Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Third Reading 
Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Third Reading 
[Volume:673;Page:19684] 
Telecommunications (TSO Broadband and Other Matters) Amendment Bill 
Third Reading 
Hon STEVEN JOYCE (Minister for Communications and Information Technology) 
: 
 I move  
That the Telecommunications (TSO Broadband and Other Matters) Amendment Bill be now read a third time 
. This bill lays the regulatory foundations to deliver ultra-fast broadband to 75 percent of New Zealanders and 97 percent of schools and to allow access to much faster broadband services for a quarter of a million rural New Zealanders who are struggling on dial-up. These technologies will see us leapfrog a wide range of our international competing countries improve our connectivity and drive economic growth. The deployment of new digital technology is the most transformative infrastructure project New Zealand has seen since reticulated electricity. It will change the way we work the way we learn the way we receive health care and the way we live our lives. 
This bill also includes a blueprint for a new industry structure that will be a profound improvement to the way telecommunications services are organised and provided in this country. The vertically integrated incumbent company will split itself into two. Telecom as we know it will cease to exist. Chorus a network infrastructure provider and Telecom retail will have separate ownership staff boards shares and incentives. This structural separation is ground-breaking. It supersedes an operational separation model that has been underwhelming in terms of providing genuine separation and supporting competition. 
This bill has wide support from across industry and across the country. There have been some criticisms on the way through—notably from the Opposition members—but they are largely jumping at shadows and at best are based on misunderstandings. I will summarise a few of them now. Chorus will maintain the Kiwi share ownership requirements that are currently placed on Telecom. That is the reality. The free-calling obligations under the telecommunications service obligations for unmetered local calling and basic phone access to all New Zealanders will be unchanged and split appropriately between the network and retail businesses. These obligations will appear in and be supported by legislation as they have been since 2001. 
We have found a way to ensure that the Commerce Commission can have oversight over the wholesale pricing of the fibre network while also maintaining an appropriate certainty of price for partners that allows them to offer the best possible deal to consumers. Contractual mechanisms provide for a delayed return to the Crown if the Commerce Commission intervenes on price. I stress that this is highly unlikely. The network will be a new nascent network competing with a regulated copper network not the vertically integrated monopoly of old. Compensation would not be provided if regulation came about as a result of deceptive or anti-competitive behaviour. 
There have been some comments about equivalence of inputs in relation to open access. The new fibre network will be an open access network. It does not make sense to apply burdensome equivalence of inputs requirements to residential markets in the first instance—especially since technological ways to do this are not yet available or being used overseas. Instead we will be requiring non-discrimination meaning that the same price must be offered by the network owners to all retailers. Equivalence of inputs at layer 1 will be brought in at a later time which is specified. 
Much has been made of the supposed increase in copper broadband price as a result of the averaging of unbundled copper local loop prices with all sorts of figures being bandied about by the Opposition. In fact it is not clear at all that there would be an increase to consumers. Unbundled copper local loop covers only 4 percent of lines and changes to other products that come about as a result of this legislation may in fact result in decreased prices. Finally the weirdest criticism of all is that it is being done either too slowly or too quickly depending on which part of the Opposition speech we are hearing. This bill has had 6 months in the Finance and Expenditure Committee and there have been huge amounts of consultation with the industry on the matters in this bill. 
The real test of this legislation and the regulatory framework it provides can be summed up I think in three questions. It is these questions that I have primarily used to test the merits of the arrangements we have set up in terms of achieving both the Ultra-fast Broadband Initiative and the Rural Broadband Initiative. The first test is the cost to build. Because the Government engaged in an authentic competitive process to determine our partners and because we opted for a public-private partnership the Government is getting very good value for money for its contribution to the development of rural and urban broadband. In fact one of the criticisms from the Opposition is that we are not spending more money. We are achieving a network roll-out that many thought impossible and we are doing so for substantially less than comparable countries overseas. 
The second test is the cost to consumers. These prices are genuinely competitive and genuinely accessible. Rural New Zealanders will be able to access prices for fast broadband at the same cost as their urban counterparts. Urban New Zealanders will have access to vastly superior fibre services than they have had for about the same price or less that they currently pay for copper. Businesses schools and hospitals around the country will see lower costs and better performance. Because these initiatives also deliver a competitive industry structure we can expect prices and products to get better over time. 
