Telecommunications (New Regulatory Framework) Amendment Bill

on behalf of the Minister for Communications: I move, That the Telecommunications (New Regulatory Framework) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. This bill amends the Telecommunications Act 2001 to modernise the Act and establish a stable and predictable framework for fibre access services in New Zealand. It removes unnecessary copper fixed-line access service regulation and streamlines regulatory processes to enable a rapid response to any competition problems, particularly in the mobile communications market. It also provides more regulatory oversight of retail service quality and wider consumer protections.

The telecommunications market is changing, with new technologies, shifting consumer behaviour, and evolving business models. Alongside this, consumers have vastly improved connectivity through the Government’s $2 billion roll-out of world-leading communications infrastructure. The Telecommunications (New Regulatory Framework) Amendment Bill will ensure that regulatory settings continue to be fit for purpose and support the evolution of this fast-moving sector. Connectivity is increasingly important for every aspect of New Zealanders’ social, economic, and working lives. Access to faster communications services and infrastructure is a great enabler of economic growth and contributes to increasing the depth and vibrancy of New Zealand’s digital economy. To enable this continued growth and wider demand for connectivity, our regulatory arrangements need to be modernised.

The bill will implement a number of new regulatory arrangements and key changes—firstly, the new utility regulation framework. The new regime will ensure that ultra-fast broadband (UFB) providers cannot make excess profits at the expense of consumers while being able to expect reasonable rates of return and incentives for ongoing investment. Under this new fixed-line regulatory framework, Chorus will be subject to a revenue cap, and the company will be required to provide certain anchor services to its wholesale customers. The revenue cap gives Chorus flexibility in how it sets prices for most of its products, but it also ensures that Chorus does not earn excessive returns on its fibre assets.

One safeguard built into the system is that Chorus will be required to supply price-regulated anchor products. These will initially be an entry-level broadband product—100 megabits per second upload, and 20 megabits per second download—and a voice-only product. These products should ensure that there is price stability for consumers and retail service providers, and they should also anchor the price of other products that Chorus offers. Chorus and local fibre companies will also be required to disclose information publicly to enable scrutiny of their performance and profitability. Local fibre companies will face competition from copper and cable networks and are not subject to revenue caps, but can be regulated if problems arise.

Consistent with Part 4 of the Commerce Act, the bill provides for the Commerce Commission to establish new input methodologies and regulatory arrangements to institute the new framework. A clear value will be set for regulated assets at the outset, with a predictable process for updating this over time. There will also be a clear process for approval in advance of new investments, similar to that which applies to the electricity grid operator Transpower.

Secondly, the deregulation of copper services—in the areas where fibre services are available, the copper network operated by Chorus will be deregulated, subject to some protection for consumers. The telecommunications service obligation that provides for price-capped landline and dial-up services will be removed. Consumers will have a wide range of choices in these areas, including the option of moving to fibre networks with better services and similar prices.

The withdrawal of the copper network by Chorus in given areas will be regulated by a copper withdrawal code that sets out minimum conditions that must be met before a copper line can be withdrawn. In areas where UFB or other fibre is not available, the telecommunications service obligation will be retained, and Chorus will be required to continue supplying copper services at prices capped at 2019 levels, with inflation adjustments over time. This will ensure consumers continue to have access to basic telecommunications services at competitive prices, even when alternative networks are not available.

Thirdly, the streamlining of the process for regulation of services—the bill will encourage further competition in telecommunications services through streamlining the process for commission investigations into regulating telecommunications services in schedule 3 of the Act. These changes allow for more timely intervention by the commission when issues are identified, and they further encourage commercial settlements as an alternative to regulation.

Fourthly, greater consumer protections—the bill improves the Act by enhancing consumer protection. It has become increasingly clear that outcomes for telecommunications consumers are not satisfactory. For example, the results of the New Zealand National Consumer Survey 2016 showed that nearly a third of all consumers reported having a problem with either their fixed broadband or their mobile services, and 11 percent had problems with both.

To lift consumer service quality across the sector and improve the responsiveness to consumer needs, the bill augments consumer safeguards and provides for more regulatory oversight of retail quality standards and dispute resolution processes. These arrangements require the Commerce Commission to collect information and report on the quality of retail service delivery in a way that is accessible to consumers, require regulatory codes to be established to improve retail service quality if industry self-regulation is inadequate, and require the periodic review of the industry-led dispute resolution scheme by the commission.

Fifthly, in final minor changes enabled by the bill, the bill repeals some unnecessary and expired provisions.

To sum up, the new regulatory framework enabled by this bill will modernise the Telecommunications Act so that it is fit for purpose for New Zealand’s new fibre-focused telecommunications environment. It will put in place a balance of incentives so that ongoing investment by network providers will continue to be encouraged while consumers will be protected. It will create a more predictable telecommunications environment, target regulation more effectively, and support consumers. I commend this bill to the House.

For anyone who is still awake after that speech, it is time to hear a little bit of positivity. What we heard there was the difference between MPs on this side and MPs on that side. What you have got here is relentless positivity, and what you have got there is—well, I am sorry, Mr Macindoe, but even you have got to admit that that speech was downright boring and tired, was it not? Was it not? Where is the positivity? Where is the enthusiasm? Mate, you are about to go home and campaign. I mean, we are out of our skins—ready to go.

Mr Assistant Speaker Tisch, what I would like to say is that it has been a pleasure being a member while you have been in the Chair. I wish you the very best of luck in your future endeavours, and I know that your wife is probably looking forward to you being at home a little bit more. But just best of luck, and thank you very much.

Now, back to the relentless positivity. Goodness me, when you are doing something like this, which is so important—it really is. I should say that we support this bill. I should say that this is the Telecommunications (New Regulatory Framework) Amendment Bill, and there is one thing that Mr Macindoe said that I completely agree with, which is that this is a fast-moving sector. It really is. It is a game-changer. In fact, it changes not only education and business and connectivity; it changes the world and how we go to the world, where businesses can locate. But this is not a fast-moving Government, and that is part of the problem.

This bill is the outcome of a 2-year consultation process, from 2015 to this year. This is its first reading, so, of course, the bill cannot pass until the 52nd Parliament—until the next Parliament—when I suppose we will be looking after the commerce portfolios and we will drive this through with vigour and positivity—

💬 Hon Louise Upston: Good luck with that.

—in a way that means a lot for provincial and rural New Zealand. I know that Louise Upston knows what I am talking about, because she is from the provinces, and she must be getting a whole lot of constituents who ask: “When is it going to arrive on my doorstep? When is it going to happen?”—

💬 Peeni Henare: “Let’s do this.”

—“Let’s do this.” Absolutely—let’s do this. So it does beg the question of what this Government has actually achieved in this Parliament for progressing the fibre agenda. I must admit that the cynic in me—the small cynic in me—says that we are here, giving a first reading speech on this bill, so that the Government can actually claim that legislation is in the House to reform the sector. Well, what I would like to say is that a first reading speech on the second to last day of the parliamentary term is not progress.

It is not progress, and New Zealanders expected more. The reason I say that is that 3 years ago, before the 2014 election, there was a lot of hoopla made by this Government about the next phase of ultra-fast broadband (UFB). It called it UFB2 and the Rural Broadband Initiative (RBI), or RBI2. Three years later, it has only just got UFB2, or ultra-fast broadband 2, under way, and we still do not have an announcement on rural broadband. Some of my communities—

💬 Meka Whaitiri: Oh, our communities.

—our communities; Meka’s and my communities—are rural. These are good, hard-working farmers. They need to have rural broadband. It is part of what drives their business, and they have not got it.

I have been up at Matawai three times talking about this. This is a rural community that does well. These people are the backbone of the country, and they are missing out. They are missing out. I have been working with Telecom, actually—oh, Spark—with some really innovative solutions to actually get them at least some form of—

💬 Peeni Henare: “Telecom”?

Yes, I know. It shows my age, does it not?

💬 Peeni Henare: No, it was when the bill was introduced.

