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Speaker: The Strange Tax on Your Internet

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  • Russell Brown,

    When I first started as a tech reporter at Computerworld back in 1997 I remember one Russell Brown gleefully proposing a cover story that consisted mainly of quotes from then Minister of Communications Maurice Williamson threatening to take action over an issue if everyone didn’t simmer down a bit.

    From memory, each quote would be accompanied by a picture of Maurice “with beard, without beard, with beard” and so on.

    Yep, it ran -- and the minister was not at all pleased about it. Small wonder, because actually listing all the times he'd said "don't make me up come up there" made him look a bit silly.

    Auckland • Since Nov 2006 • 22749 posts Report Reply

  • Kumara Republic,

    It's Call For Change all over again. The ongoing local loop debacle can only strengthen the case for a mild dose of le dirigisme.

    The southernmost capital … • Since Nov 2006 • 5416 posts Report Reply

  • bob daktari,

    as a Kiwi I expect and am usually rewarded for cost benefits of "vital" services to be passed onto offshore interests... indeed so much so that I expect some of my taxes to subsidise such

    auckland • Since Dec 2006 • 537 posts Report Reply

  • Tim Michie,

    What you can’t see is the nearly 600 words of history I’ve just deleted as being too tedious and too awful to repeat.

    Russell's Listener feature article covering this also appears to be behind the paywall.

    Auckward • Since Nov 2006 • 614 posts Report Reply

  • Kumara Republic,

    Interesting...

    DomPost: Axe copper tax action launched

    The campaign is expected to come under attack from the Government, and has already been slated by Right-wing blogger Whaleoil.

    Sources said last night that some members of the consortium had already been placed under political pressure not to publicly criticise the Government's position.

    But on the other hand...

    However, it is understood that David Farrar, the National Party's own pollster and the man behind the National-sympathetic Kiwiblog, is still a sponsor of the campaign.

    The southernmost capital … • Since Nov 2006 • 5416 posts Report Reply

  • Russell Brown,

    Paul has some more good commentary in his NBR guest editorial.

    Auckland • Since Nov 2006 • 22749 posts Report Reply

  • Russell Brown, in reply to Kumara Republic,

    The campaign is expected to come under attack from the Government, and has already been slated by Right-wing blogger Whaleoil.

    Whaleoil's ability to do his masters' bidding is amazing. Clearly Judith Collins has spoken. Here's his bizarre post on the "mad dogs at the Commerce Commission".

    Auckland • Since Nov 2006 • 22749 posts Report Reply

  • Cam Slater, in reply to Russell Brown,

    No one tells me what to blog or say Russell, frankly I am sick of smears like this especially from someone like you who should know better.

    No one questions what you do or say? Or what your motivations may or may not be? Or who pays or doesn't pay you?

    Why do you see fit to do the same towards me?

    Is it because I am "irrelevant" (to quote David Fisher)?

    New Zealand • Since Sep 2013 • 6 posts Report Reply

  • Matthew Poole,

    Other than the clowns who flogged Telecom off in the first place, it's hard to think of a politician who did more damage to NZ's telco-backed economy than Williamson. Four years for Telecom and Clear to get interconnection agreed; and $50m in wasted resources is a big number now, never mind in the mid-90s. Number portability didn't get sorted until the third term of the last government, despite being first mentioned by Williamson in 1992 - 15 years, for those keeping track! The gouging on price got worse after that article was published, too, with 1999's 0867 debacle.

    The neololberals have a lot to answer for.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • George Darroch,

    The Government’s position on this is incomprehensible if it is indeed a Government for an open and free market in which all players are equal under regulation (however heavy or light that may be).

    If that assumption is relaxed and it is instead assumed that this Government is partial to pressure, friendships, political considerations, and a heightened sense of self-confidence that leads Ministers to pick winners, then the decisions they have made become much more explicable. Under that decision-making framework, their decision to prioritise the profits of one business over those of others, and over the direct and benefits that would accrue to hundreds of thousands of businesses and millions of New Zealanders is almost logical.

    That gap between open and guided markets is increasingly obvious to our political class, as it is exhibited in a range of fields (tech, gambling, energy, agriculture, transport). It’s also becoming apparent to business.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Matthew Poole, in reply to Cam Slater,

    If you actually showed some solid principles, Cam, instead of fawning over the National Party's every utterance, it might be easier to believe that you are your own man. As a supposed civil libertarian you ought to have been flaying Key et al alive over the GCSB legislation. Did you? Did you hell!

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole,

    One commentator, I can't remember who, suggested that Adams' decision could be a breach of GATT rules about independent regulation. If accurate, it could make for an interesting legal challenge to the WTO.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • George Darroch,

    Also on the same day as the announcement, Prime Minister John Key said he would not rule out fresh legislation to overcome a [Commerce Commission] decision he said was "problematic".

    From Hamish Rutherford's article on the subject. In usual circumstances, this statement would be extraordinary. That the PM is so confident he has the ability to reshape the market to void a contractual obligation says something incredible.

