lot more efficient in the process.

The impact on Telecom is a real issue – not just in terms of share price, but also their fibre to the cabinet plans. Would they continue? Would they sell Chorus if the line companies get the nod to build the fibre to the home network? Could there be a win-win – maybe some partnership with lines companies and Telecom/Chorus? So many issues, which is why a decision should not be rushed.