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Serious flaws revealed in Bronwyn Howell submission to Select Committee

Media Release - September 25, 2006 - InternetNZ and TUANZ have today released two papers critiquing the submission of Bronwyn Howell, a Victoria University academic, to the Finance and Expenditure Select Committee on the Telecommunications Amendment Bill.

The two critiques highlight serious flaws in Ms Howell's arguments.
Prepared by Auckland economist Dr John Small, and Dr Tommaso Valletti (Imperial College London, University of Rome), the two papers take different approaches in their critique of Ms Howell’s work.
Dr Small's paper analyses the arguments presented in Ms Howell's submission and outlines why they are flawed. He notes that studies do indicate a connection between broadband uptake and growth, and between local loop unbundling and broadband uptake.  Dr Small says in the Executive Summary of his paper that:
"Howell is clearly energetic and passionate about her subject. It may be that these admirable qualities are the root cause of the serious weaknesses in the paper.  It is otherwise difficult to understand how she came to blatantly misrepresent the work of others, make statements that would not pass muster in a first year economics course, suggest that her own exceptionally weak empirical work is evidence of anything meaningful, and appear ignorant of her logical errors."
Dr Valletti's paper focuses on the literature that Ms Howell has made use of in her submission. His view is that the literature reviewed is both selective, and does not represent a consensus view within academia. Contrary to many of the claims in Ms Howell's submission, he notes that:
Infrastructure investment has a strong and positive effect on economic growth
Regulation of the unbundled local loop has a positive impact on [broadband] diffusion
In Europe, most regulators have imposed regulation on LLU services
Comparisons of the EU and American experience must be treated with great caution

"What these papers demonstrate is that Ms Howell's submission should not be taken into account by the Select Committee in determining how it deals with the bill. It is too flawed.  We have been well aware that it is inconsistent with the vast majority of prevailing industry opinion, and what these critiques have shown is that it is also academically unsound," said Ernie Newman, Chief Executive of TUANZ.
"The Committee’s decisions, and those of the government, need to be taken on the best available evidence. The papers we are releasing today make it clear that Brownyn Howell’s research is not adequate to that task," said Keith Davidson, Executive Director of InternetNZ.
Dr Small will be presenting his paper at a media conference at 4pm today, to which media and officials have been invited.If any media not already contacted wish to attend (Wellington), please contact Jordan Carter to reserve a place, as space is strictly limited.At the media conference Ernie Newman will present on his experience in Europe recently on the position of challenger ISPs making use of LLU. Jordan Carter will present a summary of InternetNZ’s submission on the Bill, and Merv Altmans will present a summary of TUANZ’s submission.Both papers will be available on the InternetNZ and TUANZ websites after 5pm: and comment please contact:Keith DavidsonExecutive Director, or 021 377 587Ernie NewmanChief Executive, or 021 488 188

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