Telecommunications (New Regulatory Framework) Amendment Bill

I move, That the Telecommunications (New Regulatory Framework) Amendment Bill be now read a second time.

Could I also thank the Economic Development, Science and Innovation Committee for their work and consideration of the bill. I’d also like to thank all those who submitted on the bill for their valuable feedback. I also wish to thank officials for their work on progressing the bill to this stage.

We are moving to a new fibre world, and this bill modernises the Telecommunications Act to reflect that. It will establish a stable and predictable framework for fibre access services here in New Zealand. In light of the fibre roll-out, the bill removes copper regulation; it also streamlines regulatory processes to enable a rapid response to any competition problems. In addition, the bill gives the Commerce Commission greater oversight over retail service quality, and puts in place wider consumer protections. The roll-out for broadband is making good progress. The ultra-fast broadband (UFB) programme is ahead of schedule, and the second phase of the Rural Broadband Initiative and Mobile Black Spot Fund is picking up speed. Overall, the bill will provide a stable platform to further enhance New Zealand’s connectivity and meet the growing demands of consumers and business in New Zealand.

I’d now like to discuss the new regulatory arrangements in the bill. The changes made in the bill can be grouped into four main categories. First is the new utility regulation framework, and under the new regime, UFB providers can expect reasonable rates of return. They’ll also be incentivised to make ongoing investments in maintaining and upgrading their networks. However, the system will ensure that they cannot make excess profits at the expense of consumers. Under this new regulatory framework, Chorus will be subject to a revenue cap. The revenue cap gives Chorus flexibility in how it sets prices for most of its product, but it also ensures that Chorus does not earn excessive returns on its fibre assets.

In order to protect consumers, Chorus will be required to supply price-regulated entry-level voice and broadband anchor services and this will also anchor the prices of other products it offers. Chorus and other local fibre companies (LFCs) will be subject to information disclosure regulation, and this means that they will be required to disclose information publicly to enable scrutiny of their performance and profitability. LFCs will face competition from copper, cable, and fixed wireless networks, so they will not be subject to revenue caps. However, they can be regulated further if problems arise in line with other Part 4 regulation.

The second set of changes relates to the deregulation of copper services. In areas where fibre services are available, Chorus will be allowed to remove copper services, subject to consumer safeguards being met. 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. In areas where fibre is not available, the telecommunications service obligation applies, which provides for price-capped landline and dial-up services, and they will be retained. 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 affordable prices even when alternative networks are not available.

The third set of changes provide greater consumer protections. The bill improves the Act by boosting consumer protections, because it’s clear that the telecommunications industry needs to do better in meeting the needs of consumers. The bill augments consumer safeguards and provides for more regulatory oversight of retail quality standards and dispute resolution processes.

Finally, in this area, the process for regulating services is being streamlined. The bill will encourage further competition in telecommunication services through streamlining the process for the Commerce Commission’s investigations into regulating telecommunications services. These changes allow for more timely intervention by the commission when issues are identified, and further encourage commercial settlements as an alternative to regulation.

Changes were made at the Economic Development, Science and Innovation Committee. They supported the bill and, as I say, recommended some changes, and I’ll discuss five of those main recommendations. First of all, the line of business restrictions—the bill as introduced relaxed what are known in the Act as the line of business restrictions. These restrictions limit the kinds of activities that Chorus can be involved in. Submissions to the committee raised concerns about the relaxation of these restrictions, but the committee considered the concerns held by the retail service providers and others that lifting the restrictions would distort the market. On the other hand, Chorus and the other LFCs supported the relaxation of the restrictions, noting that the change would allow them to provide innovative products and stimulate competition. To address this issue the committee has recommended retaining the restrictions while creating a new exemption power for the commission, to enable innovative solutions for consumers that would not harm competition.

The bill as introduced did not provide specific guidance on how the Government’s contribution to the costs of building the ultra-fast broadband network would be treated in the new regulatory framework. The committee considered it would be helpful to clarify how this concessional finance would be dealt with, and the committee has recommended that, in relation to the asset valuations of UFB providers, they should be given the opportunity to recover actual costs to finance they have incurred—in other words, the commission should take into account the concessional finance received from the Government and should not assume that commercial finance rates were applied to the whole asset base. In addition, the committee recommended that the bill make it clear that regulated providers will not be protected from all risk of recovering their costs.

Thirdly, the purpose statement for the new fibre regulatory framework in the bill had a focus on outcomes for fibre users. The committee recommended a change to enable the commission and the Minister to consider all end users’ interests where relevant, not just the interests of fibre users.

Fourthly, the convergence of broadcasting technologies is blurring the boundaries between providers of broadcasting and telecommunications services. For example, it’s now common for consumers to stream television through the internet. To address this issue, the committee accepted advice and recommended that the definition of “a telecommunication” be amended to include broadcasting transmission services also. This proposed change could improve consistency in how the servers are treated in the future, particularly given the emergence and growth of fibre as a means of transmission for TV. The commission will be able to monitor or investigate the commercial conditions for digital terrestrial transmission through its existing Telecommunications Act processes, if this is needed.

And, lastly, as I noted earlier, the new system will require Chorus to provide price-regulated anchor services in order to protect consumers. The bill specifies that the price of the anchor services is based on the prices Chorus charges in 2019. The committee received submissions raising concerns that consumers could face a substantial increase in prices because Chorus could raise prices before the new system kicks in. The committee considered that consumers should not be exposed to price shocks but that there was not sufficient time to address the issue at the committee stage of the bill. So I would like to note that I will be putting forward a Supplementary Order Paper for this bill at the committee of the whole House stage.

In conclusion, the new regulatory framework put in place by this bill will bring the Telecommunications Act up to date in light of New Zealand’s fibre-focused telecommunications environment. The system will encourage further investment by network providers while also protecting consumers. The coalition Government commends this bill to the House and hopes that the National-led Opposition will too.

May I just express our congratulations to the new Minister of Broadcasting, Communications and Digital Media, who managed to do 10 minutes on this speech, in such a new portfolio—well, 8½ minutes. I just want to acknowledge the communications Ministers we’ve had in this Parliament, starting with Steven Joyce, who really kicked off the whole ultra-fast broadband (UFB) rollout in New Zealand, followed by Amy Adams, Simon Bridges, Clare Curran, and now Kris Faafoi. It’s incredibly complex and anything to do with regulation that has monopoly powers is something that needs a lot of thought. Can I also say thank you very much to the Economic Development, Science and Innovation Committee for the very intensive work that you have done and for how we worked together to try and bring together a passage of legislation that is going to work for our future. It’s very important that we, in these particular areas, try the very best to find the right position for New Zealand to operate in.

At the end of the previous Government, just before we went into the election, this bill came into the House. It went into abeyance because of the election, and it was taken up by the new Government and brought forward. At that point in time, almost 1.2 million New Zealand households and businesses had access to ultra-fast broadband, and we were fast approaching our 1.5 million households and businesses able to connect. Currently, that figure is 1.4 million. So we’re well on the way, and I think, as the Minister made a comment, this is incredibly important for New Zealand’s economy, for our education, and of course for entertainment. I have discovered—maybe my facts and figures are a little bit old—that New Zealand is doing quite well in terms of international rankings. If people out there were going to download a 7.5 gigabyte movie, it would take just over an hour. It is a bit quicker in Singapore, but if you lived in Yemen, that same movie would take two days to download. So New Zealand is doing well.

