He who pays the piper calls the tune

There's been a bit of a row over a review of the New Zealand Telecommunications Act.
Written by Darren Greenwood, NZ Correspondent on

The New Zealand government has proposed that the wholesale price of copper be kept higher than originally suggested, to help push the adoption of fibre-based Ultra-Fast Broadband (UFB).

Paul Brislen, CEO of the Telecommunications Users Association of New Zealand, breathlessly says that the government plans to give itself unprecedented regulatory power as it sidelines the Telecommunications Commissioner.

Smaller telcos are unhappy, as the Telecom offshoot Chorus will benefit at their expense.

Consumers will lose out, and, indeed, the Consumer Association said current proposals will effectively mean consumers subsidising the UFB rollout.

But can we really be so surprised that having forked over so much cash in its UFB flagship that the government might want a strong say in getting what it wants?

I am not going to suggest unholy corporatist deals as our Labour opposition might imply, but it is surely a bit naive to expect the government to chuck NZ$1.5 billion at a major policy initiative without it wanting to pull the strings in the background — I mean, create the right regulatory framework to ensure it is a policy success.

We should always be aware of the following sayings, as they are so truthful and valid to life: "He who pays the piper calls the tune", "always follow the money", and "there is no such thing as a free lunch".

Did our IT sector and associated commentators and lobbyists truly expect a blank cheque for UFB? They asked for political intervention with UFB, they asked the government to step in and fund it, so they can hardly complain if the government then chooses to step in a little more than they would like.

Another saying is: "A government big enough to give you everything you want is a government big enough to take away everything that you have."

So if we hear anyone accuse the government of being corporatist, of IT Minister Amy Adams being "Muldoonist" (Muldoon being a former New Zealand prime minister who was noted for his authoritarian tendencies), the IT industry might need to take stock and consider how it helped put politicians in such positions of power.

I don't doubt the arguments over competition, but, as I said last year, there is no way New Zealand can afford an NZ$3.5 billion "white elephant".

Of course, a generic, government-funded UFB campaign would be somewhat less controversial, but we now see Telecom adding to the smaller campaigns of others.

And even though take-up is low, at least the UFB rollout is progressing ahead of schedule.

Still, it's not too late for the IT sector to successfully campaign for a U-turn on copper pricing. A final decision is months away, and we are still only at the proposals stage.

Success can be seen in the effective lobbying from anglers, who forced a sea change last week, as it were, on government plans to further restrict the amount of snapper that individuals can fish for.

While the government is keen to see a successful rollout of its UFB flagship, it knows the dangers of upsetting too many people, as its snapper U-turn showed.

Thus, it will be up to the IT sector to convince government that upsetting the apple cart in terms of competition and falling prices, with its wider economic implications, will actually prove to be unpopular, and would cost the government support.

It is all about votes in the end. As I said earlier, he — which would now be the taxpayer — who pays the piper calls the tune.


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