Yes, it was. Good call—good call. That was to get them at least some form of ultra-fast broadband. But there is a practical application here. You know, these guys are all part of a volunteer fire brigade, which is the heart and the soul of the local community, and, as we well know, in rural communities the fire brigade, by and large, puts out very few fires but it attends accidents. These are the first men and women on the scene when something goes wrong, and most of the time they have not even got service anywhere. If they are out on the farm, the phone does not work and the pager service is a little bit dodgy, so if something is going down, they are not aware of it. That is wrong. In fact, not only is it wrong; it is just not safe.

I know Mr Ian McKelvie will know what I am talking about. He is from the rural sector, and he must have his constituents come up to him and say: “Come on, Mr MP. What is taking your Government so long?”.

Tens of thousands of New Zealand homes are no better off than they were 3 years and even 6 years ago in terms of their connectivity. Rural New Zealand, I believe, in this sphere, has really been let down by this Government. For those communities lucky enough to qualify to get the second phase of ultra-fast broadband, 130,000 of these people—New Zealanders; good, hard-working New Zealanders in the regions and the provinces—will be waiting until 2022-24 to get it. I do not think that is good enough.

Actually, I suspect that if the Hon Chris Finlayson had anything to do with it, it would be all over the country by now. He is a good, hard-working Minister who gets things done. In fact, it would not surprise me if the Chatham Islands probably has UFB before anyone else.

💬 Hon Christopher Finlayson: We’ve been looking—yeah, the Chathams would be fine.

Exactly—exactly. And for some communities, like the fringes of Auckland, believe it or not, and the fringes of Napier—so there might be Matawai up north, but even around the fringes of Napier, Ahipara in Northland, Piopio in Waikato, Edgecumbe in the Bay of Plenty, Kaikōura, and Waimate in Canterbury—the completion date for UFB2 is as late as 2024. That is 6 years from now. It is simply too long to wait for decent connectivity. I know there are challenges. I know we are a country of only 4.8 million people and we are long and we have a lot of isolated communities, but that is no excuse to not get it out, because it is holding us back.

The communities that are affected are often small and geographically isolated. They are vulnerable to not being connected, and 6 years is longer than it takes for a child to complete their secondary education. Businesses cannot benefit unless they have UFB2, and it is not until it reaches their area—in some cases, 7 years from now. There was a report written where economists talked about some rural towns becoming ghost towns because their reasons for living were no longer there, businesses were moving out or not relocating, and the young were going away and not coming back. That will change only if they have decent infrastructure, and in this case I am not talking about roads; I am talking about ultra-fast broadband. With ultra-fast broadband, a company can work anywhere.

We are doing a little bit of this in Wairoa at the moment. There is a film editing company there that needs to send massive files across to the other side of the world. Now, with ultra-fast broadband, they can do it. They can sell their million-dollar homes in Auckland and they can go to the outdoor capital of New Zealand, old Wairoa—it is a fantastic spot. There are beautiful beaches, lakes, rivers, hot pools, Rocket Lab, scenery, and that sort of carry on. But do you know what? If we have not got the infrastructure there to support this, then people have not got a reason to sell their million-dollar houses, go down to Wairoa, and buy a mansion for $400,000.

We have got to get this sorted, and the thing for me is that great education, I believe, is a fundamental human right. If we are not delivering that, then we are not giving the kids who live in rural and provincial New Zealand a fair chance to play on an even playing field. We have got to get this sorted—we really do—and it is taking too long.

The digital divide in New Zealand, like I said, is very real. In 2014 the Government committed $150 million—good on it—for the second phase of rural broadband and improving mobile blackspots. We supported that. We were all for it. But do you know what? Now it is 3 years later—3 years later—and it has yet to announce how it will spend it. That is a long time when you are a community waiting for ultra-fast broadband when the money is actually there. It is not as if it has to come from another budget or be found somewhere else or dug up from the ground. It is there in the Budget for this project, and it has not even been spent. That is a waste of money and a waste of potential, and it is wrong. There is no time line for how the Government will spend it. I know this: the people of the communities who have not got this service are sick of waiting. They really are. It needs to be better.

The regime proposed under the legislation we are talking about makes sense, and Labour supports it—there is no doubt about that. It does three things. It introduces a predictable utility regulation model for ultra-fast broadband fibre. Where fibre is available, copper lines will be deregulated from 2020. The bill includes measures to improve the quality of service for consumers by increasing regulatory oversight, and all those other things the Minister spoke about. But there is one reality here: we have heard this before from this Government. I remember in election 2008, it made a whole lot of promises about ultra-fast broadband and rural connectivity. It has been 9 years, and it just has not happened. It is not good enough.

What we promise on this side is relentless positivity. It is about backing the regions, it is going hard on the issues that are important, and this is a very important issue for our rural and provincial communities around New Zealand that have not got this service. We need it now. Thank you very much.

I am trying to figure out which microphone I am supposed to be speaking into. It was turned the other way. It is normally facing the other side, so I had to sort of figure that out. Sorry about that.

I would like to take a leaf out of the book of the gentleman who took his seat, Stuart Nash, to thank you, Mr Assistant Speaker Tisch, for your leadership in this House. As a new member coming into Parliament in 2008, I still remember the cheat sheet that you provided for me in terms of which Speakers’ rulings and which Standing Orders I should familiarise myself with. I thank you for the guidance that you provided me as a young, new MP, and I wish you a fabulous retirement from this place.

The ASSISTANT SPEAKER (Lindsay Tisch): Thank you.

Do you know, Stuart Nash talked about the relentless positivity on that side. I was wondering where he was actually going to get to in terms of what the positivity was about. I guess Labour has to try to keep positive. It has had so many trial runs at the positivity. I mean, you know, before this current leader there were four others. It started off with Phil Goff, David Shearer—I quite like David Shearer—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

—and then it was, you know, David Cunliffe. Talking about this bill—yes, I am getting to the bill. Thank you for the opportunity to take a call on the first reading of the Telecommunications (New Regulatory Framework) Amendment Bill.

This bill seeks to update the Telecommunications Act of 2001 and establish a regulatory framework for fibre fixed-line access services in New Zealand by removing unnecessary copper fixed-line access service regulations, streamlining regulatory processes, and resolving the potential competition problems in the market between mobile communications companies. This bill is designed to make our telecommunications law fit for purpose and modern day for the new fibre-focused environment, and will put in place a better balance of incentives so that ongoing investment by network providers will continue to be encouraged while consumers are protected. The bill will also deal with a number of unneeded and expired provisions as part of the Government’s commitment to cutting red tape—cutting red tape is always good—and removing outdated legislation.

It is important to acknowledge, as Minister Macindoe said earlier, that connectivity to the wider world via fast internet speeds is increasingly important for New Zealanders, who actually live at the bottom of the world, as people see us. We are at the bottom of the world and are so far removed from the rest of the world that we actually do need fast internet speeds—and that is what this Government is providing—for our social lives and for our businesses to thrive.

I just remembered something from childhood. Children growing up now probably do not quite know how fast things have actually progressed in terms of technology and how we have actually changed. I remember as a child growing up in Korea in the 1970s when the telephone really had only one function. You just needed to turn the knob and all you got was an operator who actually connected you to your next-door neighbours, or whatever. That was how the telephone worked—I am remembering quite a few years back. Talking to people across the world on FaceTime was something that people never even imagined that they could possibly do back then, but children nowadays take it for granted that they can ring their cousins across the world. Whether they are in London or in Paris or in Australia or in Korea or in China, they can talk to each other face to face, and it is all thanks to the modern technology that we have developed as a world.

Earlier on Stuart Nash was talking about how this Government has taken so long to deliver this. I remember that during the Helen Clark era I think we had dial-up. But it is not just this Government that has delivered the fast internet; it is actually the global movement. The world is demanding faster internet. Technology progress is really fast, and in my lifetime, you know, from when I was a child to now, we have gone from turning the knob to ring people, to talking to people face to face via our telephones on FaceTime across the globe.

You know, it has become second nature, and I guess it is a very far cry from my childhood, when we had to rely on doing our homework research via the Encyclopaedia Britannica. Back then we did not think about Google or Naver. In New Zealand we get Google, but in other countries other services like Naver are actually more popular.

💬 Simon O’Connor: Which countries?

