Communications Minister Steven Joyce says the Labour Party's claim Telecom will receive taxpayer-funded protection if it runs foul of the Commerce Commision are untrue and misleading.
Legislation creating the framework for ultra-fast broadband is making its way through Parliament.
Telecom won the right to build the most of New Zealand's fibre optic network, with the rest being carried out by three smaller companies.
Originally, their wholesale prices would not have been subject to Commerce Commission regulation, but under widespread pressure the Government backed down.
In return, Labour says the taxpayer will now cover any penalty the commission might impose if wholesale prices are too high.
Mr Joyce says Telecom will not be compensated financially, but could defer repayments to the Crown if the commission forces its prices down.
