Crown Fibre moves to next phase

Assessment of bids is complete

Crown Fibre Holdings has finished assessing bids from Telecom, members of the Regional Fibre Group and Canadian company Axia NetMedia. The firms are bidding to partner with the Government in its ultrafast broadband initiative. A spokesman says it may be two or three months before the Crown-owned company is able to make a further announcement. A trilateral process is now under way between the bidders, Crown Fibre and the Economic Development Ministry (MED), which is fielding questions on regulatory issues. On the day that Telecom announced it was considering structural separation, Communications Minister Steven Joyce told The Dominion Post he would consider any request from Crown Fibre for a broader, multilateral discussion between the parties, but he was happy with the existing arrangement. "Different scenarios with different partners have different potential regulatory impacts, so I think just having an all-in discussion wouldn't necessarily achieve anything, although obviously if [Crown Fibre] came to us and said they would like something, we would look at it," he said. Some independent industry sources say there is a certain inevitability about the structural separation of Telecom and a deal between it and the Government. But the Regional Fibre Group is tipped to launch a new offensive to try to regain momentum for its bid. Group chief executive Vaughan Baker says he has no concerns about the roles of, and demarcation between, Crown Fibre and MED. "We continue to put our best foot forward and trust Crown Fibre in their process." However, Telecommunications Users Association chief executive Ernie Newman expressed unease that the selection process might be held up by a debate around the separation of Telecom. He accused the company of "playing a game of brinksmanship" by maintaining that network arm Chorus was interested in building a national network and would not — for example — participate if it missed out on the Auckland network build. "We certainly don't want to see a situation where the process is derailed or slowed while everybody waits for Telecom to catch up." Telecom chief executive Paul Reynolds told analysts last month that Telecom could be split into two by August next year. Spokesman Mark Watts would not comment on speculation it is working on a formula that would allow Chorus to start work on the fibre roll-out before then, if it was chosen as the Government's partner. Joyce envisaged the scheme would get under way by the end of the year. The initial focus would be on connecting schools. Under Telecom's proposal, a separated Chorus would manage both Telecom's existing copper and fibre network and the fibre that would be laid as a result of the ultrafast broadband initiative. The Government would acquire either a shareholding or an alternative financial instrument that would entitle it to a return from the $1.35 billion it would invest in the new infrastructure. Joyce said the MED was keeping him informed on regulatory matters, and Crown Fibre "largely via MED, are keeping me informed on their progress and process, but certainly not in where they are at in their thinking". The Government has made it clear that ministers will have the final say. Crown Fibre chairman Simon Allen said in February that it intended to complete its assessment by the end of May and would then negotiate "final binding offers for recommendation to ministers during the third quarter". The spokesman says Crown Fibre is still running to its timetable. The MED is taking a lead role on regulatory issues, working closely with Crown Fibre, the spokesperson says. "If any party wishes to raise regulatory issues, they are welcome to do this through the MED. "Crown Fibre understands a number of parties have done so; these matters have been taken into account in the assessment process. Crown Fibre has the mandate to collect further information from interested parties and will do so at its discretion, " he says. Vector chief executive Simon Mackenzie has said the Government would need to consider imposing a levy on fibre connections sold by Telecom, if Telecom was not involved in the initiative.

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Tags Axia NetMediatelecomCrown Fibre HoldingsSteven Joyceregional fibre group

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