In Korea, actually, Naver is—yeah, yeah, I was thinking of Korea. Faster internet access supports the economy and contributes to the depth and vibrancy of this country and the trade and market options that people have. Recently I was talking to someone when I was doorknocking, and they were talking about their cousins who had moved back from overseas. The reason they were able to do that when they were doing trade across the world—they were living in a remote place in the South Island, but because of the fibre access that they had, they could access the world from a remote place in the South Island. Like, you know, in Invercargill you can do that.

The new regime that this bill will put in place will ensure that ultra-fast broadband providers cannot make excess profit at the expense of consumers, but it will allow for them to expect a reasonable rate of return on their investment, as well as provide incentives for continued investment into this important market area. I think that is really important, because any investor who is investing into technology or business must actually have a decent return on their business. A revenue cap will be introduced, as the Minister said, on Chorus as part of the bill, and the company will be required to provide key anchor services to its wholesale customers, such as entry-level broadband products and a voice-only product.

One of the things that I was really interested to read was the reaction from the industry. I think it was TUANZ—T-U-A-N-Z, which is probably not very well pronounced—or the Telecommunications Users Association of New Zealand, that said it “welcomes today’s long awaited introduction of the Telecommunications Amendment Bill which is the outcome of the review of the current regulatory framework.” That is what it actually said—I am quoting. This was on 8 August: “ ‘Earlier this year we stated our support of many of the proposed changes when outlined in an options paper, and it’s pleasing to see these make it to Parliament’ said Craig Young, Chief Executive of TUANZ. ‘The contents of the bill will have important implications for consumers and businesses not only in the short term, but most importantly in the post 2020 world of digital communications’.” I think it is really wonderful to get the support of the industry, and I am sure there are many others whom I could quote from.

The gradual withdrawal of the copper network over the next several years is also an important issue that is being addressed by this bill. Chorus will be regulated by a copper withdrawal code, which will set out minimum conditions before a copper line can be withdrawn from the service area.

The consumer protection clauses of this bill are also important. It is clear that the existing consumer protections are not satisfactory for telecommunications consumers. The 2016 New Zealand National Consumer Survey showed that nearly a third of all consumers reported having a problem with either their fixed broadband or mobile services, with around one in 10 having problems with both. It is important that we lift the quality of service performance in the telecommunications sector and provide a better service in the New Zealand retail telecommunications market by putting in place better laws and regulations designed to support the best interests of consumers. I think this bill does that. I do know that the Commerce Committee will no longer be in the next Parliament, but when we do receive it in a select committee I look forward to going through the process of select committee hearings and submissions from public. I commend this bill to the House.

Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou, kia ora. I have got two words for why I am supporting this legislation—old Telecom. I remember old Telecom, a monopoly that was pretty slow and lethargic and the CEO of which once famously said deception was its major marketing tool. I remember the impact it had on New Zealand and on the price of consumer products in New Zealand and of those services. It is a testament to work done by, I think, both parties over time, over those years, to unbundle the services that we do not have an old Telecom. In fact, there is no such thing as Telecom New Zealand anymore.

In fact, there is a graph that I like to show as part of highlighting the electricity price rises we have seen the last 10 years that shows telecommunications spending as part of the consumer spending share rapidly dropping from the 1990s as electricity prices have continued to increase. I guess this is an opportunity for New Zealand, because what we want to see is Kiwis embracing new technologies, being empowered by them, and building businesses and jobs in a richer economy and country on the back of new technology. But electricity price regulation also provides somewhat of a salutary lesson.

The Green Party supports this, and we think this is the right approach to go down with Part 4 of the Commerce Act’s price-quality information disclosure regime in terms of the broadband and copper networks going forward post-2020. It is kind of surprising, because you would have anticipated a National Government—surely a National Government in the 1990s—would have actually gone for voluntary market arrangements of the participants. It is interesting that it jumped straight to a regulatory approach. It is one that we would support, but the devil is going to be in the detail.

As we have seen with those graphs—and I wish I had printed it out—one of the major price rises, or inflation in electricity price rises, over the last 10 years has in fact come from the regulated sector of the electricity industry. These are the 29 regulated lines companies and the national transmission monopoly Transpower. Basically, the way the system is run through the input methodologies as administered by the Commerce Commission has a huge bearing. What we have seen is the regulated component of a consumer’s power bill go from around a fifth, or 20 percent, of the bill to now around 40 percent, on average, for many consumers across the country. This has been the major reason why prices have increased, not in the competitive parts; in the regulated part.

I talk about these two options because, in a way, we want to get the benefits of not having an old Telecom - like system and seeing such significant unaffordability of telecommunications products for customers, but we also need to make sure that we do get the regulated price settings right. We are fortunate in the sense that in this legislation we are regulating only a single monopoly, which is Chorus. In the electricity networks you have got 29 electricity distribution businesses all being regulated. You have got some of the other local fibre companies, which now would face an information disclosure regime under this legislation, but not a price-quality path as administered by the Commerce Commission.

So, look, we think it is good. We think there are some benefits, but the devil is going to be in the detail, particularly in how those input methodologies are developed by the Commerce Commission, because that is how we are going to set prices going forward. So we are supporting the bill, because we think a regulatory-first approach is the smart, best solution for consumers to make sure we have affordable internet services going forward. But we need to make sure that the settings, the foundational structures, are there to make sure we are not just building in future price inflation and we are not just giving a fantastically high rate of return for the capital owners of Chorus, much above what you would normally get in a competitive sector of the economy, and also that we are not slowing down new technologies—maybe new packer technology to move data round on the fibre cables—as we could perhaps make an argument that we are in the electricity network. Because it is so heavily regulated by the Commerce Commission, it is very good at including expensive poles and wires in its regulated asset base, but less so when it comes to embracing new technologies—maybe solar or maybe battery technologies, which would be cheaper on a capital expenditure basis for the local lines companies. But because of the way that the input methodologies system has been run, it has not gone down this path, despite it perhaps saving its consumers money.

This is the big part of the legislation. It is going to be fascinating if we are in the fortunate position to work on it in the 52nd Parliament.

The other big changes—and I am sure members, if they are returned as well, will have lots of constituents asking them about their copper network, their copper telephone systems, being turned off. This is a big concern, particularly in provincial and rural communities, where they are unsure of the reliability of fibre in power cuts and all sorts of other circumstances. So the phase out of the copper network is going to be, I think, quite contentious and controversial. It is going to be interesting to hear those views around select committee. The Government has decided on a copper withdrawal code as a mitigating tool, with these minimum conditions. That is going to be very interesting to see how that works in practice, and we look forward to engaging with that.

The last part I want to touch on is the so-called anchor products, because while the Government has gone down a path of regulatory approach in terms of price quality with a revenue cap, when it comes to these baseline services it is going down a price-setting regulatory approach for those anchor products—these are the baseline fibre services. It is going to be very interesting to see how it sets it.

We remember the big debates we had when the copper prices were set—to go back 2 or 3 years ago—and just how a matter of cents, or tens of cents, would deliver hundreds of millions of dollars to Chorus’s bottom line but, equivalently, also take that out of consumers’ weekly pay cheques. So how those anchor products are set and the price point will be incredibly important. How that flows out across the other fibre services and products that are offered by the market will be incredibly important.

So I have talked about some of the benefits. It is going to be very important to go through in detail to make sure we get this right, because, as we saw with old Telecom, the way that these structures are built—and they are so fundamental to the New Zealand economy and society—if they are set up wrongly to not get the right outcomes, we are going to harm the New Zealand economy and harm our society and our ability to engage with new technologies.

I would issue a warning to those consumers who will be looking at telecommunications and internet policies this election and at which parties are going to stand up for a good, high-quality, fast, affordable internet and all the laws that make sure the internet runs. They just need to look at the way its Rural Broadband Initiative has been managed by the Government to provide another salutary lesson in how perhaps you need a different party to make sure you are looking in the interests of the internet community in this country. Here you have a policy—I do not know if this has ever happened in history—announced before an election that still has not been implemented before the next election. It is another policy up the sleeves of Steven Joyce and Simon Bridges to roll out—as if the community could not remember, or it somehow went down the memory hole—from 2014 that the exact same policy will be reannounced. It is absolutely staggering, the audacity of the political machinations of the Government when it comes to the Rural Broadband Initiative. We want to see rural broadband rolled out across the country. We want to see cell towers and repeaters making sure that our rural communities are connected to high-quality internet. What people do not want is rehashed policies relaunched without the actual substance.