In terms of worldwide rankings compiled by broadband comparison service cable.co.uk, they put Britain one place below us. The United States is 21st; so they are nine places in front of us. Australia was 25 places behind us in terms of world rankings in speed of broadband. And South Africa, as we know, is just 2 points in front of us. Nobody got that one!

💬 Hon Members: Ha, ha!

A few! So this National-led Government allocated approximately, in the previous Government, $2 billion to deliver better connectivity. In the Telecommunications Act 2001, it required a review of the telecommunications regulatory framework to be undertaken, to be commenced by 30 September 2016 and to be completed no later than 31 March 2019. So we are right in the middle of that time frame.

This bill came to the Economic Development, Science and Innovation Committee in November 2017. We had 257 submissions. There was quite a bit of interest in the country, and we had 31 submitters who came to the committee in Wellington to express their concerns, their thoughts, and their ideas on how to improve it. In fact, there was one group of people—let me just mention them briefly—who were very concerned about electromagnetic radiation, and we do hear this issue now and again, from time to time, regarding people’s concerns about microwaves. As a committee, we wanted to take every concern at face value and take these matters seriously; so we asked the Ministry of Health to come in and to brief us. They summarised their views to us orally and then we asked them to put it into writing, and that report is available on the website. They said this bill has no impact on exposure to wireless radiation. They said there are international standards that set limits for maximum exposure levels to radio waves, including the wireless radiation emitted through cellphone and wireless transmissions. These New Zealand exposure limits are consistent with the guidelines published by the International Commission on Non-Ionizing Radiation Protection, and New Zealand complies with these standards.

They went on to say that mobile network operators also commission independent monitoring of exposure levels and the Ministry of Health has advised that 5G networks will be subject to the same limits that New Zealand has currently, and they also advise that no cell site has failed independent monitoring tests. So I thought that would be interesting for listeners to hear tonight as we look at this bill, because that is a subject that, of course, gets a little bit of airtime, particularly on social media.

Coming to the bill, the bill will establish a new approach to telecommunications regulations, and that is so important because we are in this zone where we have a whole new network that has been laid out, rolled out, in play, and it’s getting very significant uptake. At the moment, 1.4 million households or end users are able to connect. And we are seeing the number of people who are actually doing the connections increasing exponentially.

And so we fully expect that over the next number of years people will migrate from their copper lines to ultra-fast or to fibre lines. With the fibre lines come so many more opportunities in which we can use technology, so there needs to be some understanding around that, some regulation around that. Some who have had what are probably best to be described as monopoly powers have wanted to enlarge their ability to build and to extend technology through the network that’s been established. You can understand that, because this network offers a platform for exciting innovation that is going to be very, very important—it already is, but it’s incredibly important for our next steps as an economy. It’s important to work our way through that.

One of the areas, if I can just touch on another couple of areas before my time finishes, and I think the Minister did touch on this, was the line of business restrictions. There have been in the past some restrictions constrained upon monopoly groups of people, and that is right throughout our economy in different areas. The Commerce Commission, of course, is the regulatory authority that looks at this. There was this line of business restrictions that I think became probably the most debated issue that came before the committee. It was very, very strongly felt on both sides. There were companies who saw the opportunities of how they could develop new innovative ideas, who had the capacity, who had the size, who wanted to step up into that space, and Chorus was one of those who wanted to do that. Then there were retailers who felt that they had the nimbleness to be able to innovate and felt that the market powers exercised by very strong companies would quench that innovation. And so it became quite a difficult situation.

So we decided—just in my last 30 seconds—as a committee that we would retain that line of business restrictions, but after the first regulated period, we would enable the Commerce Commission to do a case-by-case exception, when there is application and when we have bedded this down and seen how it works, to open up the possibilities that exist for New Zealand. I commend this bill to the House.

Thanks, Madam Deputy Speaker. I’d just like to begin my contribution with a quote from Vinton Cerf, who’s recognised as one of the founding fathers of the internet. He said, “The Internet is for everyone”, and this bill will help to ensure that this remains the case. It’s going to give certainty to the industry as well as protection to consumers—and that’s something that I particularly like about this bill: protecting the consumers. It’s going to give the Commerce Commission a greater oversight, which will actually increase transparency. We’ll have the ability to ensure that internet providers are going to be required to disclose information publicly, and I think that gives the public certainty to ensure that there’s nothing going on behind closed doors—that everything is out in the open and consumers can be informed and know what to expect. InternetNZ, in one of their submissions, said, “Our vision for New Zealand’s Internet market is one where competition, investment, and innovation deliver better opportunities for New Zealand. Our fibre network will soon reach 85% of New Zealanders, and we want to see its potential delivered. Beyond fibre, we want to see efficient investment and innovation to deliver better connectivity to all New Zealanders.”, and this is something that this bill will also allow.

I’d like to think about my background of owning a small business and being in a rural area. I think these sorts of things—having good quality connectivity and internet services—are hugely vital for our small businesses and in the rural community, and particularly when you get the two of those combined. In the space where my business is, we are communicating with parents and children all over the internet through connectivity. We are talking about the progress that children are making every day, allowing the parents to be able to contribute to their learning stories. It’s really important that we have that good, fast connectivity so that grandparents overseas can use the services as well that we provide. So I really like the fact that a lot of this bill focuses on the end consumer and that it’s meeting their needs and that they are better protected, and I commend this bill to the House.

It’s a great pleasure to rise to take a call on the Telecommunications (New Regulatory Framework) Amendment Bill, and I’d like to start by commending the Minister of Broadcasting, Communications and Digital Media, who actually spoke on the second reading. Considering the fact that he’s only recently just been given the portfolio, I thought he actually did a spectacular job of doing a 10-minute speech on a subject that he may not necessarily be familiar with. I have to actually say he probably was briefed really well by his officials. I’d also like to take this opportunity to thank the great chair that we have in the Economic Development, Science and Innovation Committee. I have to say that Mr Jonathan Young is probably a very open and generous chair who actually gives members on the committee a bit of a wide berth to have a free conversation about issues, and I thank him for his hard work.

I really don’t want to sort of get into the whole bill, because there was quite a large number of debates that actually happened during the select committee process. The bill sparked a huge amount of submissions, and, as the chair pointed out, we had a total of 257 written submissions, of which 37 were heard as oral submissions before the committee. I thank the secretariat for their due diligence in compiling and administrating the hearing processes, which is sometimes quite difficult to manage, with, you know, all the wishes of the submitters wanting to speak all at the same time.

