Hughes Gareth: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Second Reading 
Hughes Gareth: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Second Reading 
[Volume:673;Page:19300] 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker Robertson. Nga mihi nui ki a koutou. Kia ora. It is a real privilege to take a call today on the Telecommunications (TSO Broadband and Other Matters) Amendment Bill. The Green Party supports the bill’s intention of ultra-fast broadband and a roll-out across the country of high-speed broadband but we thoroughly disagree that this bill is able to deliver that. We support the intention but we will not be supporting this legislation through the House. We supported it at its first reading but after going through the select committee process witnessing the poor process and witnessing the poor outcome that has come out of these last-minute deals that were stitched up in back rooms the Green Party cannot support this bill even though we wholeheartedly support better faster and cheaper broadband. We will keep working with whatever Government takes the Treasury benches to make sure we get it. 
We believe that ultra-fast broadband can transform our economy and our society through better businesses through lowering air miles and greenhouse gases through videoconferencing through better telecommuting and through medical advances such as sending magnetic resonance imaging scanning images to doctors potentially all around the country and all around the world. It can make our medical system much more efficient much cheaper and much better for both patients and doctors. It could also transform our educational systems. It is disappointing that 500 schools will miss out; they might get this advanced form of microwave or other broadband. But the potential for education is massive. 
Lastly and probably of most interest to me is the entertainment potential. We have just wrapped up the Copyright (Infringing File Sharing) Amendment Bill in Parliament. We are seeing more and more Kiwis and people around the world living their lives online. They get their entertainment online. More of the business models into the future will provide massive services through broadband. A couple of weeks after the UN special rapporteur’s report that terminating internet access is a breach of human rights it is great to be having this debate in Parliament. 
I thank the Finance and Expenditure Committee members and in particular the chair Mr Foss who is going on to other things. I congratulate him. I congratulate all the submitters who put a lot of effort into the process. 
In this call I intend to look at four things. I will look at the bill’s history and process. I will look in particular at the forbearance issue: the embarrassing back-down the Minister was forced to undertake and the last-minute compromise that was stitched up. I will look at Telecom which was the winner of the Crown Fibre Holdings contracts. Lastly I will look again at why we are opposing this bill: the missed opportunity. That is what this bill is: a missed opportunity. We are investing $1.35 billion of Government funds—of taxpayer funds—to roll out broadband across the country with our scarce resources at a time when we are borrowing hundreds of millions of dollars a week. We need to make sure that every dollar counts. Unfortunately that is not being achieved through this bill. 
This bill spends the Government’s money on ultra-fast broadband. It also rolls out the Rural Broadband Initiative the telecommunications service obligations and the levy. Although we disagree with the definitions around high-speed broadband we can agree to disagree on that matter. We would have liked to see much speedier broadband and much better uploading speeds. The internet is not just a way of downloading files which most people do currently; the real transformative benefits of the internet come from being able to upload files be they magnetic resonance imaging scan pictures or a file for a teacher to send all over the country for her class. 
When we look at the history of the telecommunications sector in New Zealand we see that it is older than I am. We have seen a sector characterised by monopolies poor services and lack of historical investment. We saw the failed privatisation experiment. I note that Brian Gaynor recently published some research showing that up until 1999 Kiwi taxpayers missed out on more than $8 billion in investment which they would not have if we had adopted a similar service to the Australian Government with Telstra. We have missed out on infrastructure investment and we have missed out on dividends to Kiwi taxpayers. In this sector we have seen a significantly anti-competitive Telecom. I note that Telecom just recently received a $12 million fine for its anti-competitive activities between 2001 and 2004. 
We have to look at why we are even standing in this debating chamber looking at the issue of ultra-fast broadband. The reason we are here is that historically Telecom primarily has dismally and woefully lacked investment in broadband. This was one of National’s major election platforms. Steven Joyce unfortunately is also the Minister of Transport. To answer Trevor Mallard’s question I say that Mr Joyce is more knowledgable when it comes to asphalt and concrete for his “roads of significance to National” than he is about high-tech services such as ultra-fast broadband. He has simply left it too late. He had to get something out of the door before the election in order to realise his election promise. 
