Speaker by Various Artists

Read Post

Speaker: The Strange Tax on Your Internet

59 Responses

First ←Older Page 1 2 3 Newer→ Last

  • Don Christie,

    To be fair, Treasury is a place where young grads go for their first job. So they play an important role in creating a ladder for bright young things to get into the workforce, or politics.

    But it does main that their advice should always be taken with a pitch of salt and some real life meat thrown in as well.

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • nzlemming, in reply to Rich of Observationz,

    Normally I'd support this, but the involvement of Farrar makes me suspect.

    I don't often give Farrar much credit, but I will say that he's been consistently in favour of a realistic Internet/telecommunications marketplace since the 90's. His presence on this consortium lends credibility as a non-tribal matter, rather than taking away.

    Waikanae • Since Nov 2006 • 2930 posts Report Reply

  • nzlemming, in reply to Matthew Poole,

    You mean not do what Slater did and turn the entire piece into attacks on Hooten (for whom I have little time, but that’s by the by), and then on Jordan Carter’s integrity? Yeah, nah.

    Yeah, but aren't we better than that? Just ignore him - he hates being ignored ;-)

    Waikanae • Since Nov 2006 • 2930 posts Report Reply

  • Matthew Poole, in reply to nzlemming,

    His presence on this consortium lends credibility as a non-tribal matter, rather than taking away.

    It's a good counter to the blubbery one's assertion that Jordan has turned INZ into a Labour Party policy outfit, which is then the only reason that INZ would be getting in behind such a campaign.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Kumara Republic, in reply to Don Christie,

    David Farrar has lots of interests, some of which are not political :-) He has been a very effective member and supporter of InternetNZ for many many years and his position on topics relating to the internet have been very consistent, no matter who is in power or what various party policies of the day happen to be.

    And in fairness, Farrar did actually support the unbundling of the local loop, much to the disgust of the commenters on his blog. Whaleoil, on the other hand, sided with Big Finance and overplayed the scratchy and broken “property rights” record.

    The southernmost capital … • Since Nov 2006 • 5418 posts Report Reply

  • Andre Alessi,

    I'm fully in favour of the entire project. A government minister ignoring the Commerce Commission on a decision with such wide-ranging implications is beyond worrying.

    It's also worth noting that Chorus (and its previous incarnation of Telecom Wholesale) has self-interest built into its entire culture. Regulation is often only part of the solution, although an important part. In addition, outcomes need to be monitored closely to ensure Chorus is not finding other ways to claw back money from end customers and other providers. (An example: changing the back-end ordering process for broadband connections to require additional work, and thus additional costs, for customers requesting new connections.)

    Devonport, New Zealand • Since Nov 2006 • 864 posts Report Reply

  • Geoff Lealand,

    Yikes! Mr Slater pokes his head out his burrow. But I guess he is consistent in failing to question any actions by the National administration.

    Screen & Media Studies, U… • Since Oct 2007 • 2537 posts Report Reply

  • Matthew Poole, in reply to Kumara Republic,

    Farrar did actually support the unbundling of the local loop, much to the disgust of the commenters on his blog.

    DPF has more technical nous than any two of his blog's commenters combined. He's also not utterly, implacably opposed to regulation when there's an obvious market failure.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Bart Janssen, in reply to Phil Lyth,

    From a report prepared by economists Covec. You can read the Coalition’s media release here and it includes a link to Covec’s 35 page report

    Thanks Phil. The media release didn't help at all but a five minute skim of the 35 page report told me what I wanted.

    So first point I think the government bailing out Chorus like this is dishonest and disgusting at no level do I believe they should any way support a privately owned company in this way. I believe there is no viable argument for this governmentally enforced price fixing. And Chorus's response is the typical venal business speak for "we have the right to rip you off for as much as we can get away with".

    But the representation of the price fixing as a $600 million tax is deceptive as well. It is $588 m over 7 years - about $90 million per year. I personally hate it when organisations (and the government are the worst culprits) sum per annum numbers to make a nice big impressive number for the media. I do get that you are summing over the expected duration of the UFB upgrade but it would have been trivial to make that clear.