I’ll also, perhaps, go into an area where something has actually come up after the fact of the select committee. I haven’t actually had an opportunity to have conversations with many of the members of the select committee, but if Minister Faafoi—I had a quick chat with him. I’d like to note that the Minister’s office hopefully will have actually advised and informed him in the changeover process that there have been some issues that were raised after the select committee process with the former Minister of Broadcasting, Communications and Digital Media, Clare Curran, and she was engaging directly with some of these stakeholders about this particular issue facing them: the LFCs, the local fibre companies in the private sector. This morning I lodged several parliamentary written questions around this particular issue over the definition of “fibre network”—in particular about access points as they relate to those who currently provide the fibre services to those who will be supplying future cell towers, perhaps, for the provision of wider mobile connectivity in our country.

The concerns these particular LFCs have are in relation to the use of the phrase “access point” in the definition within the legislation. The way it was actually drafted did not actually talk about access points. I think we were talking about “building”. You know, sometimes what happens with legislation when it actually goes a select committee, and the debates that actually happen over time, we sort of haven’t quite done the recall of specific discussions, but I remember the concerns that some of the select committee members actually had were that if the connection was being delivered to a particular building—let’s say for a farm, where the actual dwelling was quite a long way away from the actual road, for example. If the connection was only delivered to the building—it could be a shed—the people, who were actually living maybe a kilometre away, may not actually have the access to fibre. That was one of the discussions I think that we actually had.

The way it was actually developed through the select committee process was we’ve actually come up with a word in the report back, in the legislation, called “access points”. What that might inadvertently do is actually make local fibre companies provide fibre to actual cell towers, and that might actually, perhaps, impact on the business of the LFCs. These are some things that maybe the Minister should perhaps consider.

And I know that as members of the select committee, we never actually had an opportunity to discuss this with the officials, because it was never raised during the process of the select committee, because it wasn’t actually a concern at the time and nobody actually raised that with us. And perhaps, in the officials’ and the Minister’s consideration of the comments that are actually made by the LFCs, the Minister might consider and support a Supplementary Order Paper during the committee stages to make sure that we don’t actually have an inadvertent hindrance to the businesses going about in their business.

I guess I also wanted to talk about some concerns that some members of the public actually raised—and I think Jonathan Young actually stole my thunder when he talked about that—in terms of their concern about the 5G and the mobile network innovation and how the radio waves were going to be impacting on people’s health. One of the quotes that I actually remember from the Ministry of Health coming to the select committee and telling us is that the Ministry of Health meets every six months to access the latest information regarding health effects resulting from the exposure of radio waves and that the committee last held meetings in February of this year and the conclusion from their discussion was—I quote—“that there is nothing in the research which would indicate there is a need to change current policy on the health effects of radio waves.” That was the reassurance that we actually had from the Ministry of Health officials who actually came to our select committee to explain that, which was raised as a result of the submissions that were raised, which were not necessarily part of the scope of the bill but were, obviously, enough of a concern that many people actually wrote to us.

As the chair actually pointed out, there were two particular issues that were very prominent during the select committee discussions. One was in relation to the anchor products, and the other was in relation to the line of business restrictions, and the Minister has also actually addressed those issues.

In terms of the anchor products, I think most of us actually struggle with things like that. When somebody says “What is an anchor product?”, we go “What?” An anchor product is the very base product that a fibre company would actually deliver. It is the anchor service to ensure that voice and basic broadband services are available to consumers at a reasonable price and to provide an anchor on the prices and quality of service around other fibre products that are actually being offered. What the committee has heard—and it was actually quite pleasing to hear from some submitters who actually came from Australia, who were suggesting that New Zealand has such an amazing broadband service compared to our Australian neighbours. It was really pleasing to actually see. There were lots of recommendations as to whether we should have it lower or higher, and we actually came to an agreement as a committee that we would actually sit on an anchor product where we are looking at 100 megabits per second upload and 20 megabits per second download and a voice-only product as anchor products as a base, and that it should provide a price stability for consumers. I guess that actually indicates to the retail service providers that that is the price that they need to actually work with and that they have products around that they can actually offer to consumers.

The other issue, which both the Minister and the chair have actually dealt with, which was quite controversial, I guess—and we heard a lot of submissions and talk after the fact as well—was in terms of line of business restriction. You know, the local fibre companies and the wholesalers actually wanted the ability for them to innovate. They keep talking about innovation. But I guess there are other companies who are worried that that innovation might encroach into the retail area and that it might actually mean that the competition—that perhaps a bigger player like Chorus might encroach on some retailers, and that as a small company dealing with retail might not be able to compete against a big giant like Chorus, it was a concern.

I think I can understand Chorus’ perception and all the other fibre companies’ wishes to actually innovate, themselves, because they have new technology actually progressing at such a fast rate. But where we actually landed on was that the committee in fact decided that we will retain the existing line of business restrictions. But it doesn’t actually mean that they can’t innovate, because after the first sort of period, case by case will be provided so that they can—

I apologise to the member. Your time is expired.

Kia ora. Thank you, Madam Assistant Speaker. On behalf of New Zealand First, I rise to take a call on the Telecommunications (New Regulatory Framework) Amendment Bill. Can I just take us back to the first reading speech, actually, which was in the previous Parliament, and can I just talk about a piece that is inside the explanatory note: “In areas where fibre is available, Chorus will no longer be required to supply copper fixed line access services, or meet the obligations specified in the TSO instruments.”

Now, I understand that through the New Zealand First member of the Economic Development, Science and Innovation Committee, Clayton Mitchell, this was raised with the select committee at that time, and I just want to recap for the members of the public what the telecommunications service obligation (TSO) instruments are that are going to be removed under this piece of legislation.

So when Telecom was privatised in 1990, the Kiwishare obligations placed a number of requirements on Telecom in respect of a local Telecom service. In December 2001, these requirements were superseded in an enhanced form and became the TSO for local residential telephone service. The local TSO is primarily a consumer protection mechanism that ensures the availability and affordability of basic telecommunications services in New Zealand. The local service TSO ensures that the residential local telephone service is (1) available to residential customers throughout New Zealand, and (2) is available in rural areas at a price and quality comparable to the local service available in urban areas. The TSO deed further requires Telecom to offer residential customers the option of toll-free calling—e.g. Warkworth and Wellsford into Auckland—limit price rises in the standard residential line rental to no more than the rate of inflation; and enable residential customers to make emergency 111 calls.

That last one, of the TSO deed, is the one that New Zealand First asked for the select committee to address. As I say, in my understanding, from the member of the New Zealand First caucus who was on that select committee, it was raised with the select committee and a solution was provided by the officials at that time, which was that the answer was that those who could not or did not—who were going to have their home line switched to fibre would have to go and buy themselves a mobile phone and a battery pack. I just want to acknowledge the previous Minister of this bill, Clare Curran, and the current Minister of the bill, Kris Faafoi, for the collegial and consultative way that they have worked with New Zealand First around this particular issue. I cannot see inside the bill that has been reported back to the House from the select committee—I’m happy to be wrong, if a member of the select committee could stand and point me to that clause—any amendment that provides an alternative to fibre in a power cut to any vulnerable member of our community—e.g., the elderly or those who cannot afford a mobile phone or a battery pack. This is a transference of expense from what has been an obligation on a telecommunications company in this country to the consumer.