The third test is the cost to taxpayers. We have maintained the fiscal envelope for ultra-fast broadband and the Rural Broadband Initiative. We have enhanced the integrity of our regulatory system at the same time. The Commerce Commission maintains a key role in providing independent oversight over the initiative. We have made changes to the copper regime that make sense given a new environment where there is structural separation between network and retail—something that some would argue should have happened some time ago—and we have provided for the development of a new fibre network that will serve New Zealanders well for decades to come. 
The passing of this bill today marks the end of the beginning towards a new era of world-class broadband infrastructure for New Zealand and the delivery of the Government’s broadband promises. It has been achieved in only 2½ years. I put that alongside the appalling record of the previous Government which took 7 and something years to achieve anything significant in the broadband space. 
I would like to close by thanking the officials for their fine work. They have done a fantastic job. I would also like to thank the select committee for its fine work. I thank the Maori Party for its support for what it knows will be transformative economic infrastructure for New Zealand. I would like to thank the members of the ACT Party who are providing their support for the bill. I commend this bill to the House. I say to those who are opposed to the future who are opposed to this bill and who are opposed to transformative change in the New Zealand economy that it is not too late for them to vote for this bill. I move that the bill be read a third time. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 In 2008 this Government was elected on a promise—a fairly big promise. It was No. 2 on its pledge card to the New Zealand public and it was to deliver ultra-fast broadband to 75 percent of New Zealanders in their homes in 10 years for $1.5 billion. The National Government is pushing through this bill the Telecommunications (TSO Broadband and Other Matters) Amendment Bill because it wants to satisfy that election promise—a promise that should not have been made cannot be delivered and can be met only by selling the law which is what it has done. 
The Minister for Communications and Information Technology has spent 2½ years trying. This was after he cut the Labour Government’s digital strategy which clearly set out a vision for New Zealand’s future as a digital economy and how broadband would be incorporated. Despite this lack of vision from the Minister he has not at any stage requested analysis or advice from Treasury or the Ministry of Economic Development on the benefits and costs of this bill. Even the ACT Party could not understand that. Roger Douglas was quite right to say that “This Bill has been driven by a political imperative rather than an economic one.” 
Labour believes that New Zealand’s digital environment requires high-speed broadband across urban and rural New Zealand delivered in a realistic time frame at an affordable cost and in a competitive market. Before the last election a plan was in place and there was solid policy around progressing it quickly and there is more coming. This bill before us today does none of that and that is why we are opposed to burdening all Kiwis with this flawed legislation. 
Labour would have approached the fibre roll-out in urban areas differently. The process has lacked transparency. It is full of gaps and holes and we do not believe that the full costs and impacts have been made public. The interests of investors and corporates have been put ahead of the interests of New Zealand consumers and ahead of a strong and vigorous competition in this new and emerging network industry. There has been a lack of public and cross-party consultation. The window for public submissions was very short making it nearly impossible for detailed submissions to be made considering the complexity of this legislation. 
The negotiations with Telecom have been shrouded in secrecy. We are yet to find out the real details of Telecom’s structural separation. It is a huge change but by the time we do find out it will be too late to do anything about it and to have public scrutiny and discussion. The bill will have become law. Secrecy dubious decision-making and the marginalisation of the democratic parliamentary process seem to be the theme of this bill. What we do know about it is that it will create an uncompetitive market that could entrench Telecom2 and Chorus2 as the dominant players at the infrastructure wholesale and retail levels in the New Zealand fibre market. 
Telecom’s history of monopolistic behaviour will not change when it is broken up under the structural separation especially now that the Minister has guaranteed it that any costs incurred by Commerce Commission regulation will be worn by the taxpayer—an indemnity to Telecom; that is truly selling the law. What incentive will this give Telecom to behave competitively? What incentive will it give the Minister to regulate when the Crown will be bearing the cost? Once again the Minister is proposing law that just will not work; law that will increase the cost to the consumer while creating an anti-competitive market. 
Only minor definitional changes were made during the drafting of this bill. It was only after huge opposition from Labour MPs and the telecommunications industry that the Minister conceded that the major component of his bill the 10-year regulatory holiday had to be changed in order to receive enough support from the Government partners and to receive grudging support from the industry. When the amendment was tabled in the House we saw other changes that were new and very late. They were put up without the possibility of discussion. 