    Second phrasing it as a tax is deceptive as well since it then appears as if all New Zealanders are paying when in fact it is only those who pay for the internet who are paying. It makes good publicity but is not honest.

    Please note I wholely support your opposition to the government supporting the profits of Chorus for no good reason but I don't like the way you've played with your numbers and language.

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • PaulBrislen, in reply to Bart Janssen,

    Hi Bart,

    We wanted one number that reflected what the true cost is. We looked at $95m a year, we looked at a per user number and so on. In the end we rounded it all up and looked at Covec's most conservative estimate across the period in question.

    As for the phrasing around it being a tax - I don't have a problem with using that term. A tax is "a cost the government imposes on you to pay to another person" and that's what's going on here. Sure, it's not using the IRD but that doesn't mean it's not a govt imposed cost transferring money from customers to Chorus.

    I hear what you're saying though and comms around such matters is always a matter of fine judgements...

    Auckland • Since Sep 2013 • 1 posts Report Reply

  • Bart Janssen, in reply to PaulBrislen,

    I hear what you’re saying though and comms around such matters is always a matter of fine judgements…

    Yeah no worries. It’s a personal issue I have with those kinds of numbers from years of having friends comment that “hey you’ll be getting lots of funding from the hundreds of millions that the govt are giving to science” and having to explain that no in fact it’s really spread over decades and is in fact a cut in funding …

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • Mark Graham, in reply to Russell Brown,

    How dare you make Maurice Williamson look silly. He's perfectly capable of that all by himself.

    Auckland • Since Nov 2006 • 215 posts Report Reply

  • Sacha, in reply to Bart Janssen,

    a fiscal drag

    Ak • Since May 2008 • 19686 posts Report Reply

  • Graham Dunster, in reply to Matthew Poole,

    Funny business, Treasury advice. They have persuaded the Government to forgo free offshore money for the film and tv industry by keeping the current incentive at 15% rather than being increased to the 25% currently offered by the UK, South Africa et al. The thinking, as far as I can ascertain, is that giving back some of the money spent on a production is considered a subsidy, despite it coming from money that otherwise does not enter the country. (Bring in $100M and make a tv series and we'll refund you $25M, leaving $75M here. Don't bring in and spend anything and we won't give you anything., but there won't be anything spent here at all) In the meantime the local industry is disappearing and we soon won't be able to service anything worthwhile from o/s. Soon being the end of this year at the way it's happening. "Spartacus" wrapped in October last year, last show in Auckland. "Hobbit" has now wrapped in Wellington.
    The sad thing is that Treasury is using out of date statistics, they still think that there is production in Auckland and Wellington when there is nothing. Nothing at all.

    Auckland • Since Nov 2009 • 184 posts Report Reply

  • Sacha, in reply to Graham Dunster,

    if you can't water it, their Minister is not interested

    Ak • Since May 2008 • 19686 posts Report Reply

  • Paul Campbell,

    It seems to me that we wouldn't be in this situation if we had some real competition in the market place between copper and glass - in short if Chorus wanted the business they should have been forced to split off competing business units for the two networks (and Telecom makes 3)

    Chorus is just the most impossible business to deal with, they are building out the fibre completely around my neighbourhood at the moment - they'll get to me some time in 2016 apparently - they've closed all their local offices, I can't go down town, bang on the door and make my case - if I call their national number and ask to talk to the person who's in charge of deciding who gets fibre in Dunedin they refuse to put me through, in fact they wont put me through to anyone, just tell me to read their web page - we're giving them a billion dollars of our taxes you'd think they'd be the least bit grateful.

    Dunedin • Since Nov 2006 • 2606 posts Report Reply

  • anth, in reply to Bart Janssen,

    phrasing it as a tax is deceptive as well since it then appears as if all New Zealanders are paying when in fact it is only those who pay for the internet who are paying

    The petrol tax is only paid by those who pay for petrol.

    Since Nov 2006 • 77 posts Report Reply

  • Sacha, in reply to anth,

    and all of us who use goods and services where petrol is an input cost - oh, just like internet connectivity is these days.

    Ak • Since May 2008 • 19686 posts Report Reply

  • Bart Janssen,

    And a petrol tax go into the govt consolidated fund. This isn't a tax, it's govt sponsored price fixing for the benefit of a business and not the govt.