Now, I can see inside the bill that has been reported back to the House that the select committee has placed an obligation upon Chorus to inform the consumer that they will need to go and get a phone and a battery pack. That hardly addresses the issue of a transference of expense.

And so, again, I want to acknowledge the Minister—both the past Minister and the current Minister—for working with New Zealand First incredibly constructively to come up with a solution here. We will be bringing that solution to the committee of the whole House. I do have to articulate we’re disappointed that the select committee themselves was not able to amend the legislation to take into account those vulnerable New Zealanders, but we look forward to working with the Minister constructively at the committee of the whole House and making sure that rather than pass on this cost to the New Zealand consumer we make sure that they are acknowledged.

Thank you, Madam Assistant Speaker. It’s a pleasure to be taking a call tonight on the Telecommunications (New Regulatory Framework) Amendment Bill. I’d like to start by acknowledging the chair of the Economic Development, Science and Innovation Committee, Jonathan Young, for a very able chairmanship of that committee. We are a very hard-working and diligent committee. We sat for many hours considering this piece of legislation, and I think we’ve done a very good job. We do so in a very collegial manner on the committee and—I guess, the comments from Ms Martin aside—I think we all came to acceptance of this bill in its current form.

I do just want to cover off some of the submissions that were raised in relation to this bill. It’s fair to say that some of the submissions that came forward to us were fairly dry and some of them less so. The background to this legislation is a fairly long one. In the middle of 2016, the then communications Minister, Amy Adams, released the results of the telecommunications review and set out a new direction for regulating broadband and phone services. At the time, she said, “Digital technologies are transforming the way New Zealanders live, work and do business. To help reach our 2025 broadband target and to keep our economy growing, we need the right laws in place to make sure high quality and affordable communications services are available for consumers and businesses. The communications sector is vastly different to the market in 2001 when the Telecommunications Act was introduced, and it’s time for our laws to catch up.”

That new direction formed the final telecommunications reform package as it was announced by the then communications Minister, Simon Bridges, on 1 June 2017, and in August of that year this piece of legislation was introduced to Parliament. At the time, Minister Bridges noted, “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 rollout of world-leading communications infrastructure, with more to come.”

I would particularly like to congratulate both of those former Ministers, Simon Bridges and Amy Adams, today for the work that they did in bringing this very important piece of legislation to the House. They, effectively, did the hard work and the heavy lifting on this legislation and brought it forward to Parliament. I’d also like to acknowledge the current Minister, Kris Faafoi, on taking up the piece of legislation and progressing it through the House. I’d also like to acknowledge former Minister Clare Curran and thank her and her officials for the support that they provided the committee during our deliberations.

As has been said, our committee received 257 submissions from a range of companies, interested groups, and individuals. We heard from 31 of those in person or, in some cases, by phone, and we received, it’s fair to say, a fairly wide variety of feedback on the bill. We heard some very useful and substantial submissions from the likes of Chorus, who said that they support the policy aims of the bill, but they noted that the Telecommunications Act review started in 2013 and so they sought timely implementation of the new regime and made suggestions to support it. Those suggestions included that potential extensions to implement the model should be reduced from 24 months to six months. They also asked that, in the event of any extension, key elements of the regime, including the critical decisions that will determine the allowable revenue, the copper withdrawal code, and copper and telecommunications service obligations, should be in place by January 2020.

They also advocated very strongly for a flexible, technology-neutral, and durable regime which could adapt to changing technology and changing consumer demand. They also asked that the committee consider ensuring the regime continues to support geographic differentiation for initiatives like Gigatown. Gigatown is a subject that is fairly close to my heart as someone who now lives in Timaru. Of course, Timaru was, unfortunately, robbed, frankly, by the city of Dunedin when it came to which city would be given that. So I’m very happy to see that Chorus are keen to continue that differentiation, and I live in hope that Timaru, which I think was in second place to Dunedin, will be their next Gigatown. I’d also like to add that Chorus are very, very keen to see this legislation pass in a very expeditious manner.

Vodafone also submitted on the legislation to us, and they raised a number of substantial amendments to the bill to better realise the full potential of the Government’s ultra-fast broadband roll-out. We also had Spark submit on the legislation. They too offered a number of quite substantial suggestions including removing the proposed regulatory holiday for fibre access and backhaul services; removing Commerce Act ouster provisions for fibre anchor products; extending the purpose statement to allow the commission to consider all end-users’ interests, not just the interests of fibre customers; and, finally, removing the direction of the commission to add “prior losses” to the Chorus regulatory asset base.

I think, on the whole, the bill that we’ve brought back to Parliament from the select committee would satisfy most submitters—much more so than perhaps the bill that came to the committee—and so I thank the submitters for making their thoughts known. I accept, though, that some submitters will not be happy with the legislation that we’ve brought back. We did hear from a number of very interesting submitters, as has been said, from a number of individuals who are concerned about the health effects on the brain of 5G and increased prevalence or use of electromagnetic transmissions.

It’s fair to say that sometimes those discussions became fairly robust, but I’d just like to put on the record that all members of that select committee were very respectful in the way that they engaged with those submissions and, in particular, I’d again like to acknowledge Jonathan Young, who was unfailingly polite with all submitters during that process.

I do accept that some of the submitters will be unhappy with the decision that the committee came to, to recommend that the bill pass and, ultimately, I think, what will happen tonight with the passage through second reading. However, we did listen to them. As has been said, we sought advice from the Ministry of Health. They came back and, essentially, said that there was next to no risk with this legislation passing, in a health sense. That certainly satisfied for me the concerns that those submitters raised.

This is a good bill and, as others have outlined, we will be supporting it. The new regulatory regime enabled by this bill will modernise the Telecommunications Act so that it is fit for purpose for New Zealand’s 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. It builds on the very good work of the previous National Government in rolling out ultra-fast broadband to connect more New Zealanders with the rest of the country and with the rest of the world. I commend it to the House.

Kia ora, Madam Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. I’m just sitting here listening to the debate and reflecting on when I first entered Parliament and became the Greens’ ICT spokesperson. We still had a thing called Telecom, our internet was slow, we had things called data caps where if you went over a certain limit you had to pay extra. We had local loop unbundling; it happened a few years before under the Hon David Cunliffe, but still our internet was slow and unaffordable. We were down the international rankings.

But I’m trying to acknowledge both sides of the House. Think of what we’ve seen in progress over the last eight years. We’ve seen ultra-fast broadband rolled out to more than 75 percent of New Zealand homes—a massive Crown investment close to $2 billion. Telecom is no more; it’s been split into Chorus and Spark. And I think for me, it’s quite a telling sort of example, but any parent in this House or watching will know about the phenomenon that’s Fortnite. A couple of months ago, we demonstrated the resiliency and the effectiveness of our internet system in New Zealand. What we saw a couple of months ago when a Fortnite upgrade was released to the internet, we saw the most unprecedented highest amount of internet demand in our country’s history: 20 percent above normal. In fact, there were 30,000 gamers downloading it simultaneously while everyone else was downloading Netflix. In other countries their internet falls over, it slows down. In New Zealand we are able to resolve an unprecedented challenge.