We also want a whole country that is connected and able to access the internet, and that is why it is simply staggering and deeply disappointing that the Government has cut the Computers in Homes programme. Here you had a successful programme rolling out computers—particularly to low-decile communities who were missing out from accessing the internet at home—so kids could do their homework at home using the new technology. Instead, what has the Government done? It has cut this incredibly successful programme. It is deeply disappointing, it is deeply regressive, and what we are going to see is a two-track society where some kids can access the world’s information and the world’s knowledge of best-practice teaching using the computer and the internet services, and other kids miss out for simple price reasons. The Government needs to step up.

More importantly, the Government could—and a Green Government would—set a target to close that digital divide. In 2017 no New Zealander should be going without access to the internet. A few years ago I launched New Zealand’s first ever crowdsourced bill, the Internet Rights and Freedoms Bill, where I said that the right to the internet is a modern-day right. All of our other rights to express ourselves in our modern world and our democracy flow from the ability to engage with technology. It is a right to be able to access the internet, and it is a darned shame that some Kiwis are missing out when successful programmes were fixing it.

There is a huge number of issues about how our country harnesses new technology to build a modern economy. There is a limit to how many tourists we can cram into Fiordland, there is a limit to how many cows we can cram into our paddocks, and we are seeing it in the state of our rivers and waterways. There is no limit to the export of smart services, intellectual property, and software around the world. That is where I am focused in my work in Parliament—making sure that we can make the most of the new economy. I support New Zealand’s tech industries’ call for a “Minister for the Future” to grasp these issues, because while we are talking about regulating telecommunications going forward, let us also talk about how we take up the opportunity for the economy in our society. Kia ora koutou.

Mr Assistant Speaker Tisch, as I begin taking a call on this Telecommunications (New Regulatory Framework) Amendment Bill, can I take a moment—because I suspect this will be my last speech in the House—to acknowledge you as Assistant Speaker and the retiring MP for Waikato for the service that you have given to this country. I am not sure, seeing as you have given your valedictory speech, whether you are now able to actually stop me speaking. It is a bit of a conundrum. Are you allowed to speak—who knows?

The ASSISTANT SPEAKER (Lindsay Tisch): I still have all the powers.

Ha, ha! Can I also acknowledge as well—I am not going to go through all the members—my good friend and colleague Paul Foster-Bell, who is sitting next to me, and while he has not given his valedictory speech, he is leaving this House after many years of service. Paul, first and foremost, as a mate, you will be missed from this House, so thank you.

Modern telecommunications have become quite a norm for us. I would not go as far as the previous speaker, Gareth Hughes, did—to suggest that it is now a human right. Those in the House will not be surprised that I take a particularly philosophical view of what are and are not human rights and reject pretty strongly what are human wants masquerading as rights. I just want to put paid to the idea that somehow now the internet is a human right, by indicating that while in New Zealand we want to have it and it is a good thing, I think it would be very difficult to go into, say, sub-Saharan Africa and explain to people there that the need for housing or the right to water and clothing is now equivalent to having the internet. I think certain members who propagate that idea would be laughed off a certain piece of land.

I think I would also want to point out that, actually, there are some remarkably good projects out there in the telecommunications field, in those, let us say, poorer or less fortunate communities. It was mentioned by the previous speaker who sat down that somehow there is a complete absence, but, actually, I think of an area in my own electorate, in Tāmaki—Glen Innes—where a most amazing project called the Manaiakalani Project is in play. In the long and the short, within the telecommunications framework—and there are two elements to it—young children get their own digital devices. They get free internet access. Really importantly, they get free internet access in their schools—and there are 11 of them in my electorate at the moment—and free internet access at home for them and their families. Telecommunications—yes, it is run by big companies and it is supported by Government, but it is also run and supported by individual groups, families, and communities.

Can I take this chance, as we read this new amendment bill a first time, to acknowledge all those behind the Manaiakalani Project. There are particular individuals, but a number of companies have been mentioned tonight. Actually, Spark and Vector—two big companies that probably get decried at some level by opposition groups—are funding millions of dollars into providing telecommunications access to some of the most disadvantaged in our communities, and I think that is just tremendous.

This bill is ultimately about creating a system that is fit for purpose for our modern telecommunications. I know my stepson Ethan is watching at home, and he is probably the greatest advocate for ultra-fast or fibre broadband in the country. In fact, I think one of the best things I have done, other than marrying his mother, was to make sure we got—and she is probably watching, too; I will just put that on record—fibre connected to our home. What an enormous difference that has made, not only to our family and, I think, to your sanity, Ethan, and mine but, actually, to all those New Zealanders who are coming on board. We have a really proud record as a Government of rolling out this ultra-fast broadband.

I know that within my constituency, there are still areas demanding access to it. Unfortunately, we cannot install it all at the same time. What we are seeing now, and what this bill begins to address, is that we are moving to an ultra-fast broadband or a fibre set of communications and moving away from copper technologies. This bill addresses, well, four aspects, but two of them are of this.

💬 Hon Christopher Finlayson: That child should be studying.

I am just hearing from my side one of my colleagues suggesting that Ethan should be busy studying at the moment and not on the internet. I just have to inform the honourable member—

💬 Joanne Hayes: Latin.

He could be studying Latin. I have tried to teach him Greek as well, but that is actually not going so well, either. But, you know, they can use the internet for study now. They can—it is great.

The first thing that this bill is looking to do is introduce a new utility regulation framework. Basically, and the long and the short of it is, we are wanting to make sure that ultra-fast broadband providers do not make excess profits. It will surprise no one in the House—and I am very much a National Party person—that I have no problem with groups making profits. In fact—

💬 Hon Member: Quite right.

—it is a normal and, as my colleague says, healthy and quite right dynamic. But we are not into excess profits. The benefit of profits, as I have already indicated, allows the likes of the Vectors and the Sparks to actually support their communities and give back, but excess profits do not help anyone. So we are putting in a new fixed-line regulatory framework, and Chorus in particular will be subject to a revenue cap to provide certain anchor services.

I am not mixing up my brands here when I talk about Chorus and anchor, but with anchor services, we are talking about the likes of very basic broadband capabilities and voice capabilities. We think back to the pre-broadband era, or even to dial-up, when the basic for anchor services was a copper phone line. Once we ended up with the likes of dial-up, VDSL, and ADSL, those had become basic services. So we are now saying that, actually, the likes of fibre and a voice connection—probably through Voice over Internet Protocol—are going to be a key and, as I say, an anchor service. We are hoping that in doing so, we will provide some price stability for consumers and, obviously, retail service providers as well. So there will be a market benefit there.

One of the elements of the bill is around speed, too, which will be demanding a minimum—sorry, not a maximum; I had better be very clear about that—of about 100 megabits a second upload. No, I am actually mixing everything up all of a sudden. I am going to get told off by Ethan back home. It will be a 100 megabit download and a 20 megabit upload. That is a good start, and a lot more is possible. I think, fundamentally, what people should understand as well is that fibre can work at a lot greater speeds than that, but we are saying that is an absolute minimum.

We are also looking through this bill to deregulate the copper services. It is quite natural that those investing in ultra-fast broadband or fibre are going to be moving out of the copper sector, so it does not make a lot of sense that any monopolistic dynamics continue. So there has to be withdrawal there, allowing others, if they choose to, to come into that market. We are wanting to make sure, though—and the bill is very cautious around this, but I think the select committee will take a bit of time on it—that the copper owner does not withdraw too early. It is going to be quite important—

💬 Paul Foster-Bell: No premature withdrawal.

—yes—that it is not going to be too early. It is going to be quite important that the services required of the copper network—or what, rather, consumers expect of their copper network—remain. Put another way, we will have to make sure that the fibre services are providing the same, if not better, service to those communities before copper services are withdrawn.

