Labour even wants state owned ISPs!

A few years ago the SOE Kordia purchased the ISP Orcon. I wasn’t sure it was a great idea for a government owned enterprise to be purchasing private companies in an incredibly competitive market. However SOEs are meant to make decisions for commercial reasons, and presumably Kordia saw it as adding value to their business.

Yesterday Kordia sold Orcon. Just as their purchase as a matter for the board, so was the sale. Neither require or gain shareholder approval. Ministers would have been informed, but are not needed to consent.

But Clare Curran has put out a release suggesting that Orcon is a strategic asset and that somehow it is all the Government’s fault. Very bizarre. Her release says:

The sale of the state-owned Telco Orcon is shrouded in mystery and appears to be yet another example of short-term thinking by this Government, says Labour’s Communications and IT spokesperson Clare Curran.

It worries me when MPs do not realise that there is in fact no Government decision involved. Does Labour think Ministers should run SOEs directly and decide for them what assets they purchase or sell? Why have boards of directors?

Ministers would be consulted on decisions like this, but are not the decision makers.

“The bottom line is the Government should have decided whether Orcon is now a strategic asset and if it is an important means to drive uptake of ultrafast broadband.

The suggestion that Orcon is a strategic asset is staggering, and shows that I think some in Labour regard everything as a strategic asset. Orcon has around 5% market share and if Labour think you can consider Orcon as a strategic asset, then I can only assume they believe the Government should purchase Chorus, Telecom, Vodafone, 2 Degrees, Inspire Net and well just about every company in New Zealand.

Then on this new definition of strategic asset, they should buy both Foodstuffs and Progressive because what is more strategic than food? But wait if a 5% market share is also now strategic, they better buy up the 4 squares also!

Now you might say Labour have not said Orcon is a strategic asset, just that it might be. Well I think such distinctions are meaningless when a company is so clearly a million miles away from being a strategic asset.

If I was attacking the decision to sell Orcon, I’d focus on whether Kordia has actually made a profit or a loss on the purchase. Did Kordia lose taxpayer money by buying an ISP?

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