Govt 'could force NZers to pay for local calls'

Last updated 10:17 10/06/2009

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Kiwis may have to start paying for local phone calls if the Government gets its way, Labour says.

A Cabinet paper prepared by Finance Minister Bill English proposed scrapping the Kiwi Share and the Telecommunications Service Obligation (TSO) which limits phone line rental increases to the rate of inflation and guarantees free local calls, Labour communications spokeswoman Clare Curran said.

The Kiwi Share clauses in Telecom's constitution prevent any shareholders from acquiring more than 10 per cent of the company, without first getting the approval of the finance minister.

Overseas shareholders that did get permission to acquire more than 10 per cent of Telecom would need separate approval to take a majority stake. The Kiwi Share also requires that at least half of Telecom's directors are New Zealand citizens.

Treasury is to lead a review looking at the Kiwi Share and TSO, Curran said.

The Cabinet paper called for the "beginning of a regulatory review programme" which was part of the Government's first 100 day commitments.

However, Communications and Information Technology Minister Steven Joyce said Curran's suggestions of were scaremongering.

"Free local calls will not be axed under this government.  The idea is not even on the table," Joyce said.

"Likewise, there are no plans to further loosen the rules around foreign ownership of Telecom."

The review's aim is to improve the quality of regulation which would "deliver big gains for the economy".

It will include a provision for the immediate removal of inefficient and superfluous regulation and will also create a system for future review.

In relation to the Telecommunications Act it is tasked with considering:

* Changing or abandoning elements of the TSO;

* Whether to retain the Kiwi Share requirements;

* The application of "network operator" to provide access to land for placement of telecommunications facilities;

* Changing the regulated services framework for recognising the applications of the way prices are set

The review will cover not only telecommunications but also the Resource Management Act, climate change, building, industrial relations, overseas investment, financial markets and local government regulation.

It appeared National was intent on "creeping dilution of our regulatory framework," Ms Curran said.

"We need to be putting rules in place that will strengthen the marketplace, look after consumers and enable businesses to run efficiently well," Ms Curran said today.

The telecommunications industry was under threat of becoming a "wild west", she said.

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83 comments
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Sasquatch   #83   08:33 am Jun 11 2009

scare tactics by Labour...didn't you lot read the article?

""Free local calls will not be axed under this government. The idea is not even on the table," Joyce said.

"Likewise, there are no plans to further loosen the rules around foreign ownership of Telecom.""

The entire article is a mute point. National will not force people to pay for local calls.. end of story.

Sam   #82   06:49 am Jun 11 2009

John Key is ready to privatise kiwibank, kiwisaver, hospitals, parks, ACC, and now wants to cancel kiwi share. His roundtable business mates are circling for the kill.

Kurt   #81   09:38 pm Jun 10 2009

What has that got to do with the government? Telecom should offer several plans. A $10 per month plan where you pay for local calls, a $30 per month with free local calls, and a $60 per month with free national calls.

Makes sense doesn't it? Although I hear you guys cannot even get flat rate uncapped broadband? At least not at speeds that the rest of the world considers broadband.

Of course, if its so regulated that the government has a role to play in it then there's the problem. Deregulate and introduce some competition!

Aubrey Hunter   #80   09:25 pm Jun 10 2009

We already do.

If you don't want to pay what you already pay for then don't pay what you already pay for..

wait... what?

Murray   #79   08:16 pm Jun 10 2009

If there is a penny-pinching way for "creeping dilution" as regards shared costs National/Act will think of it.

Plastic supermarket bags are a mere fraction of the total weight of plastics going to the landfill and are useful to householders to contain waste and pollutants and dispose of them more hygienically.

Thanks to Nick Smith and his bright ideas consumers will have to pay for their plastic bags within a couple of months which, in the Prime Minister's own words, is the government making recommendations which will increase the profits of supermarkets at the expense of consumers.

What does Grey Power think of this idea about charging for local calls and allowing homeline phone rentals to be increased in a free market?

The national phone lines were sold under Rogernomics privatisation policies and now when the generation that watched it happen are retired and on fixed incomes National are proposing removing the protections so that Telecom is able to make higher profits, and consumers will lose-out again.

Small farmer   #78   07:39 pm Jun 10 2009

Many in country districts rely on copper wire and dial up. We rely on free local calling. Where I live there is no cell phone coverage. When Telecom was in public ownership, the present copper wire network was installed country wide to ensure that no one missed out. Before Telecom was sold, a radio network had been installed from one end of NZ to the other. Auckland was ringed by fibre optic cable. Had we not been held to ransom by the privatised Telecom, I could guarantee that I'd have a fibre optic cable running past my gate by now.

Matthew   #77   06:58 pm Jun 10 2009

Let them! They will discover people will become much more interested in Skype/cell phones and they will loose even more money.

Munts   #76   04:56 pm Jun 10 2009

Duh, we already pay for local calling minutes although the cost distribution is far from equivalent.

The majority of the country (as expressed in the last democratic election) are effectively subsidising calling minutes for all the socks and sandal wearing labour campers.

Labor, you lost. Swallow some cement.

Graham B   #75   04:40 pm Jun 10 2009

Meh, just grab a decent 'free minutes' deal on a mobile phone and there you go, all sorted :)

Stephen   #74   04:23 pm Jun 10 2009

It'd save us heaps if they went back to the option they used to have of much cheaper line rental and a small per call charge (they still have this where Telstra Clear competes with them).

In 2004 the Homeline Economy plan cost $25 a month, plus local calls at 20c each for up to two hours.

See more here:- http://www.geekzone.co.nz/juha/238

Would be much better as many people don't make hundreds of local calls. Just do the math to see.

So Joyce says "No" let Telecom keep gouging us!

Thanks for nothing National.

How to reject out of hand a major vote winner.


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