Communications Minister Amy Adams faces a major attack on her plans to intervene in broadband pricing, including opposition from a top blogger associated with the National Party.
The Coalition for Fair Internet Pricing yesterday launched the Axe the Copper Tax campaign, arguing the Government's proposal to over-rule the Commerce Commission amounts to a $600 million tax on consumers in favour of network company Chorus.
It also argues that John Key's Government has set a "dangerous" precedent of having Cabinet over-rule an independent regulator.
Earlier this year Adams released a discussion document with proposals on how much Chorus could charge broadband users of the old copper-based network.
The charges directly influence the prices all consumers pay.
While her proposals would see prices fall, the drop would be much smaller than those suggested by the commission in a draft decision last year.
Chorus claimed the commission's proposals, if implemented, could threaten its ability to complete the project to roll out the ultra fast broadband (UFB) project, for which it is receiving a massive subsidy from the Government.
The coalition includes internet and telecommunications groups, rural representatives and Maori, uniting to attack the Government's plans.
The most surprising intervention came from Kiwiblog, whose author David Farrar is a former National Party staffer who runs the polling company used by the party.
Farrar blogged yesterday that the Government should not "second guess" an independent regulator, which could have its decision challenged in court.
He also dismissed the argument that the price of copper-based broadband should not fall too far or it would undermine take-up of UFB.
"Why would you effectively gift that money to Chorus?"
If Chorus has bid too low for the UFB project, "tough bikkies" Farrar wrote.
Key said the claims of the coalition were "factually incorrect", without being specific.
Chorus chief executive Mark Ratcliffe said the figures used by the coalition were based on a draft decision which has never been implemented, therefore "describing this as a ‘new tax' is clearly misleading and incorrect".
Sue Chetwin, the chief executive of Consumer New Zealand, who is fronting the Axe the Copper Tax campaign, said the result of the Government's intervention would see no additional infrastructure built, or anyone's internet speed increase.
"There will be no benefit to any Kiwi consumer from the new $600 million tax," she said.
- © Fairfax NZ News
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