Radio New Zealand - Te Reo Irirangi o Aotearoa

Proposed US levy could raise internet prices

Updated at 7:27 pm on 16 July 2012

An American plan to force undersea cable operators to pay a levy may prompt price rises for internet users in New Zealand.

The Federal Communications Commission is proposing to eliminate an exemption for operators of international submarine cables landing in the United States.

It means operators like the Southern Cross Cable Network, which connects Australia and New Zealand to the US, would pay a levy of almost 16% of their quarterly revenue to subsidise America's broadband network.

Telecommunications Users Association chief executive Paul Brislen says Southern Cross would eventually pass on the cost, which could delay the uptake of ultra-fast broadband.

"They'll have to wear the costs for the next two or three years until those contracts roll over to the point where they can then, presumably, pass the cost on to the telcos and ISPs of New Zealand. Who as we know will pass it on to us."

He says it is vital the New Zealand Government stand up against the proposal, which he describes as essentially a trade tariff.

Mr Brislen told Checkpoint introducing levies on undersea cables is a "slippery slope" and he wants the Government to send a clear signal it should not be allowed.

Listen to Paul Brislen on Checkpoint

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