We are also looking to streamline the process for the regulation of services. I am not going to go into all those details. They get a little bit complex, and I think they are better handled, actually, within the select committee. But the final side—the fourth element of what we are doing—is, basically, around greater consumer protections. In drawing this as No. 4, I do not think it actually takes away from the other three being important as well. As I mentioned earlier, it is almost like a bit of a see-saw. We are making sure that as the fibre services come in, copper declines or is used differently. That is for the benefit of the consumer, as too is putting some revenue caps around fibre providers to make sure that consumers get a good deal. But the bill itself is seeking to enhance consumer protection.

I think that if you were to ask many people, perhaps even in this House, what their experience has been of telecommunications services, it would not always be positive. I want to be very clear up front that this Government has put an enormous amount of taxpayers’ money into improving the services. We still have quite a way to go. I think of various mobile black spots. I think of even just the quality of the copper line. I could always tell when I was calling home, or I was getting complaints from home about internet services, pre-fibre—I could work out the weather in Auckland was raining. The long and the short is that if it is raining, the copper network begins to get compromised. So we are very keen to see how we can actually improve those services and increase people’s—I don’t know—expectations, but I also think there is an element of responsiveness.

The bill aims in this fourth section to lift consumer service quality across the sector and improve responsiveness to consumer needs. I think that is at the heart of this bill. I think it is going to be quite a substantial piece of work in the 52nd Parliament, particularly for those on the select committee. Going through the bill over the recent days, this is a substantial piece of work, but I commend it to the House.

I call Michael Wood.

💬 Hon Ruth Dyson: Oh, this will be good.

Well, my colleague Ruth Dyson was just complimenting the House on the quality of debate about this important bill tonight, and I can only say things are going to get even better as it proceeds. I rise to speak in favour of the Telecommunications (New Regulatory Framework) Amendment Bill. It is actually one of those really, really important bills because, as is noted in some of the notes that, no doubt, other members have read, we are talking about what is now one of the major utilities in our lives.

When we talk about the utilities, historically we have thought about having access to clean running water, we have thought about access to electricity, and we have thought about access to sewerage and waste-water services, and we have thought that those are the core utilities that in a modern, civilised, decent society, basically, everyone should have access to. If we found out that there was a person or a community in New Zealand who did not have access to those basic utilities, we would think that something had gone wrong. What many of us now believe is that access to modern, high-quality fibre-connected internet really is also one of those utilities, and why is that? It is because so much of what we might want to do in our modern lives—whether it is personal interest, whether it is business, or whether it is connecting to people who are important to us—absolutely relies on modern, high-quality internet connectivity. So it is a utility that people have come to rely on.

When you are talking about utilities, it is important that you have a degree of equity. If we have those utilities and some people in our community and our country have access to them and others do not, you get a divide, and that is an inequality that simply should not stand.

This particular bill stems from an inbuilt review of the Telecommunications Act 2001, passed by the very capable fifth Labour Government. I cannot remember which Minister that would have been under the aegis of.

💬 Jenny Salesa: Ruth Dyson?

💬 Hon Ruth Dyson: No.

Not Ruth Dyson, but no doubt a very capable Minister. That inbuilt review was put in place at that time really in recognition that this is a fast-moving environment—that the world of telecommunications changes immeasurably in 5-year blocks. Even if we went back to the year 2001, things would have been completely different in terms of the way that people communicate, so it is very sensible that in these major pieces of regulation in this area, we do build in these kinds of reviews.

It is also important that we do have good quality regulation. In respect of that, I want to turn to what I thought was a really good comment from InternetNZ, which participated significantly in the review that has led to this piece of legislation. So the review has been taking place over the past couple of years—since 2015. Pleasingly, it has been a relatively open process. That was one of the things that the Labour Party called for, that InternetNZ called for, and that the Telecommunications Users Association of New Zealand called for, to ensure that it was not just sort of locked up by the big players that might have had vested interests in terms of the way that prices are set and regulations are struck. We said it should be an open and engaged process in which people with an interest in this area can have a say. We commend the Government for going down that path.

Here is what InternetNZ had to say about why it is important that we have regulation in this area. Sometimes in this House there is a debate about whether we should or should not have regulation, and debates about the merits of regulation per se. Here is what InternetNZ Chief Executive Jordan Carter said: “It is … important that New Zealanders have confidence and predictability in Internet prices … InternetNZ believes that’s best achieved by proactive regulation of pricing for fibre and copper services to be in place by 2020—so we all know where we stand. Regulators are the vital protection for consumers. Commercial deals in environments like telecommunications access pricing never end up with the best deal for customers—in the absence of a contractual price (as initially set under the UFB programme) only a well-funded, capable regulator has the analysis and power to stand up to the interests of companies worth billions of dollars, and to encourage competition while driving the best possible bargain for those paying the bills.”

I think that is a really valid comment, because in the sector we are talking about large and powerful players. Of course, we have Chorus, which effectively operates a natural monopoly, and that natural monopoly is not something that we can test. It is not something you would want to duplicate. You would not want to have two or three different companies setting up a fibre network across New Zealand. It would not make any sense whatsoever. So having Chorus there as a natural monopoly makes sense, but it gives it enormous power and it is entirely appropriate that we therefore regulate it.

When we look specifically at the bill, what does it seek to do? There are a number of particular areas—and I will just pull out my notes here. There are four key things that it attempts to do. The first is to “establish a stable and predictable regulatory framework for fibre fixed line access”. Secondly, it is to “remove unnecessary copper fixed line access service regulation:”, and that is where we shift from copper to fibre, avoiding having a regulatory overlap. It seeks to “streamline regulatory processes to enable a rapid response to any competition problems,” that might emerge—and, of course, we cannot always foresee those at this point in time—and to “provide more regulatory oversight of retail service quality.”

I just want to now work through in a little bit more detail some of the provisions in the bill that give effect to those objectives, which certainly we in the Labour Party agree with. The first one is in respect of “Regulation of fibre fixed line access services”. These are about the particular regulations that we apply to Chorus, which is providing that fibre network across the country. There are two important things here. The first is what we call price-quality regulation, which is where the prices or revenue controls and requirements for service quality are placed on Chorus. So we are not just giving Chorus a free licence to set prices—potentially, when you are a natural monopoly, you could abuse that power—we are putting some controls over the way it sets its prices, which obviously then flows on to service providers and consumers.

Secondly, and this is really important, there is an information disclosure regime that comes into place, which means that we get publicly available information about Chorus’s performance and its financials so that we can assess that it is not making supernormal profits, that it is behaving in a reasonable way, and that it is not rorting people—including consumers, ultimately—further down the line. Then, in respect of the local fibre companies that are a tier down from Chorus, we say that they will be subject to the information disclosure regulation but not the price control regulation.

Another important aspect of this is what we call the “Establishment of input methodologies”, and that goes to how the Commerce Commission, which is ultimately overseeing and regulating this area, will determine what reasonable profits are and whether Chorus is behaving in a reasonable way that is not stifling competition and ripping off service providers and consumers. That means that Chorus is under an obligation to provide information about costs of capital, asset valuation, the allocation of costs, its taxation treatment, and certain other aspects of its business operation. These are things that we would not ordinarily expect of a business in a competitive environment, but when it is a natural monopoly like Chorus, it is reasonable that we ask these things so that we can assess that it is behaving in a reasonable way.

Importantly—and this has been touched on by a couple of previous speakers—we do also set in place a couple of anchor services. The way that I think about these, a little bit, is that under the old Telecom we had the Kiwi share obligation, which meant that Telecom had to provide for every household a very basic service of a landline—this was at the point when it was privatised. It was one of the few controls that we put upon it. It said: “OK, you’ve got a lot of power, effectively, as a monopoly. Here’s a basic level of service you have to provide to all New Zealanders.”

In the case of the anchor services, there is going to be price regulation around these as well, so it is going to refer to basic levels of internet connectivity, which is a basic service that you might have at home, and a basic voice-only service as well. One of the interesting points around this is that—and it is really important, actually—in this piece of legislation we are going to be setting certain standards in respect of what those anchor services should be. So these will be the basic services that all New Zealanders can rely upon. They might get more, but this is the minimum that will have to be provided by Chorus.

We have heard that that service has been set at, I think, 100 megabits per second download and 20 megabits per second upload. InternetNZ in its comments has actually queried that. It has queried whether that is setting the threshold a little bit too low, potentially, for New Zealand consumers. Given that we are aware that internet speeds are increasing all the time, I think it is really important that we get to the select committee stage, we get some expert advice, and we listen to the submitters to make sure that we are setting that anchor service at the right point. If we set it too low, then huge numbers of consumers across New Zealand are not going to get the best possible service.

