Telecommunications (New Regulatory Framework) Amendment Bill

This is an important piece of legislation that supports the ongoing development of our communications infrastructure here in New Zealand, which has done so well over a number of years in terms of the ultra-fast broadband roll out through the country that’s seen New Zealand being one of the top countries in the world, in fact.

This is a very important piece of legislation, as I said. The consultation around this development of the new regulatory framework was a consultation process that was undertaken between 2015 and 2017. Essentially, it’s about the transition between the copper network and the ultra-fast broadband or the fibre network. Its intention is to remove the regulation of copper lines where fibre is available and to streamline regulatory processes to enable a rapid response to competition issues and problems, particularly in the mobile communications market. That market, of course, is moving so quickly.

The Economic Development, Science and Innovation Committee reported back with the bill, and then on 16 October we received a Supplementary Order Paper (SOP) 118 from the honourable Minister, Kris Faafoi, which we are also taking into consideration. Part 1, of course, is informed by this new Supplementary Order Paper. There are many aspects to consider in this. For example, in Part 1, clause 4A, this clause replaces section 6 with a new section clarifying how publication of public notice on the Commerce Commission website and in the New Zealand Gazette should take place. Effectively, the new section would make it so that a summary of the matter required to be published needs to be included in the New Zealand Gazette rather than the whole document. That’s a good question that perhaps the Minister could consider: why does the Minister, or perhaps his officials, feel that only a summary of public notice issues under the Telecommunications Act 2001 should be published in the New Zealand Gazette rather than the whole documentation? Certainly it’s not a matter of saving trees. It’s a matter of information being available to people.

Will such a summary of a public notice, issued under the Telecommunications Act 2001, include a web address to where the full documentation can be located in hard copy and not just via the internet? Certainly I think that is something which people would be interested to know. People do want full documentation. These documentations, of course, are very technical and very detailed. They mean a tremendous amount, and rather than just the headline sections, people want to have access to the finer points. As people always say, the devil is in the detail, so having access to that detail is incredibly important.

I know we live in a society where we just go from headline to headline these days, but when it comes to telecommunications and regulation—especially around the areas of competition—it’s very, very important for people to understand the detail. Perhaps the Minister can illuminate us more clearly on the rationale and the reasons why these decisions have been made.

So in regards to the proposed subsection 6(3), if a public notice is dated and issued solely on the Commerce Commission website and not in the Gazette, will the Government consider this the relevant date of public notice? If not, we’d like to have a really good explanation from the Minister.

So here we have, in this bill, a really important piece of legislation that will put in place a balance of incentives so that ongoing investment by the network providers will continue to be encouraged, while consumers will continue to have services that are affordable delivered to them. Of course, seeking the balance between affordability of service and a return on investment—especially in a monopolistic or quasi-monopolistic situation—is the work of the Commerce Commission that we want to see continue in a very effective way.

This work is supported by National. It was begun by National during the last Parliament—[Time expired]

Kia ora, Mr Chair. Thank you very much. I rise to take a call on behalf of New Zealand First on the Telecommunications (New Regulatory Framework) Amendment Bill—just a quick call, really, about new section 232A, inserted by Supplementary Order Paper 118. When I took the first call on this bill under the previous Parliament and drew the Parliament’s attention to the removal of any obligation by Chorus in the unbundling of the bitstream access and the unbundling of the copper low-frequency service—so the removal of the requirement for them to meet their obligations specified in the telecommunications service obligation (TSO) instructions. At that time, there was no other description of what the TSO instruments were. So I went away to have a look inside another piece of legislation, which highlighted the fact, and I made the point, that the TSO is primarily a consumer protection mechanism that ensures the availability and affordability of basic communications services in New Zealand, and one of those is the Kiwi share or the 111 calling ability.

Now, when we decide to—and we have; we’ve moved on. It is a new time, a new day, and we’re basically moving away from the copper network. What this does is, of course, make certain of our citizens vulnerable to having a lack of communication available to them to call 111 emergency services, should there be a power outage. I understand it was discussed by the Economic Development, Science and Innovation Committee, but no amendment was made to the original piece of legislation.

So I want to commend Minister Faafoi and thank him very much for, in Supplementary Order Paper 118, that he has on the Table there, inserting new section 232A into clause 33—

💬 Hon Mark Mitchell: You should be in Cabinet.

—“to require the Commission to make”—this was in the previous Parliament, sir, so I wasn’t in that Cabinet; you were—“a Commission 111 contact code (the code). The purpose of the code is to ensure that in the event of a power failure, vulnerable consumers have reasonable access to a means to contact the 111 emergency services.”

So, as I say, we’re particularly pleased that the Minister in the chair has picked up on this very important issue for what, particularly in my area—I know I’ve been contacted by local residents, particularly in the elderly area, who don’t always have a mobile phone or credit, etc. The select committee decided that the cost of this change could be passed on to the consumer. That wasn’t appropriate, from a New Zealand First perspective, so we worked collegially and constructively with the Minister in the chair to make sure that there has been this section where there is a responsibility on the telecommunications companies to identify vulnerable consumers and to supply them “with an appropriate means for contacting the 111 emergency services that can be operated for a specified minimum period in the event of a power failure.” We think that this now addresses the concerns that we raised, and we want to acknowledge the Minister for doing so.

