Cunliffe rejects Telecom separation plan

DC may be facing the pressure in health, but I am very pleased to see he is still makin good calls in the Comms/IT area.

He has not accepted Telecom’s proposed separation plan. The proposed plan was a lot better than the draft plan, but still had aspects which would have left incentives in place which would increase the chance of failure.

InternetNZ, whose submission was to not accept the plan, is relieved and happy:

InternetNZ Executive Director Keith Davidson says it is very good to see Government has recognised the issues, and is committed to ensuring a robust operational separation plan that correctly incents the relevant divisions within Telecom. “Ideally the wholesale manager should have little or no group incentive and InternetNZ is pleased to see that a limit will be put in place.”

The changes needed are not huge, but of great significance potentially.  Telecom today is a very different beast to a few years ago and are generally working well towards a structure where there will be greater competition and investment.  The Minister deserves credit for not rushing the final plan by sacrificing quality for speed.