This is the Minister who did not know earlier this week that under his watch New Zealand’s broadband performance has seriously declined in relation to other countries since his Government took power. OECD statistics show that monthly prices in New Zealand have slipped from the seventh cheapest to fourth most expensive since 2008. We have gone from 12th to 21st for download speed and 12th to 24th for connection speed since his Government took power. He obviously does not keep tabs on New Zealand’s international competitiveness but he is blindly insistent on ramming through an anti-competitive law which hands a large amount of money to Telecom. 
We also know that this bill will be forcing prices up for urban users despite what he says through the averaging of unbundled copper pricing. While these users wait for fibre—which as the Minister himself has said could take at least until the end of 2019; even later for many New Zealanders—they will be paying more for the broadband services that they receive now. Is that fair at a time when household budgets are most stressed? We should not be surprised—this is classic behaviour by a National Government that is out of touch with the average Kiwi. 
Only a few days ago the Minister put forward an amendment that appears to do away with the Kiwi share obligation for Telecom. So at the last minute the Minister has sprung upon us an amendment that essentially opens up part of the separated Telecom to full foreign control. The old restrictions on foreign ownership will no longer apply to the retail arm of the split-up Telecom and the Kiwi share obligations will be split between Telecom and Chorus. Where that split will be and what the implications are for the New Zealand consumer are unclear. The Minister will not tell us and there is no chance for public scrutiny. 
Labour had a plan that would have been well on the way to completion by now. We want a high-tech economy run on ultra-fast broadband. We want to use technology to improve the responsiveness of the Government. We want to ensure that all users whether they are rich or poor rural or urban have access to the latest broadband services and we want to ensure that those services are provided as cheaply as possible in a competitive market. It is a shame that this Government and the Minister for Communications and Information Technology do not agree with those principles. 
This Government does not care for the average New Zealander; it cares only for those with money while doing deals. That is why Labour opposes this bill. We will repeal the worst parts of the legislation when we are returned to Government. We will review it and restore regulatory oversight. The Commerce Commission will have full powers to examine the contractual arrangements between the Crown and private investment as would happen in the normal course of events. Any consequences arising from this would be borne by the parties concerned. 
One of the things missing from this debate is the reason why people will connect to fibre to high-speed broadband. It seems that Steven Joyce the Minister in his obsession with fulfilling the election promise—a promise that could not be fulfilled with that amount of money—and devising a deeply flawed connection scheme left that bit out. “Build it and they will come.” was his argument. Will they? Content is the important issue and demand is about what people can use the high-speed broadband connections for and what would motivate them to switch from copper to fibre. 
Steven Joyce is not interested in a bigger vision and he is strangely silent on any consideration of how the content industry fits into it. The traditional broadcasting sector is transforming and merging with what has been described as the telecommunications and information and communications technology sector. Increasingly content and the digital environment cross technological platforms. Traditional broadcasting as we know it is now rapidly becoming obsolete. It is called convergence but we have not heard the Minister talk about that. 
New Zealand’s new broadband network will be successful only if people choose to access it and see its potential for the future. To do that they need access to quality and diversity of content from both within New Zealand and without. New Zealand’s broadcasting sector does not currently encourage competition and it lacks that important public television broadcasting function. The current commercial market framework is not delivering that as it lacks a publicly funded component. 
Our concern is about what is coming next. A dominant player is being set up in the fibre industry to deliver the infrastructure with virtually a free pass to price gouge its way through the next decade. Are we going to see a bigger monopoly in the broadcasting sector be given a gold-plated distribution channel into people’s homes? If that is the future for broadcasting fibre delivery in this country—a Telecom-Sky partnership—then today is a truly sad day for this nation. 
DAVID BENNETT (National—Hamilton East) 
: 
 The truly sad day is that Labour members will not support something that is good for New Zealand’s growth good for New Zealand’s citizens good for New Zealanders who want to get an education good for the New Zealand health system and good for our country going forward. Labour members could not and would not be able to deliver high-speed broadband for New Zealanders. If they had been in Government as they were prior to this term they would not even get a proposal off the ground. When you hear that— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member will not bring the Speaker into the debate. 