So when you think what we’ve done over the last 10 years—it’s been building this network, the Ultra-fast Broadband Initiative and the Rural Broadband Initiative. What Parliament is doing tonight is turning to what’s next: how do we deal with a system which has been built with taxpayer contributions; significant private contributions, I’ll add as well. But what’s the appropriate regime? I’m glad to see unanimous support amongst the House for a regulatory regime built around the utility model, which is basically a regulated monopoly with an independent body, in our case the Commerce Commission in New Zealand, regulating it. I think we’ve seen widespread support from numerous players in the market, through to commentators, that this is the appropriate model for what’s next.

I want to thank the Economic Development, Science and Innovation Committee, thank the chair, and thank the submitters. I understand there were 257 submissions, 31 of them oral—many of them incredibly technical and multi-page; some of them, no doubt, written by lawyers. But I want to acknowledge the substantive work the committee did. This bill has been substantially improved. It’s important that it was improved, because what we are talking about is hundreds of millions of dollars of taxpayers’ money that’s going into it, and where money can be made on that Crown contribution, but, I think more importantly, the billions of dollars of New Zealand consumers’ money which is going into telecommunications in New Zealand.

I was really excited by this legislation because, having a wide interest in electricity market regulation, there are very close parallels with what’s happening with this Part 4 of the Commerce Commission - type utility model. Two, I think, quite fixed issues facing the committee were—in the electricity sector analogy, it is vertical integration, and the second was the regulated asset base, the RAB regulated under Part 4 of the Commerce Act. First was the line of business restrictions. Now, it was interesting hearing from officials that they hadn’t anticipated such widespread—quite frankly—opposition from retailers with the original legislation. Under the Telecommunications Act, line of business restrictions were established when Chorus was split from Telecom, basically saying that Chorus’ job was to focus on the wholesale market; they weren’t allowed to enter retail. The idea of the original incarnation of this legislation was to weaken or relax those business line restrictions. The theory, of course, is that you promote innovation and competition in those markets.

What we heard very clearly from retailers was that an impact of such a large, vertically integrated wholesaler-retailer, which is what Chorus would’ve become, would’ve been damaging to the market and damaging for consumers. So the business line restrictions have been retained in the legislation, but I think what we’ve tried to do is find that flexible approach, because there is a potential need for those restrictions to be eased in the future, and that’s why the committee has delegated to an independent body, the Commerce Commission, who I believe is best fit to make those decisions.

The analogy in the electricity sector, of course, is that our local lines monopolies, the distributors, are now getting into other markets such as battery services, demand response—would love to get into retail markets. But if those local monopolies become vertically integrated, they can exercise that market power but also—and this comes to the secondary major amendment in the legislation—can manipulate the market in such a sense that they can invest in assets, put it in their protected regulated asset base, and get a guaranteed rate of return based on the input methodologies of the Commerce Commission, which is acting in an uncompetitive fashion for other players in the market who can’t access those regulated asset bases and guaranteed rates of return. So I’m really glad that we saw those business lines restrictions. It’s a big deal when you’ve got 5G wireless coming. We want to see a thriving, innovative retail market in that area, not old-fashioned Telecom thinking, but I think we’ve found the balance quite right.

The second thing I was touching on was the regulated asset base, and this is important because of the significant Crown contribution. Now, the committee process was incredibly constructive—we worked together—but here I am going to make a political point, because in the original legislation there was absolutely no certainty or clarification or guidance for the Commerce Commission as they were going to go about deciding the input methodologies for Chorus’ asset base. Basically, what I’m saying is the previous Government’s given Chorus a ton of money and, in drafting this legislation didn’t tell the Commerce Commission how to approach that Crown contribution, which we know is close to $2 billion. This is why I’m saying it has tens of millions of dollars of impact for these companies, because if they could put the entirety of the Crown contribution into their regulated asset base, get a guaranteed rate of return on money that wasn’t theirs, that was the taxpayers’, that’s a huge wealth transfer from taxpayers to consumers.

So what the committee has gone and done is clarify the treatment of the Government’s contribution—this is new section 176(3A), inserted by clause 23. What the committee has agreed is that recovery can only be limited to actual costs. This is incredibly fair and reasonable. Chorus should not be able to recover the costs which weren’t a result of their investment. What the committee has decided is that it’s fair that they can recoup money from that base to pay back the Crown loan, but the Commerce Commission cannot presume a commercial interest rate on that theoretical—it was theoretical—case of an interest-bearing loan. This is incredibly important to provide certainty to consumers and the players in the market that we do have a fair, robust, and transparent system.

The analogy here in the electricity sector, of course, is: should these companies and lines monopolies investing in batteries be able to put it in their regulated asset base and get a guaranteed rate of return, stifling other competitors? We heard the analogy of, say, someone who’s wanting to underground a powerline, and there was a private contribution towards undergrounding that powerline—whether the lines company should be able to put that in their regulated asset base even though it was a third party who actually paid for it—and in the electricity sector, that isn’t the case. I’m readily running out of time, but these were the two areas that I was particularly focused on to make sure we got a fair suck of the sav for Kiwi consumers and a robust market going forward.

I want to touch on Tracey Martin’s point, which is Part 2AA, deregulating the copper market in specified fibre regions. Now, I understand the concerns, and we did hear them from a few submitters. The problem, or the concern, is that the country and consumers can’t afford to fund and maintain two totally separate networks when most—the vast majority of—consumers are using a fibre network. Paying for, and the maintenance costs of, an increasingly old and out-of-date and hardly used copper service is becoming increasingly unaffordable, and the country can’t afford to pay for two networks when there’s only an absolute minority using that old network. Now, I’ve been raising this issue with the previous Minister as well, and I understand there is need for amendments at the committee stage, because we do need to make sure those vulnerable consumers are protected.

The answer, of course, isn’t throwing, wasting, billions of dollars in keeping two different networks alive; it’s about protecting those vulnerable consumers, and I know the Minister has a great interest in that. So there is a code to protect them, but more work, I agree, needs to be done.

Other areas of the legislation that were improved were making sure that the Commerce Commission would have to make a decision based on the long-term interests of consumers. Previously, in the first iteration of this legislation, it was the long-term interests of fibre customers. Now, when you’ve got these questions of the copper network, wireless markets, it makes sense to have an integrated system where the Commerce Commission is actually looking at all consumers in the market. We’ve seen changes to information disclosure and, importantly for players in the market, some confidentiality requirements as these companies are providing information to the Commerce Commission. We are seeing, I guess, a pragmatic move in terms of a potential deferral for entry of the model if the Commerce Commission requests that the Minister—if they haven’t had enough time to develop those input methodologies, that they can ask for a two-year deferral. I hope that’s not the case. I think all participants in the market want to see certainty as soon as possible. A new levy’s been introduced, raising, I believe, $12 million for the Commerce Commission to undertake their work, and then, of course, anchor services.

But, all in all, this is good legislation, setting us up for the next few decades of the fibre network in New Zealand, and I’m glad that all parties have worked together to protect our consumers and make sure we’ve got a great, modern, fast fibre network.

