Wood MichaelMICHAEL WOOD (Labour—Mt Roskill): Well my colleague Ruth Dyson was just complimenting the House on the quality of debate about this important bill tonight and I can only say things are going to get even better as it proceeds. I rise to speak in favour of the Telecommunications (New Regulatory Framework) Amendment Bill. It is actually one of those really really important bills because as is noted in some of the notes that no doubt other members have read we are talking about what is now one of the major utilities in our lives.When we talk about the utilities historically we have thought about having access to clean running water we have thought about access to electricity and we have thought about access to sewerage and waste-water services and we have thought that those are the core utilities that in a modern civilised decent society basically everyone should have access to. If we found out that there was a person or a community in New Zealand who did not have access to those basic utilities we would think that something had gone wrong. What many of us now believe is that access to modern high-quality fibre-connected internet really is also one of those utilities and why is that? It is because so much of what we might want to do in our modern lives—whether it is personal interest whether it is business or whether it is connecting to people who are important to us—absolutely relies on modern high-quality internet connectivity. So it is a utility that people have come to rely on.When you are talking about utilities it is important that you have a degree of equity. If we have those utilities and some people in our community and our country have access to them and others do not you get a divide and that is an inequality that simply should not stand.This particular bill stems from an inbuilt review of the Telecommunications Act 2001 passed by the very capable fifth Labour Government. I cannot remember which Minister that would have been under the aegis of.Jenny Salesa: Ruth Dyson?Hon Ruth Dyson: No.MICHAEL WOOD: Not Ruth Dyson but no doubt a very capable Minister. That inbuilt review was put in place at that time really in recognition that this is a fast-moving environment—that the world of telecommunications changes immeasurably in 5-year blocks. Even if we went back to the year 2001 things would have been completely different in terms of the way that people communicate so it is very sensible that in these major pieces of regulation in this area we do build in these kinds of reviews.It is also important that we do have good quality regulation. In respect of that I want to turn to what I thought was a really good comment from InternetNZ which participated significantly in the review that has led to this piece of legislation. So the review has been taking place over the past couple of years—since 2015. Pleasingly it has been a relatively open process. That was one of the things that the Labour Party called for that InternetNZ called for and that the Telecommunications Users Association of New Zealand called for to ensure that it was not just sort of locked up by the big players that might have had vested interests in terms of the way that prices are set and regulations are struck. We said it should be an open and engaged process in which people with an interest in this area can have a say. We commend the Government for going down that path.Here is what InternetNZ had to say about why it is important that we have regulation in this area. Sometimes in this House there is a debate about whether we should or should not have regulation and debates about the merits of regulation per se. Here is what InternetNZ Chief Executive Jordan Carter said: It is … important that New Zealanders have confidence and predictability in Internet prices … InternetNZ believes that's best achieved by proactive regulation of pricing for fibre and copper services to be in place by 2020—so we all know where we stand. Regulators are the vital protection for consumers. Commercial deals in environments like telecommunications access pricing never end up with the best deal for customers—in the absence of a contractual price (as initially set under the UFB programme) only a well-funded capable regulator has the analysis and power to stand up to the interests of companies worth billions of dollars and to encourage competition while driving the best possible bargain for those paying the bills."I think that is a really valid comment because in the sector we are talking about large and powerful players. Of course we have Chorus which effectively operates a natural monopoly and that natural monopoly is not something that we can test. It is not something you would want to duplicate. You would not want to have two or three different companies setting up a fibre network across New Zealand. It would not make any sense whatsoever. So having Chorus there as a natural monopoly makes sense but it gives it enormous power and it is entirely appropriate that we therefore regulate it.When we look specifically at the bill what does it seek to do? There are a number of particular areas—and I will just pull out my notes here. There are four key things that it attempts to do. The first is to "establish a stable and predictable regulatory framework for fibre fixed line access". Secondly it is to "remove unnecessary copper fixed line access service regulation:" and that is where we shift from copper to fibre avoiding