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Labour questions UFB prospects after Pacific Fibre closure

Thu 2 Aug 2012
FYI, this story is more than a year old

Fresh from failures to create a Fibre Optic connection to the rest of the world, Labour has raised concerns over the viability of future plans.

“The Government promised New Zealanders a step change to the economy through fast broadband in their homes, schools and businesses and a super information highway,” says Clare Curran, Labour’s Communications and IT spokesperson.

“But its $1.5 billion flagship programme was always dependent on a second high-speed fibre-optic cable connecting New Zealand to Australia and California and providing much-needed competition to bring fibre prices down.

“By expecting the market to deliver a second cable, the Government has gambled and lost given today’s announcement.”

Under the guidance of high profile Kiwis Sam Morgan, Rod Drury and Sir Stephen Tindal, the 12,950km fibre cable between Auckland, Sydney and Los Angeles failed to materialise due to a lack of fundings.

Despite Pacific Fibre struggling to meet the proposed NZ$490m fund, Curran says the company tried hard to get the project to work.

“Its failure is a blow to local industry, it’s a blow to the Government’s UFB project and it’s ultimately a blow to the Kiwi consumer and business community wanting to take advantage of new technology,” says Curran.

“The Government could have been playing closer attention and should have factored into its business model the need for greater international interconnectivity.

“The question is, what will they do now to ensure their UFB programme doesn’t continue to flounder?

“New Zealand’s only existing international cable was not allowing the pricing needed to act as an incentive to our market to invest in retail products to stimulate high uptake of new broadband as it becomes available.

“To date the only real recipient from the UFB has been a wealth transfer to Telecom and Chorus shareholders. New Zealanders won’t be seeing any benefits anytime soon.”

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