This’ll be a bit of a test—thank you, Madam Assistant Speaker. Whether the last speaker, Gareth Hughes, knew what he was talking about or not, I’m not sure, but he certainly convinced me, and I thank him for his contribution, because I think it was a pretty good effort at summing up this legislation. It’s a pleasure for me to take a call on the Telecommunications (New Regulatory Framework) Amendment Bill in the second reading. I noted earlier the praise of the Minister for picking up this thing at such short notice. Well, he’s had a lot more notice than I have, and he had a much better speechwriter than I’ve got, but, none the less, I’ll do my best.

Interestingly, both Gareth Hughes and Tracey Martin touched on a subject that I want to mention a little later my contribution. This is an immensely complicated and challenging topic for New Zealand. The sector changes so quickly, and I think we’ve seen that in the last nine years with dramatic change in the way services are provided, the way we can access all this sort of thing—telecommunications and the like—and it certainly is a challenging task to regulate this in a manner that’s sustainable going forward. I want to talk about that a little bit later as well.

I find this whole area quite challenging, and I think it’s a really interesting area to get involved in. I myself live three kilometres from State Highway 1, have a copper network—it goes past my house. I have two fibre lines that go past my house—both Ministry of Defence lines, which we can’t access. Interestingly, my phone doesn’t work and nor does my internet, and because it’s so slow I don’t bother with it, as you can probably tell. That’s one of the challenges we have in rural New Zealand. The issue that I want to raise, which, partly, Tracey Martin touched on and so did Gareth Hughes, is that we can, with all the best intentions, put this sort of legislation in place, and often it’s the unknown that catches us, and it’s the unknown that trips up rural and isolated New Zealand.

I guess I got very nervous when I heard Gareth Hughes talking about the electricity industry and the legislation around that, because, in fact, that’s a good example of where we have, to some extent, tripped up in rural New Zealand as a result of legislation passed in the 1990s. So we can put this legislation in place with the best intention, but what the outcome of that will be in some parts of New Zealand is comparatively unknown. While I don’t have a great understanding of this, I do think there’s always that unknown risk. I suppose I’m only saying that because I want to say in a few years’ time, if it does come to pass, “I told you so.”

I want to touch on new Part 2AA, in clause 7, which is a new part that was put in place to deal with some of the challenges I’m talking about. It, effectively, gives the Commerce Commission responsibility for declaring which geographical areas become specified fibre areas where fibre fixed-line access services are available to end-users. The challenge with that is that this kind of legislation is all very well but I don’t know whether we always account for what goes on in our communities. That’s actually a hugely important thing for rural New Zealand particularly, for provincial New Zealand really, because the advent of these extraordinary telecommunications systems and connectivity is massively important for our ability to diversify in provincial and rural New Zealand. It not only enables our farming communities to diversify extensively and to use technologies that you wouldn’t have dreamt about some years ago but it also enables people to live in those areas and operate businesses from those areas that would have been unheard of some years ago. So it’s hugely important that we have regulation in place and legislation in place that enables those services to continue to be provided, and to be provided in a manner that is useful to those communities. I think that that’s the key factor we’ve got to deal with.

I was interested to note that this bill sets a date for this to be implemented—1 January 2020—but it provides for the Minister to delay it by up to two years if the commissioner requests it. How they decide whether it’s necessary to delay that or not, I don’t know. That’s, I guess, the challenge that I think I’m talking about, because I do think that there are some significant challenges in this stuff, and we have seen it with the electricity sector in rural provincial New Zealand. We’ve also seen it with this sector itself in rural provincial New Zealand as we’ve struggled to get connectivity. To be fair, it’s very expensive to get both the electricity and connectivity into some of those areas that I’m talking about, but, none the less, they are places that we want people to live, and we must enable them to live in those places. So I think that’s an important factor. We will never know whether we’re right or wrong, actually, but it is an interesting factor and one that I think is very important for the future. So, as I said, I can support the piece I understand about this bill, but it’s what we don’t understand that I think is, as I said, the important factor for us.

The other thing that this kind of connectivity and the provision of these services into the more remote parts of New Zealand does is enable us, because of the access provided by this type of thing, to use things that we would have never dreamt of, particularly with respect to the environmental challenges we face in all parts of rural New Zealand, the forestry challenges we face, and even things like mapping. I guess when you get to carbon credits, which are also a little bit telecommunications—a bit complicated for me—it enables us to measure that kind of thing remotely and very easily. Of course, satellites do that too. It also enables the users of those services to access that information very quickly. So whilst this bill, for me, is pretty complicated, I think that it’s certainly necessary. It’s difficult to understand whether we have it right or not, but it’s something that as a sector we must—from a Government perspective, or from a Parliament perspective—put in place.

I just want to comment briefly on the Ministers that have been involved in the time that I’ve been around this institution: firstly, Amy Adams, who did a lot of work on this sector; followed by our leader, Simon Bridges, who also put a lot of work into this sector—and, actually, both of them had to face quite a lot of flak from those rural MPs among us who are pestered by constituents for the lack of service, on frequent occasions. They were followed, of course, by the past two Ministers who dealt with this, including Clare Curran. A lot of work has been put into it, a lot of thought has been put into it, and no doubt a lot of work by the offices has been put into this, and I hope that from that perspective it works.

I was very interested in the comments around the health aspects of this, because it’s certainly not something that I would ever think about a lot, but I guess that people of my generation didn’t think about those sorts of things a lot anyway. We certainly weren’t intimidated by what the stuff going through the air might do to you; it was more what smoke and things like that might do to us that was intimidating, but certainly not the stuff that was going in your ear and coming out the other end. So I was fascinated by that discussion.

I probably don’t have a lot more useful contribution to make to this, but I do want to just reinforce the—

💬 Dan Bidois: Keep going. Come on—you’re doing a great job.

Shh! I don’t want you to listen either! I just want to reinforce the fact that I think that it’s the unknowns of these pieces of legislation that always challenge us in the future, and in my experience, from a rural New Zealand perspective, it’s almost always the rural sector that is challenged the most by what wasn’t foreseen at the time legislation was put in place.

So that’s my contribution to this bill. It’s not an area I have a lot of expertise in, but, none the less, I have a great deal of pleasure in supporting it as it progresses through the House.

I understand this is a split call; Dr Deborah Russell.

Tēnā koe e Te Māngai o Te Whare.

ASSISTANT SPEAKER (Poto Williams): Kia ora.

This is a complicated bill. It’s got a lot of technical detail in it, and, I think, for those of us who are perhaps not even familiar with the sector, it’s rather hard to understand what’s going on with it, so it does help to have an understanding of the telecommunications sector as to why we need this legislation.

What happens in this particular sector is we have four companies across the country, which have local monopolies—in the case of Chorus, it’s not exactly local; it kind of goes over most of the country. But they have monopolies on supplying ultra-fast broadband to their own areas. Where you have monopolies, you need regulation. We need regulation in order to ensure that the rights of the consumer are protected but in order to ensure also that the provider makes a reasonable profit. This is part of what this legislation sets out to do. It is trying to balance the rights of consumers with the needs of companies to make a decent return on what they’re doing.