DAVID BENNETT 
: When there is an academic-type argument made about the theory of broadcasting—and there will be more academic arguments to come from future speakers on the Labour side—it shows that a Labour Government would never have been able to deliver broadband for New Zealanders. 
National has delivered. The National Party campaigned on that issue the National Government has delivered on it and the National Government will see the benefits of it. Labour and its Green allies would never have been able to get it across the line. That is the difference that New Zealanders need to see. This is a Government of action; it is a Government that will deliver. From the other side of the House we hear rhetoric. Labour is a party of academia. It is a party of failure that will not deliver for this country. 
We recommend this bill to the House. I congratulate the Minister on doing an excellent job in progressing this bill through the House and making a commercial decision about the delivery of service. I thank all those who submitted as part of the process; I especially thank the officials who are here supporting the progress of this bill. Thank you. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 In the third reading of the Telecommunications (TSO Broadband and Other Matters) Amendment Bill I am not going to comment on the member who has just resumed his seat David Bennett because as usual there is nothing much to comment on in what he said. I am going to comment however on the opening comments of the Minister for Communications and Information Technology as follows. 
Firstly the Minister did not perhaps mislead in the technical sense but certainly he pulled the wool over the public’s eyes in several key respects. He said that Chorus will maintain the Kiwi share obligation on Telecom. That is factually incorrect in two respects. First it is entering only into a contract called the telecommunications service obligation not the Kiwi share and Chorus is not equivalent to the whole of Telecom which is currently covered by the existing Kiwi share. Second he said that there would be open access but then contradicted himself by admitting plainly to the House exactly what the Labour Opposition has been saying which is that the weaker standard of access called “non-discrimination” applies across the board but the stronger standard called “equivalence of inputs” will apply only to some parts now and takes 8½ years to apply to everything. That is not good enough for the New Zealand system. 
The Minister said that people would not be paying more for their existing telephone lines under mandatory de-averaging. Well the objective analysis we have seen both from the library and from members of the industry is that the average New Zealander will pay at least $5 more a month for the same service they are currently getting on their copper phone line. The reason that is being done is precisely to make it less costly for them to shift to a fibre-based service except that they will not get the fibre for 8 to 10 years in many cases and will be left paying a higher price for today’s slow copper in order to subsidise Telecom to roll-out fibre eventually to some. The Minister for Communications and Information Technology then said that he was unsure whether he was being described as too slow or too quick. I can help him on that. It took him 2½ years to think up a policy after being elected. He did not have a policy; he had a slogan. That bit was too slow. The bit that was too quick was the select committee process where he started out after 2½ years of going round in circles by giving the public and the industry only 10 days to put together a submission. After 2½ years it was 10 days— 
Peseta Sam Lotu-Iiga 
: That’s not true. 
Hon DAVID CUNLIFFE 
: —which was pushed out to 3 weeks by the Finance and Expenditure Committee as Mr Lotu-Iiga knows. Either way it was a travesty. It was not an accident; it was a deliberate tactic by the “TSO Minister”—that is the “Terribly Slimy Operator” the “Terribly Slippery Operator”—to take as long as possible in the darkened rooms and to then try to railroad it through preventing the industry from having a decent opportunity for rebuttal. 
There are unanswered questions about taxes and there are unanswered questions about international obligations where the world’s No. 1 law firm at taking cases to the World Trade Organization issued an extensive opinion saying that New Zealand was in breach of its obligations because of a disguised subsidy to Telecom. Do members know what? We did not get so much as the dignity of a written opinion from this Government. We had half a page—half a page—from the Ministry of Foreign Affairs and Trade and a file note from the Ministry of Economic Development saying that it does not matter and that we were right. Well that does not cut it and the cost of that arrogance may well be a suit in front of the World Trade Organization. 
