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Fibre Watch: Telecom’s wild week

21 Apr 2011

What a rollercoaster week it’s been for Telecom.

The company hardly had time to catch its breath after submitting its final proposal for the Ultrafast Broadband initiative before being pinged by the High Court with a record fine for a spot of uncompetitive behaviour a few years back.

The court ruling had TelstraClear (amongst others) jumping up and down claiming there would be more of the same anti-competiveness if Telecom, or another fibre provider, was gifted the controversial UFB regulatory holiday proposed by the government.

Yesterday brought news that the government had finalised its previously announced $285 million deal with Telecom and Vodafone to build the Rural Broadband Initiative.

But there was hardly time for handshakes all round before Labour began calling for the deal to be halted along with any UFB contract decisions.

Labour was outraged that Telecom exec turned government broadband strategist Bruce Parkes had been singled out in the High Court ruling as the architect in the company’s anti-competitive practices.

Parkes, who clearly hasn’t had time to update his LinkedIn profile since joining MED early last year, is a colourful character who epitomised what Telecom stood for in the bad old days when Theresa Gattung ran the show.

Long suffering telco journalist Chris Barton once said of Gattung and Parkes: "She was loud and gauche and he was goofy and affable, but both were ruthless in their battle against regulation.”

As well as being at the heart of the "data tails” case that was the subject of this week’s court ruling, Parkes was also a key figure in the 0867 saga.

The Commerce Commission alleged Telecom acted anti-competitively in its use of the 0867 prefix to control competitor dial-up internet access back around the turn of the century. But after a long legal battle the Supreme Court ruled in Telecom’s favour last year.

Back in the late 90s Telecom codenamed the 0867 initiative "Project Morecambe” – a title Barton speculated came about because of Parkes’ "uncanny resemblance” to the late British comedian Eric Morecambe.

But I digress. It seems unlikely Labour’s call for an independent review of the UFB/RBI processes will get any traction with the Government.

Communications Minister Steven Joyce dismissed concerns about Parkes’ background yesterday, saying he took advice from a number of sources before making policy decisions.

Questions about Parkes’ background with Telecom were first raised before he joined the MED early last year.

Back then an insider said this type of job-hopping was just a fact of life in a small country.

Another well-known industry figure, Ralph Chivers, jumped from Crown Fibre Holdings back to Telecom last year.

This week’s shenanigans have provided something of a distraction as we endure the excruciatingly long wait for the majority of the $1.35 billion UFB contracts to be awarded. There are signs that could finally happen in the next few weeks.

Expect more howls of outrage at that point if, God forbid, Telecom is a winner.