So as the Minister took us through at the start of their speech, taking us through some of the really rather technical detail in here—almost as technical as a tax bill, and that’s saying a lot—when you spin it down, it’s down to some very basic things that this bill is doing. It is ensuring that fibre networks are rolled out across the country, but, at the same time, with protections for the rights of consumers, and that right across the country ultra-fast broadband providers will provide a basic service at a reasonable price so that everyone may access the internet and, in fact, may access ultra-fast broadband. It’s about deregulating the copper networks. We actually don’t really need those copper networks any more as long as we’ve got ultra-fast broadband there, so there is no need to regulate them any more.

So that’s what we’re trying to do there. It’s about boosting consumer protections to ensure that ordinary consumers don’t have to pay too much for their ultra-fast broadband, because monopoly providers can charge high prices if they want to. Right along with those consumer protections are the needs for protecting vulnerable consumers, as well. May I suggest to the previous speaker, Mr McKelvie—who, quite rightly, is concerned for his rural constituents—that our other concern needs to be for low-income people, who also need to access the internet.

I just want to speak a little bit to that. The internet is ubiquitous now. It is part of our lives. It is as much essential to modern living as the water networks, the stormwater networks, and the electricity networks. That’s why we do need to regulate it, and that’s what this bill does. It’s an excellent bill, put together by a series of Ministers. I commend this bill to the House.

It’s my pleasure to take this split call on the Telecommunications (New Regulatory Framework) Amendment Bill. I do so because what this bill actually says is that it brings into play a change in the system from 2020 or, if the Commerce Commission agrees, in 2022.

Ultra-fast broadband (UFB) and fibre is the next wave of technological advancement for New Zealand, and the last National Government spent about $2 billion rolling it out in a leading-edge way across New Zealand. I heard a previous speaker talk about the fact that our broadband speeds are higher than Australia’s. In fact, in most countries I’ve travelled to, our broadband speeds are higher in New Zealand than in most other comparable countries. We’re in a very good space, and it enables a whole raft of technology to be rolled out in New Zealand in homes, businesses, factories, workplaces, and for recreation; so it is important that we have a regulatory framework that is new and modern and updated, particularly now that we have 1.4 million people with connections and, as I’ve said, the previous Government spent around $2 billion on rolling that out across New Zealand.

The Economic Development, Science and Innovation Committee—even though I wasn’t part of it at the time—did a really good job, in my view. It had 257 submissions and about 31 oral submissions. They did a really good job, and I do want to compliment and acknowledge the Hon Kris Faafoi for picking this up and outlining to the House in his speech what it was about from the Government’s perspective.

I do also want to acknowledge the limitations in this bill that have been placed on Chorus. For listeners who may be listening at this time of night, effectively, what the select committee considered was whether, in fact, Chorus would have a monopolistic advantage over other players in the market if it was allowed to get into the retail space. The select committee was persuaded that it did and, therefore, it made some rules and regulations to protect that from being exploited.

This really is about making sure that there is a level of minimum standard and commitment for UFB in parts of New Zealand and, where that doesn’t exist, a requirement to continue to provide copper-based technology. When the Hon Simon Bridges announced this in June of 2017, it was very much about making a fit for purpose framework.

I want to particularly go to new sections 69AA and 69AC, in clause 7 in the bill, which are specifically around specified fibre areas. The main point for me is that “The Commission must, before the implementation date and at least annually thereafter, carry out an assessment to determine the geographic areas in which fibre fixed line access services are available to end-users.” In other words, that assessment needs to be made before you can roll out to new section 69AC, which allows people to withdraw copper from those same areas. In other words, if you have fibre in an area, under this provision, copper can be removed, and it’s pretty clearly spelt out. But I want to reiterate and repeat something that my learned colleague before me, Mr Ian McKelvie, said: it is really hard to understand the unintended consequences in this space.

I refer to an article from Mr Pattrick Smellie on 7 December 2017, where he talked about the 5G network and the requirement to look at the 5G network—which pretty much means there’s thousands of new cell sites in New Zealand that need to be rolled out—and how that needs to be done. That is a new change.

I also acknowledge the Hon Tracey Martin and Mr McKelvie. I think the committee of the whole House does have a role to make sure that vulnerable people and low-income people who actually can’t afford UFB to the house—it might be going past their door—still have access to basic phone services, because older people and vulnerable people who are not yet connected to UFB don’t understand what a modem is, let alone what to do if it goes wrong, and actually need to be looked after.

So I look forward to the committee of the whole House, and I think there’s a lot of ground we can do as a Parliament and a lot of things we can do to make this bill better in that process. I commend the bill to the House.

I’m very happy to come to this telecommunications amendment bill, and, looking back on the first reading of this bill, it was, in fact, one of the last debates the previous Parliament held, back in August of last year. Members might like to refer to speech number six in that debate, which I thought was especially good.

💬 Hon Ruth Dyson: Whose was it?

It just wouldn’t be modest of me to say, Ruth Dyson.

I want to refer to—firstly, actually, what I wanted to do is acknowledge and thank the Economic Development, Science and Innovation Committee for their work on this bill, because when one looks at the changes that have been made to the substance of the bill in that process, the select committee has done its job. It was clearly a bill that had broad support across both sides of the House, and the select committee has assiduously worked through some of the technical and other issues that do arise during these processes. It’s made important changes to things like the definition of “telecommunication” and the definition of “fibre network” to make sure that they are flexible in what is a fast-moving technological environment.

But what I just really want to turn to, in what’s going to be a reasonably brief call, is the fundamental purpose of this bill. This is actually really important, because what we are talking about here are services that are monopoly or near-monopoly services, and it is the duty of this House to protect consumers with good regulation, in my view, where that situation applies.

In respect of this, there was a very good quote from the head of InternetNZ, Jordan Carter, in the consultation phase of this bill, and here’s what Jordan Carter said. He 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 [up] 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.”

That is, fundamentally, what this bill is about: ensuring that we have the appropriate regulatory controls in place by way of price equality, by way of information disclosure, and by way of a range of other mechanisms to ensure that these companies, which are monopolies or near-monopolies, give Kiwi consumers a fair deal in what really is a utility in our modern life. I commend this bill to the House for reaching those objectives. Thank you, Madam Assistant Speaker.

It is a pleasure to be able to speak here at the second reading of the Telecommunications (New Regulatory Framework) Amendment Bill. This was, of course, introduced by the Hon Simon Bridges last year in the previous National Government and it carries on with widespread support across the House, and National supports the bill. The new regulatory framework enabled by this bill will modernise the Telecommunications Act so that it’s fit for purpose for New Zealand’s new fibre-focused telecommunications environment. It will put in place incentives so that ongoing investment by network providers will continue to be encouraged, while consumers are looked after. It will also create a more predictable telecommunications environment, target regulation more effectively, and support consumers.

