Hide Rodney: Telecommunications Amendment Bill — Second Reading In Committee Third Reading 
Hide Rodney: Telecommunications Amendment Bill — Second Reading In Committee Third Reading 
[Volume:636;Page:7143] 
RODNEY HIDE (Leader—ACT) 
: 
 I fear that the ACT party is rising here in the spirit of Christmas and is going to strike something of a bum note. I hear the National Party United Future the Maori Party the Greens Labour and New Zealand First all happily agreeing to this bill yet here we are a party of just two MPs and we are opposed totally to it. I hope that in the time I have available I can persuade others to join with me in voting against this bill to defeat it. I consider it to be a terrible mistake. 
I always remember when I was studying competition policy and economics at Montana State University under Professor Ron Johnson and having explained to me what “blackboard economics” was. It is the idea that we can always pull out a blackboard and come up with an ideal answer to any real world situation that is so much better. We can prove to our own satisfaction for example that if we had just one manufacturer of cars in the world and it made no changes did not compete with anyone and just brought out a new car as technology advanced every 5 years we would gain huge economies of scale because we would have one company producing the cars for all the world. The manufacturer would not have to compete or spend any money on advertising and it would not have to be constantly updating new models and trying to sell them to us because every 5 years it would just bring out a new sedan a new station wagon and a new four-wheel drive. In fact we can prove to ourselves that if that manufacturer did that it could produce a car for just $3000— 
Dr the Hon Lockwood Smith 
: Like a Lada. 
RODNEY HIDE 
:—which would be a tremendous achievement; it just requires the Government to regulate and control the economy. Of course we know that when that happens—and I heard Dr Lockwood Smith call it out—we actually get a Trabant. 
So that is what happens when we go from the blackboard to the real world and this is what so deeply troubles me about this legislation. I have heard MPs saying that telecommunications is a fast-moving industry and that it is so complex that they could not understand the wiring diagram etc. Then they sat around in a committee and decided to order the largest publicly listed company in New Zealand to split operationally as though MPs know best how to run that business. I have heard MPs here today saying that this will be good for Telecom because it will be able to compete in the wholesale market and it will be a good deal for the company. I am afraid that I do not share that optimism. 
The ACT party opposes this bill for the same reason we opposed the Foreshore and Seabed Bill. When members look at legislation like this they should always remind themselves of the principles behind it. I have to say that ACT’s opposition to the Foreshore and Seabed Bill was deeply unpopular with its supporters. I am sure that I am out of step with the vast majority of New Zealanders on this Telecommunications Amendment Bill because everyone wants to sock it to Telecom. We heard from Mr Flavell that his daughter’s phone bill was so high that we should sock it to Telecom. He said that Telecom New Zealand’s prices are high compared with phone charges in other OECD countries so we should sock it to Telecom. But members should understand that this House is doing exactly the same thing with this legislation that it did with the Foreshore and Seabed Bill—we are pinching people’s rights. We are opposing the legal process and that has to be wrong. 
I would beg Mr Flavell not to go down the route that he was advocating in respect of Econet because the idea there is that Vodafone has a monopoly in the mobile network and Econet should be able to piggyback on the back of that. Well I say “No” to that for the same reason that I opposed the Foreshore and Seabed Bill. 
I heard Dr Lockwood Smith say that the Government did not handle it very well because there was a leak. The Government could not stop someone from leaking information on that policy because it was breaking all the rules—one man leaked it. Actually it was not the leak that wiped $2 billion off the value of Telecom shares; there had been lots of leaks and they had not affected Telecom. What wiped $2 billion from the value of Telecom shares was the policy. All that happened was that the leak announced the policy ahead of the Budget and the loss of that share value definitely would have happened anyway. 
I always enjoy listening to Mr Gordon Copeland because he always makes a good contribution and he stands up for property rights. He said that United Future is not standing up for property rights in this case because the Telecom board never raised the matter. But submitter after submitter raised the matter. 
Members should understand what this bill does. There is no doubt in anyone’s mind about the legal position of Telecom and its shareholders. They own the local loop. They own that copper wire. They bought it and paid for it so it is legally theirs. What this legislation does is to take it from them and say that anyone can use it as long as they pay what Parliament or the Minister declares to be a fair price. That is like Parliament opening up Helen Clark’s front porch and saying that anyone can use it whenever they want as long as they pay their two bob. That would be wrong; that would be overturning property rights. It is the same principle with Telecom. 
If we truly believe that there are such benefits to opening up the copper network we should do so in a manner that is principled and that would be to buy it back on behalf of the taxpayers of New Zealand or to pay full compensation. Are we seeing that happening? No. It is a straight case of “take it” with no compensation. Why? The reason is that this House does not believe that the benefits are there and therefore it is not prepared to compensate the shareholders for their loss. This legislation robs the shareholders of Telecom of their investment. That includes little old ladies’ pension schemes. That is what this Parliament has done. It is doing it here today. We heard Mr Flavell saying that Maori are leapfrogging over the copper wire to the mobile network. Absolutely they are! That just proves how competitive the industry is and the future will be wireless and mobile which also shows how competitive the industry is. 
When Richard Prebble was the Postmaster-General or whatever we had in those days which was not so long ago he received a memo from the New Zealand Post Office. Do people remember the New Zealand Post Office? This would have been in the 1980s. The memo was advice to the Minister and it stated: “We do not see much future for the fax machine in New Zealand because we are perfectly served in this country by telegrams.” The New Zealand Post Office recommended against the introduction of fax machines into New Zealand. Can people imagine that happening now? That happened just a little over 20 years ago. That is how far this industry has moved since then and it has done that not because of what the Government has done but because people have invested in New Zealand. 
What this bill does is put a dampener on that investment because people invest in New Zealand now somewhat at their peril. I am not crying doom and gloom over this but I am saying that it does become a factor when people are investing in this small island nation at the bottom of the Pacific. People could put in billions of dollars to build up a Vodafone mobile network and Mr Flavell could get the numbers pinch it from those investors—like we are doing today—and open it up to his mates. That is the danger of this. That is what has happened here. The investment into New Zealand will be somewhat diminished. How does that help competition? It does not. The way to help competition is simple: lower the regulatory burden on business; do not put it up; respect people’s property rights and the fruits of their labour; and have a low flat tax. 
I am proud to be in the ACT party voting against this bill. I am shocked that my colleagues and friends in National are supporting it. They are making a terrible mistake.