Dunedin South MP Clare Curran has been accused of "vitriolic scaremongering" in her continuing attacks on Telecom in speeches in Parliament and in press releases.
Craigs Investment Partners broker Chris Timms said yesterday Ms Curran's criticism seemed to be a "classic case" of electioneering by attacking Telecom and accusing it of monopolistic behaviour, even after the planned structural separation to form Telecom and Chorus into two separate companies.
Ms Curran, Labour's IT and communications spokeswoman, said in a speech in Parliament that the Telecommunications (TSO, Broadband and other matters) Bill would create an uncompetitive market that would entrench Telecom and Chorus as the dominant players at the infrastructure, wholesale and retail levels in New Zealand's fibre market.
"Telecom's history of monopolistic behaviour will not change when it is broken up under the structural separation, especially now that the minister [Communications Minister Steven Joyce] has guaranteed Telecom that any costs incurred by the Commerce Commission regulation will be worn by the taxpayer. An indemnity to Telecom. This is truly selling the law."
Ms Curran questioned what incentive Telecom would have to act competitively and what reason Mr Joyce would have to regulate when the Crown would wear all the cost.
"Once again the Minister is proposing law that just will not work; law that will increase the cost to the consumer while creating an anti-competitive market," she said.
Mr Timms said the speech was one of those situations where MPs could speak in Parliament under privilege but companies were bound by continuous disclosure rules with their reports governed by the relevant regulation.
Ms Curran and other MPs needed to be aware that when they made comments about listed companies, there were implications for those companies and their investors, Mr Timms said.
"I don't necessarily agree with everything Telecom does but we need to remember that this is election year. There is nothing to suggest the two units from Telecom will not operate in any way other than arm's length," he said.
People who did not understand that the structural separation meant the two companies - Telecom and Chorus - had to operate at arm's length would accept Ms Curran's word because she was an MP.
However, there was nothing in the structural separation documents to suggest the two companies would be anything but separate identities, he said.
Telecom still had a large impact on the NZX-50 even though it was the second largest company.
Telecom still had the largest number of overseas investors on its share registry because of the high number of shares traded daily, Mr Timms said.
ACC held 4% of the company and the New Zealand Superannuation Fund held about 2.5%.