Thank you, Mr Chair. Thank you for the opportunity to speak. I will see if I can actually get to five minutes, plus one, considering the fact that I think I had one minute left in the previous session when we started discussing the issue. I’d like to acknowledge the Minister in the chair, Kris Faafoi, and now that he’s actually there he may possibly be able to answer some of the questions that I did pose in relation to the concerns that were raised by the local fibre companies (LFCs) in terms of the definition about access points. If I could remind the Minister, the concern was that although the bill doesn’t actually change the contractual obligation with the Crown, they believe that perhaps the regulatory regime as set up in 2011, relative to the contractual scope with the Crown, has actually changed by adding the words “access point”—so if the Minister could possibly explain that. In terms of the consultation process that perhaps went on in relation to the concern that the LFCs have, it would be very good if the Minister could explain that.

Just in terms of the comment that the previous speaker made in regards to the commission 111 contact code—nobody, I don’t think, in this Chamber, would not be actually concerned about vulnerable customers, vulnerable people in our society, if they’re not able to contact 111 for emergencies and whatever. I think we are all concerned about people, and I think we would want to make sure that vulnerable customers are looked after.

Having said that, I’m wondering if I could ask the Minister what consultation the Minister or his officials actually undertook with industry stakeholders regarding the feasibility of the proposed commission 111 contact code as outlined in new section 232A, in new Part 7—inserted by clause 33—as set out on Supplementary Order Paper 118. I guess one of the reasons is that although Ms Tracey Martin mentioned about the copper withdrawal and how vulnerable people are concerned that it is, in fact, the copper—well, actually, it’s not the copper or fibre. It’s not the issue of fibre that is actually of concern; it’s the electronics in our new telecommunications devices. Most people say, “Well, without copper we can’t have a landline.” Well, actually, you do. You have a landline; it’s just that modern electronics means that often these telephones rely on power and battery.

By the Minister adding this particular bit in relation to the 111 code and perhaps putting an extra burden on the supplier, I’m just wondering what kind of reaction he might have had from the industry, because it would mean that the industry is actually burdened with the cost of providing, perhaps, a different method of electronics for telephones or battery chargers or whatever it is. But I’m just wondering why we are legislating for something that—it’s not the legislation that is actually changing the issue for these people. I mean, you know, there are people who are concerned, and we have actually had, in the select committee, submissions from concerned people who said that the copper withdrawal actually means that they have health concerns. The mobile cell towers—they have health concerns. But we have allayed their concerns by getting advice from the Ministry of Health, suggesting that they don’t have to worry about that. But if the Minister could possibly answer some of these questions it would be really good.

Also, what indicative costs for the telecommunications industry have been given to the Minister in regard to the administration of the code proposed in the new part? I believe it would be quite a lot, and what definition does he have for “vulnerable people”? Who are these vulnerable people, and how many people are we actually talking about, and how much is it actually going to cost these telcos, and what does it actually mean in terms of the costs that they would probably recover from customers who use these services? I think these are some of the issues that we probably will need to get some explanation for.

In regards to the 111 thing, the contact code, it also says it will require the providers of those services to supply vulnerable customers at no cost to the consumer. As I said earlier, there will be a cost. It will be a cost to telcos, and, ultimately, telcos are not going to do it for nothing. It would probably mean that the customers will eventually have to pay, and I would like to hear the Minister’s rationale in actually putting this to the committee for us to debate today.

Obviously, there are other clauses in Part 1 that I’d like to discuss as well—[Bell rung]—but maybe I might give some other members an opportunity to speak. Nobody is actually standing up, so maybe I’ll continue if the—

CHAIRPERSON (Adrian Rurawhe): If you want another call. Are you seeking another call?

Yes I would, sir.

CHAIRPERSON (Adrian Rurawhe): I call Melissa Lee.

Thank you very much. My learned colleague on my right, Jonathan Young, actually talked about—

💬 Hon Scott Simpson: Very learned.

Ha, ha! He’s very good at what he does. He’s a great chair. He talked about some of the issues. Clause 4A, in Part 1, replaces section 6 with a new section clarifying how publication of public notices on the Commerce Commission website and in the New Zealand Gazette should actually take place. I mean, that is also slightly concerning. I thought the Gazette was actually something to let the public know what we’ve actually decided and that it actually lists everything that we’ve done, and the full detail should be listed and gazetted. But it seems that what this new section actually does is, effectively, make it so that only a summary of the matter required to be published needs to be included in the New Zealand Gazette rather than the whole document.

I’m just a little bit baffled. I mean, is this the new way? Is this the new style of things that are gazetted? I’m not so sure. I haven’t really paid too much attention to this, but perhaps the Minister could actually explain why the Minister and his officials feel that only a summary of a public notice issued under the Telecommunications Act of 2001 should be published in the New Zealand Gazette rather than the whole document. Yes, as I said, I’m a little bit baffled. Will such a summary of the public notice issued under the Telecommunications Act 2001 include an address to where the full document can be located in hard copy, not just via the internet? If not, why not?