    That makes it worse in my mind but not a tax.

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • John Small, in reply to Bart Janssen,

    The calculations are at the back of the Covec report, which is here: http://www.covec.co.nz/pdf/Covec_Telco_Act_Review_Economic_Issues.pdf

    New Zealand • Since Sep 2013 • 10 posts Report Reply

  • Matthew Poole, in reply to Paul Campbell,

    they are building out the fibre completely around my neighbourhood at the moment – they’ll get to me some time in 2016 apparently

    I live in Ellerslie, which is firmly in the middle of the old Auckland City Council boundaries, moderately affluent, and generally ought to be well-served by fibre. There's even a school three doors up the road (with fibre already delivered), and another one around the corner (also with fibre already delivered). But my address isn't on the UFB delivery schedule until 2015. A friend who lives on the Henderson/Ranui border, in deepest, darkest Westie-land, looks to be getting UFB in his street by the end of next month. His nearest school is hundreds of metres in a straight line, never mind measuring by road..

    There's just been no sense to the roll-out. When they were laying in the fibre to the schools, it would have made sense to lay in the residential fibre at the same time; only have to open up the trench once, meaning less technician time and less disruption. But that would have been too easy. Instead we're going to (if we're still there) get UFB in the neighbourhood there will be another month of the pavement and street being dug up while the next series of ducts are laid in, having already been through it once.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole, in reply to Sacha,

    if you can’t water it, their Minister is not interested

    That's because their minister knows first-hand how important it is to be watered ;)

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole, in reply to Bart Janssen,

    And a petrol tax go into the govt consolidated fund.

    Not for years. Road taxes were hypothecated by Labour somewhere around 2002.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Andre Alessi, in reply to Matthew Poole,

    There's just been no sense to the roll-out

    Absolutely. It's been a shambles. In the course of my day job, I've looked at the Chorus records of about 300 Auckland addresses in the last month to see which services (ADSL, VDSL, UFB) are available, and probably three quarters don't have the option to even order UFB yet. And don't get me started on the added complexity with CFH entities that aren't Chorus in Tauranga and Hamilton.

    Part of this has been caused by retailers, who were slow to offer fibre plans. Many of the smaller retailers don't buy services directly from Chorus, they buy from the wholesale departments of the big guys: Telecom, Vodafone, Call Plus, etc. These small providers couldn't offer anything UFB related until their wholesale provider developed and rolled out a UFB product for them to sell. Additionally, late last year and for the early part of this year, many ISPs had a big push on new ADSL plans with increased data caps , 24 month terms and large early termination charges, meaning that it just won't be economic for many people to make the switch to UFB until next year or the year after, even if this means they won't be included in the initial UFB rollout in each area.

    This is a definite problem, because Chorus' initial business plan included an expectation that most customers would sign up with a UFB product at the time Chorus rolled fibre out to their street. That's been one of the major causes of the low uptake Chorus is now using to justify increased UBA pricing.

    Then again, Chorus is also gaming the numbers themselves here. Earlier this year their costings for the UFB rollout skyrocketed by nearly $300 million IIRC (after they'd already won most of the contracts based on their lower initial costing, naturally.). Their justification for this-that "compliance costs" involved with digging up roads and footpaths and the requisite council consents-is absolute bullshit. There is no difference in the compliance cost of digging up a road to lay fibre than there is to lay copper, and they do the latter every day, so there's no conceivable way they could underestimate how much the process would cost to this degree.

    Devonport, New Zealand • Since Nov 2006 • 864 posts Report Reply

  • Paul Campbell,

    I think that if Chorus made a such low bid to get the contract so they could form their monopoly there's no call for them crying foul when it turns out they bid too little it was their choice.

    Here in Dunedin they own the old gas mains, they got them for $1 - there's no reason to dig up most of the city, just the last 10m

    Dunedin • Since Nov 2006 • 2606 posts Report Reply

First ←Older Page 1 2 3 Newer→ Last

Post your response…

Please sign in using your Public Address credentials…

Login

You may also create an account or retrieve your password.