    If you actually showed some solid principles, Cam, instead of fawning over the National Party’s every utterance

    Cameron's someone with principles and beliefs. It's sometimes difficult to fathom where they lie, but on a range of issues he comes out punching against National MPs, ministers, local body politicians, and affiliated individuals. Let's not make this about a person, let's discuss the sheer outrage of the position he's trying to defend.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Rich of Observationz,

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

    Is this one of those things where any benefit will be snarfed by other companies in the absurdly complex telco foodchain, and the "winning" and "losing" firms have both bought different elements in the National party?

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Matthew Poole, in reply to Rich of Observationz,

    the involvement of Farrar makes me suspect.

    Surely cancelled out by the involvement of Jordan Carter, no? I mean, a former* Labour candidate is at least equal to a mere political pollster.

    As for the rest, when prices have been regulated lower in other aspects of our telecommunications market the consumer has benefited. I’m not sure how you get from that historical fact to this somehow being of benefit only to the telcos.

    * Really, really former, given that he’s given up political involvement now that he’s CEO of Internet NZ.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Bart Janssen,

    Could you show us the working to get $600 million as the number?

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • Matthew Poole, in reply to George Darroch,

    Let’s not make this about a person

    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.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole, in reply to Bart Janssen,

    Could you show us the working to get $600 million as the number?

    Yes, I'm curious too. I probably did it wrong, but I got $600m/12 months/$12 extra per month=~4.17m, which I would take to mean that many connections paying that much more per month. And there aren't 4.17m copper internet connections in this country, or even close. If I replace $12 with $20 I get 2.5m, which I would say is probably fairly close to the truth once business DSL connections are counted, but you can't use $20 because $8 of that will be paid even under the ComCom determination.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Don Christie,

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

    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.

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • Phil Lyth, in reply to Bart Janssen,

    Could you show us the working to get $600 million as the number?

    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

    Wellington • Since Apr 2009 • 458 posts Report Reply

  • Juha Saarinen,

    May be of interest:

    Chorus Statement – Coalition for fair internet pricing

    The estimates used today are based on a draft price issued at the start of a long regulatory process. That price has never been implemented and describing this as a “new tax” is clearly misleading and incorrect.

    The issue at hand is deciding the extent to which wholesale prices may decline, at the same time as ensuring that consumers continue to benefit from investment in high quality broadband infrastructure and investors get a fair return. That process is ongoing.

    New Zealand is already benefitting from consistently better value for broadband services, as well as faster connections than ever before.

    On top of this, the Ultra-fast Broadband initiative is set to deliver one of the highest quality national broadband infrastructures in the world at the same time as further lowering prices for consumers.

    “New Zealand is about 20% through a once-in-many-generation upgrade to our national broadband infrastructure, which will deliver significant social and economic benefits,” said Mark Ratcliffe, Chorus CEO.

    “At the same time, the entry level fibre broadband wholesale price is significantly lower than the current copper broadband price, meaning that this initiative will also deliver savings for consumers.

    “Given the many benefits of this initiative, it is important that the economics of the project remain in place for the Government’s partners, that investment is supported throughout the duration of the build and the transition to fibre is supported so consumers get savings and wider benefits.”

    Since Nov 2006 • 529 posts Report Reply

  • George Darroch,

    For me the most important consideration is the difficult-to-quantify benefits to other parts of the economy which are foregone as higher costs introduce friction in the movement of information. These benefits go much wider than the tech industry, and their loss is hugely disappointing. But because they largely accrue to future business and personal activity, they don’t have the benefit of incumbency.

    A similar tradeoff is seen in the case of Rio Tinto, where a large employer with concentrated interests was able to see off the economic activity and job-creation that would have occurred with cheaper renewable electricity to every other business in the country.

    Documents released this afternoon show Treasury advised last July that a bail out should be rejected because it would “would result in a significant transfer of value from New Zealanders to [owners] PA [Pacific Aluminium] and Rio Tinto shareholders”.

    The amount of the value transfer has been withheld. Also redacted from the papers are the company’s original demands

    Andrea Vance, Treasury cautions against Tiwai sweetener

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • George Darroch,

    “Given the many benefits of this initiative, it is important that the economics of the project remain in place for the Government’s partners, that investment is supported throughout the duration of the build and the transition to fibre is supported so consumers get savings and wider benefits.”

    The entire Chorus statement can be summarised as follows: "Broadband is good. We're unwilling to take a loss on the commercial agreement we negotiated."

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Stephen Judd,

    Doesn't look like the investing public thinks this will make much difference: CNU is basically unmoved so far today.

    Disclosure: I hold a small amount of CNU which I bought earlier this year because I suspected there had been unnecessary panic and they would continue to pay reasonable dividends.

    Wellington • Since Nov 2006 • 3122 posts Report Reply

  • Matthew Poole, in reply to George Darroch,

    Treasury cautions against Tiwai sweetener

    And were ignored. Well I'll be. National ignored Treasury. Why do they even bother keeping the department around? Given how often Treasury's really significant advice has been ignored by the current regime, surely it's not just for the neololberal smokescreen?

    Auckland • Since Mar 2007 • 4097 posts Report Reply

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