One of the other important aspects of the bill is around review and enforcement. That is ensuring that the Commerce Commission has the chops, effectively, to go in, to look at what Chorus is doing, and to conduct investigations into its services where necessary, and then to have some real enforcement. So there is a maximum penalty, for example, of $10 million and compliance requirements that the Commerce Commission can use.

We do support the direction of this bill in terms of providing a modern regulatory environment. As previous speakers on this side of the House have said, the big concern that we have got, though, is that the Government has just been a bit too slow with the roll-out of high-quality fibre. I have got areas in my electorate in the middle of Auckland that are not getting access to fibre until 2019, let alone those people in the rural areas who face a wait until 2024, and that does stifle innovation and stifle choices.

We support this bill further, but we will also speed up access to high-quality broadband for all New Zealanders. Thank you.

Kia ora, Mr Deputy Speaker. I rise on behalf of New Zealand First to support the Telecommunications (New Regulatory Framework) Amendment Bill to the select committee only.

Before I begin my contribution, Mr Deputy Speaker, can I acknowledge you and your time in this House. There have been times when you have sat in the Chair and told me I am not funny. There have been times when you have sat in the Chair and told me that I am a bit shrill. But there have been other times—actually not in this Chamber—when, particularly in this term, you have poked your head in the door and said “Don’t let the … grind you down.”, and I appreciate that. You are a person whom New Zealand First appreciates, and I am sure that my colleague Fletcher Tabuteau has made sure that you understand how much you have been valued by him and by our caucus this particular term.

Can I also acknowledge Paul Foster-Bell, who is being smart enough not to make his valedictory in this term of Parliament because he will return at some stage in the future. People may not know that you only get one chance at it, so Mr Foster-Bell is putting some money on his future, and I am prepared to take that bet, Mr Foster-Bell. I believe you will be back. You have served this Parliament well in the time you have been here, and I personally have found you a joy to interact with. So I wish you well for the future.

💬 Matt Doocey: What party is he coming back on?

Not you, Mr Doocey—it is all right. Right, we will get back on to the—you see, I am trying not to be shrill. We will get back to the bill. As the explanatory note of the bill states, the aim of this bill is to amend the Telecommunications Act 2001; to establish a stable and predictable regulatory framework for fibre fixed-line access services in New Zealand; to remove unnecessary copper fixed-line access service regulation; to streamline regulatory processes to enable a rapid response to any competition problems, particularly in the mobile communications market; and to provide more regulatory oversight of retail service quality.

I pick up on Ms Lee’s contribution with regard to the Telecommunications Users Association of New Zealand and the long-awaited introduction of this bill. I pick up on Mr Wood’s contribution. I believe—I am sure it is in the regulatory impact statement; yes, actually, it is in the explanatory note of the bill—that this review has been going on since 2012. So that is actually 5 years that this has been in process. And I pick up on another member of the Opposition’s contribution—I think it Mr Nash, who started us off, who said that here we are, the day before the last day of the 51st Parliament, at the first reading.

This bill will go through. It is interesting. I think it has unanimous support; I am not sure. Is the Green Party supporting this bill? I cannot remember—yes, it is. So I am pretty sure that we have unanimous support for this piece of legislation, at least through to the select committee. So one wonders why it took this long to get here and why, the day before the last day, we are now having a discussion about it.

The reason why New Zealand First is a little hesitant to give it its full support—we will support it to the select committee—is this bit under the heading “Deregulation of certain copper fixed line access services”, in the departmental disclosure statement. The bill provides in relation to copper fixed-line access services—which is Chorus’s unbundling bitstream access and Chorus’s unbundled copper low frequency service—that from 2020: “In areas where fibre is available, Chorus will no longer be required to supply copper fixed line access services, or”—and this is the important bit—“meet the obligations specified in TSO instruments.”

What are the telecommunications service obligations (TSO) instruments? There are two TSO deeds right now, inside the Telecommunications Act. One is a telecommunications relay service (TRS) for the hearing-impaired, which is between the Crown and Sprint International. That is called the TRS. Then there is the local residential telephone services (LRTS) deed, which is between the Crown, Telecom, and Chorus, and that is called the LRTS.

I think Mr Wood started to touch on it. When Telecom was privatised in 1990, the Kiwi share obligation placed a number of requirements on Telecom in respect of the local telephone services. In December 2001 these requirements were suspended in an enhanced form, and became the TSOs. Chorus will no longer have to meet the obligations in this requirement. So the TSO was the TSO for the local residential telephone service. The local service TSO is primarily a consumer protection mechanism that ensures the availability and affordability of basic telecommunications services in New Zealand.

You might say “Well, it is covered somewhere else in this piece of legislation.”—you might say that. The local service TSO ensures that residential local telephone services are available to residential customers throughout New Zealand, and are available in rural areas at a price and quality—and quality—comparable to the local service available in the urban areas. The word “quality” is important, and again, I think we might find—but we want to hear from submitters—that this may end up being covered in another clause.

But the TSO deed further required Telecom to offer residential customers the option of toll-free calling. We have not got toll-free calling in Auckland at the moment. Te Hana, Wellsford, and Warkworth have to dial 09—it is not toll-free—to call somebody in Devonport or Tāmaki. And we are changing—we are removing—Chorus’s requirement for an obligation here under these TSOs. Will this be one of those obligations that are removed? Why has somebody not been enforcing it now for the city of Auckland?

The second thing they have to do is limit the price rises in the standard residential line rental to no more than the rate of inflation as measured by the Consumers Price Index (CPI). I think there is conversation inside the piece of legislation around making sure that the basic package has no price rises other than the CPI.

But the third is to enable residential customers to make emergency 111 calls. I want to go back: “Chorus will no longer be required”—this is once it does away with the copper fixed line—“to supply copper fixed line access services, or meet the obligations specified in TSO instruments.” Which obligation is really, really important—which obligation? I know that we get calls all the time from some of our older citizens who are concerned about this switch. You could say that they just need to move with the times, and that is fine. But we need to be able to assure all our citizens that they will be able to make a call in an emergency, whether the power is on or off. In lots of emergencies the power tends to go out.

The other bit that we have in the departmental disclosure statement is that the bill provides consumer protection measures for consumers of copper fixed-line access services if Chorus seeks to stop supplying copper network services. It says: “Before Chorus is permitted to stop supplying a copper service, comparable alternative fibre services must be available at similar prices, with similar functionality, and certain processes must be followed, to reduce transitional risks.”

It will take a little bit to convince us and those in the Far North—those who have been living on the copper wire up in the Far North, where the copper upgrades have not taken place. More and more connections have continued to be sold, so that what was originally a workable speed, even on copper, has now actually faded out to something that is less than dial-up.

Thank you for the opportunity to participate in the first reading of the Telecommunications (New Regulatory Framework) Amendment Bill. Before I contribute on this bill, Mr Deputy Speaker, I would like to acknowledge your leadership and your friendship. You will definitely be missed once you are gone from here.

I would also like to acknowledge Paul Foster-Bell and David Clendon. David was on my Law and Order Committee. Your contribution was always constructive, and you will also be missed on the committee, David.

This bill amends the Telecommunications Act 2001 to establish a stable and predictable regulatory framework for fibre fixed-line access services in New Zealand. The technology is changing, and I would like to quote one thing that Michael Wood has just mentioned, which is that the basic amenities that are required in the modern world are water, sewerage and electricity. I think that in the 1970s and 1980s, the telephone also became a requirement in every home. I remember when I was growing up in India, my friend who had come back after the summer vacation told me that he had learnt how to dial a telephone, and that was a shock to me. The telephone was a basic thing in my home. I did not learn; I saw everyone using the telephone. But for him, it was a totally new experience because his family did not have a telephone at home. He had gone to his aunt’s house and had learnt how to dial a telephone.