having a regulatory overlap. It seeks to "streamline regulatory processes to enable a rapid response to any competition problems" that might emerge—and of course we cannot always foresee those at this point in time—and to "provide more regulatory oversight of retail service quality."I just want to now work through in a little bit more detail some of the provisions in the bill that give effect to those objectives which certainly we in the Labour Party agree with. The first one is in respect of "Regulation of fibre fixed line access services". These are about the particular regulations that we apply to Chorus which is providing that fibre network across the country. There are two important things here. The first is what we call price-quality regulation which is where the prices or revenue controls and requirements for service quality are placed on Chorus. So we are not just giving Chorus a free licence to set prices—potentially when you are a natural monopoly you could abuse that power—we are putting some controls over the way it sets its prices which obviously then flows on to service providers and consumers.Secondly and this is really important there is an information disclosure regime that comes into place which means that we get publicly available information about Chorus's performance and its financials so that we can assess that it is not making supernormal profits that it is behaving in a reasonable way and that it is not rorting people—including consumers ultimately—further down the line. Then in respect of the local fibre companies that are a tier down from Chorus we say that they will be subject to the information disclosure regulation but not the price control regulation.Another important aspect of this is what we call the "Establishment of input methodologies" and that goes to how the Commerce Commission which is ultimately overseeing and regulating this area will determine what reasonable profits are and whether Chorus is behaving in a reasonable way that is not stifling competition and ripping off service providers and consumers. That means that Chorus is under an obligation to provide information about costs of capital asset valuation the allocation of costs its taxation treatment and certain other aspects of its business operation. These are things that we would not ordinarily expect of a business in a competitive environment but when it is a natural monopoly like Chorus it is reasonable that we ask these things so that we can assess that it is behaving in a reasonable way.Importantly—and this has been touched on by a couple of previous speakers—we do also set in place a couple of anchor services. The way that I think about these a little bit is that under the old Telecom we had the Kiwi share obligation which meant that Telecom had to provide for every household a very basic service of a landline—this was at the point when it was privatised. It was one of the few controls that we put upon it. It said: "OK you've got a lot of power effectively as a monopoly. Here's a basic level of service you have to provide to all New Zealanders."In the case of the anchor services there is going to be price regulation around these as well so it is going to refer to basic levels of internet connectivity which is a basic service that you might have at home and a basic voice-only service as well. One of the interesting points around this is that—and it is really important actually—in this piece of legislation we are going to be setting certain standards in respect of what those anchor services should be. So these will be the basic services that all New Zealanders can rely upon. They might get more but this is the minimum that will have to be provided by Chorus.We have heard that that service has been set at I think 100 megabits per second download and 20 megabits per second upload. InternetNZ in its comments has actually queried that. It has queried whether that is setting the threshold a little bit too low potentially for New Zealand consumers. Given that we are aware that internet speeds are increasing all the time I think it is really important that we get to the select committee stage we get some expert advice and we listen to the submitters to make sure that we are setting that anchor service at the right point. If we set it too low then huge numbers of consumers across New Zealand are not going to get the best possible service.One of the other important aspects of the bill is around review and enforcement. That is ensuring that the Commerce Commission has the chops effectively to go in to look at what Chorus is doing and to conduct investigations into its services where necessary and then to have some real enforcement. So there is a maximum penalty for example of $10 million and compliance requirements that the Commerce Commission can use.We do support the direction of this bill in terms of providing a modern regulatory environment. As previous speakers on this side of the House have said the big concern that we have got though is that the Government has just been a bit too slow with the roll-out of high-quality fibre. I have got areas in my electorate in the middle of Auckland that are not getting access to fibre until 2019 let alone those people in the rural areas who face a wait until 2024 and that does stifle innovation and stifle choices.We support this bill further but we will also speed up access to high-quality broadband for all New Zealanders. Thank you."