The Government appears to be out of parliamentary allies with which it could push through changes to copper broadband pricing.
This afternoon, NZ First, the Maori Party and UnitedFuture leader Peter Dunne said they would not support legislation that allowed the Government to set the price Chorus could charge for access to the company's copper network.
A discussion paper in August from Communications Minister Amy Adams suggested the Government could set the combined price Chorus could charge for a copper phone line and broadband connection between $37.50 and $42.50 a month.
A Commerce Commission determination would make the price fall further, to $34.44 in December 2014, from its current level of $44.98.
One Beehive source admitted that the Government had been blindsided by the co-ordinated statements by some of its support parties today, but there was a degree of relief.
Legislation had not been ruled out up until now, but now the highly controversial option of over-ruling the commission had effectively been taken out of its hands.
NZ First's communications spokeswoman, Tracey Martin, said a law change would leave Kiwi families paying more than they should for internet access.
Dunne said the Government should respect the Commerce Commission as an "independent regulator".
Maori Party co-leader Tariana Turia said intervention would particularly hit people on low incomes, the elderly, Maori, Pacific Islanders and rural communities who already had inferior access to the internet.
Act leader John Banks said the party did not believe in getting between commercial contracts through legislation. He had expressed the view to Prime Minister John Key, Deputy Prime Minister Bill English and Adams.
"They know the Act Party views very well, so they wouldn't be anticipating our support."
Independent MP Brendan Horan has not yet made an explicit pledge on the issue.''[N]o company should be given an incentive to be overcharging for last century's copper broadband technology,'' he tweeted this afternoon.
It is understood Horan has not been approached by the government about whether he would support any legislation.
The Green Party has also made a vow not to support overruling the legislation.
Labour leader David Cunliffe said the Government was now "isolated" on the issue.
"Labour supports the proper, independent regulatory process undertaken by the Commerce Commission and its decision to reduce copper broadband prices for all New Zealand families.''
Key's office referred questions to Adams,, who said the moves were not unexpected.
"While we have not sought support for legislation from our support parties, they have indicated to me that legislation was always going to be a challenge, so today's announcement comes as no surprise," Adams said.
Since the commission's decision, the first priority was for Chorus to meet the shortfall itself.
Ministers have downplayed the likelihood of legislation since the discussion paper was released, emphasising they would intervene only if Chorus' ability to roll out ultrafast broadband was comprised. They noted there were other ways the Government could cushion Chorus from the impact of the price cuts.
These could include giving Chorus longer to repay Crown funding for the ultrafast broadband network or guaranteeing the company's future borrowings.
The Coalition for Fair Internet Pricing called on the Government to "urgently" confirm it would not proceed with legislation that tried to over-rule or delay the implementation of the commission's determination.
"In the interests of regulatory certainty and business stability, the best thing now is for Prime Minister John Key and Communications and IT Minister Amy Adams to confirm urgently they will not proceed with any of the regulatory proposals outlined in August's Ministry of Business, Innovation and Employment discussion document, which purported to be a review of the Telecommunications Act 2001," said spokeswoman Sue Chetwin, the chief executive of Consumer New Zealand.
- Fairfax Media