Similarly, the technology has advanced so much that today, broadband is a basic need in everyone’s work or at home. I remember about a year ago, I attended a seminar where a presentation was made that said that about 15 or 16 years ago, the total traffic from New Zealand on the internet was 40 gigabytes. The total internet traffic of New Zealand was 40 gigabytes. Today, each household uses that much data. The technology has changed so much. Even for the mobile phone, we used to have about 200 megabytes or 500 megabytes. Today, we are using 10 to 20 gigabytes on mobile phones. So the technology is changing, and that is why we need to have ultra-fast broadband (UFB) in every house, so that people can take advantage of it.

When I came to New Zealand in 2001, I bought a dish antenna that had a diameter of 1 metre. I got it installed to see the Indian programmes because the technology was not there, and that was the only way I could see the Indian programmes. Today, we just need a box connected to the fibre, which is internet protocol television (IPTV), and you can see more than 500 channels from India. All around the world—China, India, Korea; wherever you want—you can see those channels through that IPTV technology, and that is because of the fibre-optic.

We are very fortunate that this Government has invested billions of dollars to make sure that every house gets a fibre connection. We are looking forward so that by 2020, about 90 percent of the population will be able to get that access. We are also very fortunate that so far, whatever the fibre-optic layout has been, the uptake has been much higher than for other countries in the OECD. It is even more than Singapore. If we compare, Australia is far behind us in UFB uptake by the people.

The new regulatory framework enabled by this bill will modernise the Telecommunications Act so that it is fit for purpose for New Zealand’s new fibre-focused telecommunications environment. It will put in place a balance of incentives so that ongoing investment by the network providers will continue to be encouraged while the consumers will be protected. We can see that we have to have that balance where the investors get a reasonable return for their investment and consumers are not overcharged. They get the best facility at the minimum price, so that there is reasonable competition between the service providers. It will create a more predictable telecommunications environment, target regulations more effectively, and support consumers. These are the things that we need to keep in mind, and we have to have the right balance for the service provider as well as for the consumer.

Connectivity is increasingly important for every aspect of New Zealand’s social, economic, and working life. As I mentioned, most things are now done through the internet, whether it is television or telecommunications. Even if we look at some of the programmes that are available around the world from Netflix and other service providers, we can access those programmes while we are in New Zealand, but, basically, these programmes are from the US or Europe, so we have to have the technology available so that we can have access these things.

Access to faster communications services and infrastructure is a great enabler of economic growth and it contributes to increasing the depth and vibrancy of New Zealand’s digital economy. With these words, I commend this bill to the House.

Is this a split call on behalf of the Green Party? I go to Barry Coates first.

Tēnā koe e Te Māngai. I join others in thanking you, Mr Deputy Speaker, for your service to the House. I have been here for only a short time, but I have much appreciated your calmness and your position, so thank you. I also pay tribute to others in the House, most notably my colleague David Clendon, who is leaving after many years of great service, and Paul Foster-Bell, whom I have enjoyed sharing select committee time with.

I rise to speak about the Telecommunications (New Regulatory Framework) Amendment Bill. To avoid a great deal of suspense, the Green Party supports it, as my colleague Gareth Hughes has already said. We agree broadly with the aims of the regulatory framework, which are to support long-term investment in infrastructure, ensure telecommunications services are provided in a competitive process, and ensure that providers respond to consumer demands for quality. It is particularly that last point, around a more consumer-oriented approach, that we welcome. I think previously we have seen telecommunications regulation not being handled well in our country, and we commend this legislation, which, at first glance, appears to have responded to some of the previous criticisms and has very much a pro-competitive and consumer orientation.

We also agree with the framework of the regulation in that the new regime will have sound measures to ensure that ultra-fast broadband providers cannot make excess profits—they are currently a monopoly—and can expect reasonable rates of return, which we feel is entirely justified. These provisions are welcome, and particularly so is the transparency that is included in the bill in the charging regimes and the price regulation of the anchor products. That seems to us to be a really important measure in order to stimulate competition.

We have some areas where we will be looking at the select committee stage for the bill to fully reflect our concerns. The first is in enhanced consumer protection. The previous speakers have talked about how the New Zealand National Consumer Survey 2016 showed relatively poor service. One-third of consumers had problems with one or other of their communication services and 11 percent had problems with both. That is too high. What we want to do is we want to use this bill to actually drive a far greater accountability to consumers, and we note that the submission from Consumer New Zealand into the options process had some very sound recommendations for how to do that. The key is the ability for consumers to be able to compare services and prices so that they can switch providers. That kind of provision is not yet included in this bill, and we think it should be.

There should be provisions around fair and complete contracts with consumers. At the moment, I cannot read my contract—and I think many cannot—without a magnifying glass. There needs to be access to effective and fair dispute settlement, rather than the voluntary industry dispute settlement at the moment. There need to be high standards for protection of personal data included in the core of the Act. A really important consideration is that there needs to be representation by consumer interests in the regulatory processes themselves, and funding for that. It is not only Consumer New Zealand that is saying that; it is also the submission by the Telecommunications Users Association of New Zealand. So we think that is really important.

Another consideration that we want is ambitious targets to drive further coverage. We want innovation and openness to new services. We want, particularly, support for those who are behind the digital divide, noting that that is particularly Pasifika and Māori communities, and we want a lift in digital competency across our country. With those considerations for the select committee, we support this bill. Thank you.

Raymond Huo—5 minutes.

Mr Deputy Speaker, I would like to reiterate what previous members have said about you and thank you for your many, many years of service to this Parliament. I thank you for your contributions towards maintaining and upholding the professional standards of this House.

I would also like to thank Mr Assistant Speaker Tisch, who was in the Chair earlier. For me, the most frequently used phrase from Mr Tisch was probably: “Come back to the bill.” So, to come back to the bill, we support this bill. This bill is the outcome of a mandated 2-year consultation process, from 2015 to 2017. The review, and indeed the bill, is very important.

The telecommunications market is changing. New technologies are changing our lives, and consumer behaviour and business models are changing and shifting as a result. In the old and gold days, probably the first thing in the morning was a newspaper or a talkback radio show, etc., but those have gradually been replaced by online news or social media such as Facebook, Twitter, or, for most Chinese people, WeChat, which is said to have more than 400 million subscribers worldwide. Therefore, Wi-Fi, broadband, and connectivity in general, and how effective or powerful that connectivity is, has become a kind of world benchmark or a kind of international standard to help gauge where a particular region or country is placed in the world.

Against that particular background, we have had the mandated 2-year consultation process. Broadly speaking, this bill, among other measures, establishes a new regulatory framework that will introduce stable and more predictable regulation for ultra-fast broadband (UFB), UFB fibre, and streamlined regulatory processes to enable a rapid response to any competition problems, particularly in the mobile communications market. The review is now completed. Stakeholders such as Chorus, 2degrees, Vodafone New Zealand, the Telecommunications Forum, etc., have made valuable submissions on the review. There will be a further opportunity to submit on the provisions in the bill during its examination by a select committee following the formation of a new Parliament after the general election. We look forward to that.

This is a first reading, so the bill will not get passed until the 52nd Parliament. In respect of the fibre agenda, this National Government has not achieved much in progressing the agenda, and, by the way, we have not heard anything about rural broadband or any plans in that regard. So tens of thousands of New Zealand homes are no better off than they were 3 years ago, or even 6 years ago, in terms of their connectivity, and rural New Zealand, in particular, has been really let down by this National Government.

Like with the infrastructure that has caused the traffic congestion in Auckland that we are facing on a daily basis, New Zealand lags significantly behind the reality of the world in terms of the fibre agenda. We are a great nation, but there is so much work to do to make this country better and fairer, and, hopefully, 23 September will make a huge difference. So let’s do this. Thank you.

Mr Deputy Speaker, at the risk of, I guess, making too much of your position, I just wanted to thank you for your contribution—

💬 Mr DEPUTY SPEAKER: Knock yourself out.

—both to my electorate as my neighbour, and to this Parliament. I think you have done a fantastic job for both and so I thank you for that.

I want to talk about this bill briefly because one or two issues have been raised tonight that I want to talk about. I will probably be going into a territory that no one will know about: 1-2-D. Does anyone remember what 1-2-D was? Long-short-long. So you used to dial the phone long-short-long.