In regard to the proposed new section 6(3), if a public notice is actually dated and issued solely on the Commerce Commission website and not in the Gazette, will the Government consider this the relevant date of public notice? If not, why not? Perhaps they could actually answer that as well.

There is also, in clause 7, an amendment to allow for the operation of fibre fixed line access services and, a new phrase: specified fibre service. There is actually a whole raft of things. I guess one of the biggest questions I have is that often in this House we work collaboratively together, and when I came into the Chamber to debate this particular bill in the committee stage, that’s when I noticed the huge Supplementary Order Paper (SOP) 118, which actually impacts on virtually all our clauses. It was the next day that the actual SOP was delivered to my office. I wonder what kind of consultation the Minister has actually had terms of the SOP, because it seems that some of the stakeholders were rather surprised at some of the issues that the new SOP creates for them; whether it’s actually the local fibre companies or the telcos.

But considering the fact that we are supporting the bill and the fact that the industry is rather eager to get on with this, I’m not interested in delaying this a long time. Having said that, there are issues that I have actually raised during this debate, and I’m sure that there will be other members who will actually raise some of their concerns and it will be much appreciated if the Minister could actually answer some of the questions.

Also, in terms of the suggestion regarding the 111, which I raised earlier, what specific class of persons have officials indicated to the Minister that they consider a vulnerable person? I was looking for the definition. I know that in the SOP it actually says they might have a potential to be vulnerable. What does that actually mean? Does that mean that if a certain person is older than us, they physically have to have a medical condition to be classed as a vulnerable person under this part? Or does it mean that just because I run the risk of—

💬 Hon Scott Simpson: Who knows?

Who knows. I’m just a little bit baffled. Some clarification would be much appreciated, sir.

Thank you, Mr Chair. Can I thank the member for some excellent questions during her contribution, and also the Hon Tracey Martin. I think I’ll start with new section 232A in clause 33, which goes to the 111 provisions in Part 1.

For those who might be listening at home, as the roll-out of fibre extends out to New Zealand—I think we’re at about 73 percent of New Zealand now has access to fibre—the old copper network that we relied on for our phones is becoming increasingly redundant, and in some cases that copper network might go. So, as Melissa Lee pointed out, phone lines that have relied on the copper network in the past and have worked even when there was a power outage—if they are taken away and the only ability that you have for your phone connection is your fibre connection and there is a power outage, in plain English, your phone will not work. In instances where people might be vulnerable consumers, ensuring that they have the ability to call 111 in emergencies is extremely important, which is why we saw fit to include this provision in this bill in Part 1, ensuring that vulnerable consumers are looked after.

Directly to the question that Melissa Lee posed, she can find the answer to her question about some guidance as to who a vulnerable consumer is on page 7 of the explanatory note of Supplementary Order Paper 118, where it is described as someone who “is at a particular risk of requiring the 111 emergency service (for example, due to a known medical condition); and does not have the means for contacting the 111 emergency service that can be operated for the specified minimum period in the event of a power failure.”

I think the most obvious example of this might have been 10 or 15 or even 20 years ago when I think there was Mrs Muliaga in South Auckland, when her power was cut off and her ability to use some pretty critical equipment for her to keep her healthy, obviously, no longer was able to operate. Officials have told us that in an electricity sense, there are 20,000 vulnerable consumers who would put themselves in that group. That would obviously be different for those who might not have the ability to have a calling capability, if they only had a fibre connection at home and therefore in a power outage would have no phone.

We think it’s extremely important to ensure that they do have the capability to call 111 if they are vulnerable. If there is an emergency, it’d be a pretty awful day if that kind of story hit the headlines. We need to make sure we look after those vulnerable consumers. So within the piece of legislation, there is a responsibility on the telcos to ensure that in the event of a power outage, there is a battery backup capability to ensure that the phone service will work and also, possibly, a mobile phone.

I will talk directly to the member who asked a question about reaction from the telcos to that. I would think it would be fairly classified as mixed. Obviously, there’s going to be costs for them. There’s a range in terms of what the officials think that may cost, from the hundred thousands to low millions. But there were some companies that, I think, responded responsibly and knew that making sure that there was a 111 service available to all consumers, especially vulnerable consumers, was something that they could obviously see the benefit of, to make sure they could call the emergency services if need be. So, as has been pointed out, there is a new part in clause 33 which requires the Commerce Commission to ensure there is a code in and around the transfer to a fibre-only situation.

So that 111 service will be provided by the telcos. It will be via either a battery backup or a mobile phone at this stage. There could be other creative ways that the telcos could do that in the future. I think that is a good change to ensure those vulnerable consumers, who might have a fibre-only situation and no access to a copper phone—which, again, works when there is a power outage—can call those 111 emergency services.

The question was put that the amendment set out on Supplementary Order Paper 118 in the name of Hon Kris Faafoi to Part 1 be agreed to.

Amendment agreed to.

Part 1 as amended agreed to.

Part 2 Amendments related to fibre fixed line access services