He left it too late and because he raced through the process he has alienated businesses and sector groups. We have seen an unprecedented outpouring. We have seen full page ads in the daily papers and television commercials criticising this Government’s poor process and the poor outcomes of this bill. We have seen the Government in an embarrassing back-down only 2 days after the Finance and Expenditure Committee report was tabled in this House. We have seen secretive meetings and a lack of cross-party consultation or consensus reached which is to the detriment of Kiwi consumers and the Kiwi broadband market. 
At the select committee it was a real privilege to hear the submissions and to hear the good questions asked by other select committee members. I heard in the select committee a resounding objection to forbearance from industrial watchdogs consumer groups and the players in the industry. They were resoundingly opposed to forbearance because it was unprecedented. Steven Joyce must be a cowboy movie fan because it essentially sets up a Wild West situation. We heard from the officials that quite simply the Government did not invest an adequate amount of funds to achieve its ambitions of 75 percent coverage so it had to set up an unregulated Wild West - type environment to stimulate investment. We heard from the Minister over and over again— 
Hon Trevor Mallard 
: The member’s got it exactly wrong. He’s got it arse about face. 
GARETH HUGHES 
: Mr Mallard says it is arse about face. Faced with massive objection and criticism from all across the political spectrum and all across the industry spectrum we heard constantly from the Minister that people simply do not understand. Only the Minister knew the ins and outs of the bill! When it came to any question the Minister’s only answer was: “You don’t understand. Go and look at the bill again.” yet we see the Minister’s embarrassing back-downs. 
We saw some good changes in the select committee in relation to the definition of “equivalence”. We also saw the review brought forward to 2016 but the fact is that the review will now be completed over a 3-year period. It is not really a review when the end of the review is the end of the broadband period. In effect it will not be of much practical use if the plan is a lemon and is not working out. 
Forbearance was our major criticism and the primary reason why we changed our vote. In the minority report the Green Party stated: “The Government’s plans for the roll-out of ultra-fast broadband will be significantly compromised by creating an unregulated monopoly in the industry because of a lack of Government investment to achieve its own coverage aims. Unregulated monopolies especially in critical industries like telecommunications undermine the competitiveness of the New Zealand economy and deliver poorer services.” That issue has been picked up too by Sir Roger Douglas and the rest of the ACT Party. 
The forbearance period of 8½ years was absolutely unprecedented in our history and I understand internationally as well. Google was not the primary search engine 8½ years ago; people were still using Ask Jeeves to find a website. How on earth can the Government predict what the telecommunications and internet market will be in 8½ years’ time? It is simply ridiculous. The Minister was absolutely intransigent in the select committee process through the officials that the Government would not budge on this matter until the Government came up against the realpolitik of the Maori Party potentially withdrawing its votes. Two days after the report was tabled the Government backed down so I say good on the Maori Party for forcing the Government’s hand. It was a poor process from the get-go and an even poorer process because the Government backed down and had to stitch up this compromise. None of it went through a select committee process. None of the public got to submit or have their views on these changes heard. 
Essentially the big change replacing forbearance is that the Commerce Commission can regulate pricing on fibre but it is up to the Minister to decide whether regulation is needed. As Clare Curran rightly asked why would the Minister regulate if the taxpayer will have to wear the risk? We have seen no analysis by the Government. This is just continuing the poor process of massive Supplementary Order Papers being tabled in the select committee of secretive meetings and of these embarrassing back-downs and stitch up deals. Thank goodness they have had good sense—and we congratulate the Government—to back down on forbearance and on the regulatory holiday. We now wish for the Minister to back down on the “Holiday Highway” which is a $1.7 billion economic mistake. 
When I look at what the Government has stitched up in the back rooms I fear that the cure is in fact worse than the disease. Essentially Telecom is the massive winner with more than 70 percent of the coverage: of $1.35 billion Telecom will receive $929 million. The vast bulk of those profits will simply flow offshore and overseas shareholders will be the winners. More worrying is that we will see dependence on copper continuing Telecom’s copper legacy which will see Kiwi broadband customers worse off. 
Essentially we have missed a once-in-a-lifetime opportunity. It has been a poor process. We have seen a poor outcome with the copper and it is a poor deal for Kiwis. Kia ora.