We have also been on about metadata today and we are hugely concerned about whether metadata is frightening for people or relevant to people. Of course, in the days of long-short-long, all the neighbours on the same line who were 1-2-D, 1-2-C, 1-2-A, 1-2-B—they all knew when the neighbour rang up and, if you were quick enough, you could pick the phone up quietly and listen to what was going on down the road. So the metadata has been around for a long time. So that is one of the things that when you think about the copper network—because that was where I was getting to—the copper network, of course, was what drove metadata.

Not only did the copper network drive it, but when the line went down, you went out with a piece of No. 8 fencing wire and joined it up, just like you do with a fence, and away she went again. That was simple, was it not? Nowadays we need fibre and we need all this stuff in the air. It is way beyond the average person to hook up their telephone and make it work. That was the issue that I wanted to get to, because the challenge—and one of the major reasons for this piece of legislation coming to the House—is actually to protect a piece of New Zealand society and a piece of New Zealand community that were it not for the copper network would not have any kind of communication. I guess that is going to change quite quickly now, but, none the less, we need to regulate that sort of thing to ensure that it remains there until an alternative is in place.

So throughout history in New Zealand we have had a great history, really, of ensuring that the most remote people had electricity and telecommunications. This legislation, to some extent, protects that.

There was some talk from Mr Nash earlier on about the Government being a slow-moving Government. The point he has got to realise, of course, is that we are here for ever. This House is here for 3 years at a time but, actually, we are here for ever. So what we put in place is quite irrelevant to the current generation, because while the copper network has been around for generations and generations, what we put in place today will not be around for generations and generations, because the world is changing so dramatically quickly that it will be usurped.

That is another issue that I wanted to get to, because, if you think about some of the challenges that the Government has had over the years implementing rural broadband and things like that—which is that you pick a spot in the market, and you take your choice on the spot in the market you have got to, and all of a sudden, technology goes way past the spot in the market that you chose. So it is quite challenging to implement new technology in any environment, particularly in New Zealand—and the reason why it is particularly in New Zealand I will get on to in a minute—because when you pick a technology and you go with it, before you know it, it has been usurped by a more modern technology. That is the challenge of getting these types of things implemented throughout the country.

The other big challenge that we have in New Zealand—and those of you who have ever been to the King Country will know there are thousands of kilometres of one-way metal roads, and down every one of those one-way metal roads runs a power line and a telephone line. That is the real challenge that we have got in New Zealand—that it is not simple to match those kinds of environments to modern technologies. We have got to pick the technology that suits where we get to. Of course, that is back to the reason why we are protecting the copper network with this legislation for those people. It is that it will take some time to replace that copper network with the new technology that will enable it to move on.

I think this bill has a very important part to play in New Zealand, but whenever we go down this path of quick change, the more remote people are inevitably the ones whom we need to protect. We have seen this with electricity, we have seen it with a lot of other things, and we are going to see it with the internet and phone connections and things like that as well. So this bill, hopefully, will protect those people. As I talked about in terms of the technology earlier, unforeseen events often turn up, and even with the best intentions, the level of service that we want to have into the future is not provided. So we are challenged by some of that sort of stuff.

So I think this bill is a sound bill. All of the facts have been dealt with by people who know much more about factual stuff than I do, but I do know what happens when you live out in rural New Zealand and you do not get a great connection. I live 3 kilometres from State Highway 1 and I do not even have any kind of connection in my house except for the telephone that Parliamentary Services has given me to use. That is because there is no broadband at my place, 3 kilometres off State Highway 1.

So that is the challenge that we face, and that is not necessarily a fault of the Government. It is a challenge we face because of the geography of this country. We are unique, we are good at what we do, and we will get there in the end. So I have got a great deal of pleasure in commending this bill to the House. Hopefully, it will get through in the next Parliament, and no doubt this might well be my last contribution to this Parliament. It may—who knows—be the last contribution I make in here. Thank you.

Mr Deputy Speaker, first of all, I want to acknowledge you. Lots of people have. I want to do that acknowledgment with respect and I acknowledge all of the members who are leaving this House. This is likely to be my last speech in the 51st Parliament of New Zealand, and I want to talk about the future.

I want to say to the member Ian McKelvie, who just sat down, and to the Government—and I am really pleased that I made it back to speak on this bill—that I wonder what Julius Vogel would have had to say tonight about the last contribution, and what I see to be an apology to New Zealand for, really, an underwhelming piece of legislation, or the spirit that lies behind this. Labour is supporting this—absolutely we are supporting this—piece of legislation to the select committee, but in the next Parliament of New Zealand, let us hope that we can have some vision, true vision, that we can put behind this, because this represents the next really important piece of infrastructure that has to take our country forward. Not just parts of our country, I say to National; all of our country. All of it is as important as the rest. Rural is as important as urban. How about that?

The infrastructure that Julius Vogel stood for when he conceived the railways of New Zealand was about getting a means of transport out through and across our country. Every utility is about that, and I am afraid that we have not got there yet.

This bill represents a 2-year consultation process. It has been an important piece of consultation. This is an important piece of legislation in that it looks at a regulatory framework for fibre and copper from 2020, and that is an important piece of work that this Government has overseen. However, this Government has focused on getting needed ICT infrastructure built, but it has assumed—it has made a huge assumption—that if it puts in place a mechanism to get infrastructure built in part of our country, businesses will make good decisions about technology, and that has not happened in the recent past.

The reason that I wanted to talk about the future is that—and I notice that a number of speakers have talked about Netflix, they have talked about Facebook, and they have talked about various means of using technology. This is actually about New Zealand’s economic future. It is absolutely about New Zealand’s economic future. That is what the point of putting a new piece of infrastructure out into New Zealand is all about. But what this Government has not done is it has not been the advocate, it has not been the researcher, and it has not been the business operator in the sectors where it is directly involved. So, therefore, in terms of thinking about how the digital economy can drive our country forward into the future, it has been focused on delivering infrastructure into part of New Zealand but not all of New Zealand, and is not about how it can help all of the businesses, all of the parts of our economy, and all of the sectors to make the best use of that. That is the thing that is missing right now in our economy.

At the macro level, New Zealand is not improving on its international competitiveness in the use of technology. I want to mention the World Economic Forum’s Networked Readiness Index rating for New Zealand, which has improved marginally from 5.36 in 2012 to 5.50 in 2016. Meanwhile, our ranking in that index has slipped—actually slipped. Despite what Steven Joyce gets up in this Parliament and says almost every question time, our ranking has actually slipped from 14 to 17. We rate highly on infrastructure at 10th, on the regulatory environment at third, but not so well on the economic impacts of ICT at 25th, and business usage at 20th.

That is where we are lacking, and that is where any Government going forward into the 52nd Parliament of this country has to be focused—on how we can get our economy to use the technology effectively. That is what this Government has not done, apart from the fact that it has also treated rural New Zealanders as second-class citizens. This legislation provides a regulatory framework going forward from 2020, but it leaves a huge number of questions unanswered around how we are going to treat the copper network, what happens to rural New Zealand, how fibre is going to be rolled out throughout the whole of New Zealand, and the actual role of the infrastructure producer, the major infrastructure wholesaler—Chorus—and what its role will be.

But I do want to continue to say in my last speech in this House that the two biggest issues in this country for our economy are how a Government going forward will actually ensure that all of the sectors that it is responsible for can ensure that it will build a truly digital economy, and how we will achieve digital inclusion. The new measure of poverty in New Zealand will be the digital divide, not just between rural and urban New Zealand but within urban New Zealand, and the ability of people to access the digital economy, to access education, to be able to afford to be included, and to be able to have the skills.

What we need is a comprehensive action plan. We need industry groups to ensure that our productive sectors are focused on how they will manage in the digital economy. At the moment we have no plan for health, we have no plan for education, and we have no plan for transport. We have no goals that have been set by this Government for how people will access and improve in the digital economy. What we have is a Government that is focused on an ultra-fast broadband network, which the Labour Party supports, but there has been nothing that has been added on to it. The approach is: “We will build it and they will come.”

I am afraid that the end of this Parliament, the 51st Parliament, and this piece of legislation have not provided a visionary goal for our country in terms of digital inclusion and in terms of how the digital economy will actually succeed in this country.

Bill read a first time.

Bill referred to the Commerce Committee.