The work began during the last Parliament and we made good progress. I do want to thank the Economic Development, Science and Innovation Committee, of which I am currently now a member, that worked their way through it, but also the many submitters who went through the detailed areas of this bill and made some suggestions, and the committee made some changes in relation to them. But before I go into that detail I just want to put this bill within the broader context of the economic development strategy that the previous Government brought to the table. It was all about trying to build a more competitive and productive economy here for New Zealand so that New Zealanders can have access to higher incomes and greater opportunities. When we broke down that challenge—how do you actually create a more productive and competitive economy—well, there were six areas that we looked at. One was increasing the flow of investment into New Zealand, because, ultimately, you only get jobs and opportunities for New Zealanders if somebody somewhere decides to invest an extra dollar into starting a new business, hiring a new person, taking a risk, and getting into business.

We were very concerned to increase the flow of capital into New Zealand both through domestic savings but also with open markets and open trusted markets, well-regulated markets, and so the work of the Financial Markets Authority and the Commerce Commission are an important part of that. Then we also focused on expanding our export markets, and we see this Government is continuing the efforts there in terms of free-trade agreements with the EU and in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). We then focused on continuing to invest in the science and innovation space, with $1.6 billion a year invested, so that New Zealand businesses have access to a strong knowledge and science backdrop, and the ultra-fast broadband (UFB) that the previous Government invested around $2 billion in rolling out across the country is a very important enabler of that science and innovation framework.

Businesses also need access to a skilled and willing workforce, and all MPs in this House who are out and about in the countryside and in the cities of this country are talking to businesses which are employing people, and the cry that you hear most often is “We struggle to find and we need to find more skilled workers.” Having a good effective schooling system and production of skills coming through the polytechs and university sector is important. That’s why it’s so frustrating that we are seeing $2.8 billion wasted on free tertiary fees.

Finally, there is the area of the access to good quality infrastructure. Often when people think of infrastructure, they think of roads and they think of rail, but, actually, one of the most significant pieces of infrastructure put into this country in the past few years has been the rollout of ultra-fast broadband by the previous Government, and it continues. As a result of that, New Zealand is very well placed in terms of access. Now, it doesn’t just mean that we can watch Netflix and Lightbox and YouTube more quickly—although, that is a happy outcome of this investment. It also enables New Zealanders to be connected—fundamentally faster and much, much more powerfully—with the rest of the world, and so for a little country in a remote part of the South Pacific we have a golden opportunity to connect.

Now, of course, it wasn’t just the Government investment in ultra-fast broadband that put us in such a good position as we are today. There has been massive ongoing private sector investment right across the telecommunications sector, whether it’s been through the roll-out and maintenance of the copper network, but also through the many cellphone towers and the great 4G capacity that we have in wide areas of New Zealand. In fact, any New Zealander travelling overseas can see the very poor quality of the mobile networks in many countries that are much more densely occupied, even in the UK, for example. It’s amazing what we have managed to achieve in this sparsely populated country in New Zealand in terms of the quality of our network.

Part of that, of course, ongoing private sector investment in the telecommunications framework has rested on the predictable regulatory environment that we demonstrated over nine years. I suppose it is a point worth making that that predictability and soundness in the regulatory and Government decision-making has been shaken to its very core by this Government in its first 10 months with the way that it went about the oil and gas decision, for example, with no evidence, no analysis, and no Cabinet process.

💬 Hon Tracey Martin: Unbundling fibre; turning off copper—anything to do with the bill?

And so you have—yeah, well, it is highly relevant because if you want to see investment underpinning what this bill is all about in the telecommunications network, the sorts of things that this Government does every day in other areas shakes that predictability and that confidence that investors have, and so that is a point that’s worth making. It’s also a point worth making that a lot of the investment that’s gone on in this sector has been from capital imported to this country from overseas. The highly restrictive overseas investment rules that this Government has also brought in—

ASSISTANT SPEAKER (Poto Williams): I think that’s far enough away from the bill to pull the member back. Thank you.

And so, well, these are—thank you, Madam Assistant Speaker, for your forbearance. But these are broader issues that we need to consider when we’re thinking about just how we got to this situation here where we have such a strong, competitive, and successful telecommunications sector. And this bill is about ensuring that we continue to see investment in this sector with a clear, well-thought-through regulatory framework.

Just in terms of—before I wrap up—some of the amendments made during the select committee stage, I think the point that I would draw attention to was, I suppose, the more controversial element or the point of greatest debate. It was around Chorus’ activities, in terms of getting into retail activities. There had been restrictions on Chorus’ involvement in retail activities. The bill, which we introduced in the previous Parliament, would have removed two of those restrictions—on Chorus providing sophisticated wholesale services, known as above - layer 2 services, and I’m not going to go into the details of all that, but also restrictions on Chorus linking its wholesale service imports together to provide an end-to-end service which resembles a retail product.

After a lot of consideration and a lot of feedback backwards and forwards across many submitters, the committee, on balance, considered that actually the potential benefits in terms of innovation and efficiency, which is what we were looking for, were actually outweighed by potential disadvantages from changing Chorus’ commercial incentives. So we have recommended retaining the existing line of business restrictions, but also giving the Commerce Commission the ability to provide exemptions for particular services on a case by case basis.

So that’s obviously one of the detailed changes that have come through the select committee process. But, on balance, this National Party continues to support this bill, and we think it will actually continue to create what we think—to get that balance of incentives right so that there is ongoing investment in the network providers to continue to be encouraged while consumers are protected. I finish by just making that point: please, Government, don’t underestimate the importance of having a strong, stable, and predictable regulatory framework, and don’t fall into the habit of doing decisions—

I apologise to the member. Your time has expired.

Thank you, Madam Assistant Speaker. I rise to take the final call on the second reading of this Telecommunications (New Regulatory Framework) Amendment Bill. As a member of the Economic Development, Science and Innovation Committee, my colleague here was not wrong in saying that this is a very technical bill. I’ve got to say it was the first time I’ve sat in a room and talked to people about line of business restrictions, anchor services, and electromagnetic hypersensitivity, but there’s a first time for everything and I had my time.

💬 Hon Tracey Martin: Oh, you’re just new yet.

Ha, ha! Yes, I am.

We got to sit there and listen to the many submissions—the people that came forward with all of their doubts and their concerns. There are a couple of things that I wanted to talk about in my very short submission. It was just about the deregulation of the copper line services. There was a lot of alarm amongst some of our submitters about what that would do—you take away the copper lines and it means that our airwaves will be filled with radiation and lots of harmful things. I’ve got a stack of submissions from people who submitted about that very point. To that, I assure them that we took it very seriously—their concerns around this.

To those people that submitted on that and are listening to this tonight, I want to reassure them that the Ministry of Health ticked it off. They said that the bill has no impact on exposure to wireless radiation under international standards that set limits for maximum exposure levels to radio waves, including the wireless radiation emitted through cellphones and wireless transmissions. That gave me a bit of certainty, so I can tell those people that submitted that, actually, we’ve got your back. The Ministry of Health actually came and gave us that information, and it was very welcome, in fact.

This is a very good piece of legislation. Look, I commend this bill to the House.

Bill read a second time.