I will frame the rest of my comments using precisely the objectives the Minister himself called the House to mind. Firstly there is cost to build. The Minister said that this was cheap; this is not cheap. The purpose section of the current Telecommunications Act talks about the long-run benefits for consumers. What has happened here exactly as my colleague Clare Curran has said is that $1.5 billion—not as a grant not as a stimulus but as a commercial investment seeking a commercial rate of return—was never going to be within a bull’s roar of being sufficient to get 75 percent of homes covered by ultra-fast broadband. Just look at the costs in Australia. So to solve that problem in the short term this Government sold the law. It sold the law for 30 pieces of silver. Does that sound familiar? Maybe we should call this bill the “Judas Bill”. The Government sold the law in this case for $400 million to $600 million and I give credit to Sir Roger Douglas for nailing the officials on that point. For half a billion dollars extra Telecom has got its leverage over the law once again. It took a long time to sort out that problem. When we did sort it out—and it did not come easy—New Zealand rocketed up the international broadband rankings. After 2½ years of dithering by Steven Joyce and an anti-democratic parliamentary process Mr Joyce has managed to tumble us down those rankings again. 
This National Government once again has proved itself to be out of touch and out of ideas when it comes to high tech. Those members just do not do it too well do they? In terms of costs for consumers the Minister said that prices would generally be competitive. Well no they are not competitive today. People are paying too much now for their copper—5 bucks a month at least—and they will be paying too much for their fibre because the disciplines to keep it competitive have been fatally weakened. Imagine taking the cop off the beat for 10 years. The 10-year regulatory holiday—what an obscenity to good governance that was. What a preposterous idea! How could we imagine a responsible Minister bringing to the New Zealand Parliament the idea that we would take away for a decade the hard-fought protections of the consumer? What a ridiculous and laughable suggestion. It was so ridiculous that the Minister was in a minority of one. Only Telecom backed him and when his friends deserted him he called in the Maori Party to provide a fig leaf so that he could back off it. What a backdown it was. When he changed his mind and Telecom complained he came up with an indemnity for Telecom funded by the taxpayer so that if it was caught out by the regulator in future and had to drop its price it would not pay the difference but the taxpayers—mum and dad Kiwis—who were already paying the phone bill would have to pay a bigger tax bill as well. That is an appalling precedent and this Parliament is the worse for it. Our statute book is the worse for it. 
I will draw the debate in this third reading together with some form of conclusion. Firstly this is bad law. It lacks a good strategic context. It says nothing about the ability of every New Zealander to hook up. By raising costs and prices it means that low-income Kiwis those on the wrong side of the digital divide are now even further behind. Secondly it weakens fatally the regulatory framework particularly at the wholesale level. It does so particularly at the crucial layer 0 ducts and layer 1 dark fibre where the proper disciplines of equivalence of inputs do not apply on fibre for 8½ years. This represents a covert backroom deal with the dominant player in the industry. Strangely enough not even the Minister will know until after the Telecom board has decided the nature of the split which assets are going where and what the final shape of the deal will be. That is great for the interests of shareholders but not great for the interests of consumers. 
We are going back to the future one suspects. It has set back confidence in the industry already. The damage has already been done. It will not take 10 years to realise that damage. The industry has started to shut down. What would a rational policy have looked like? It would have said we need to get fibre in the ground to take New Zealand forward. We want to get as many players as possible contributing. We have an inclusive framework not an exclusive one where they bid one against another and only Telecom gets to play. An inclusive process would have got the most investment from the most players to build the most fibre as fast as possible. That is the opposite of the outcome of this bill. Consumers get a worse deal than they need to get today and their losses will accumulate over the 10 years. It leaves unanswered the crucial questions for the future. How will we get all New Zealanders on to the net and how will we ensure free access to content? Are we building a new monopoly for Sky television? That is the next chapter of this sorry saga. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker Robertson. Nga mihi nui ki a koutou. Kia ora. It is great to be here discussing what is popularly known as the “Ultra-fast Broadband Bill” but what I have seen in the process through the Finance and Expenditure Committee through the debate in this House—throughout the whole process—is an “Ultra-farce Broadband Bill”. It is a privilege to be here today and to take a call on the Telecommunications (TSO Broadband and Other Matters) Bill. The Green Party supports better broadband. We know that it is vital for our economic and ecologic future. But we do not support and we will not be voting for this bill for the reasons I will elucidate in this speech. 
This bill has been rammed through in a poor process. We will see poor outcomes and Kiwis will be poorer because of it. UFB or ultra-fast broadband can transform our world. We have heard the Minister talk about the transformative benefits of broadband. Mr Bennett has argued that the Government has delivered it already but we are seeing a process that will take years to roll out. We have seen industry sector groups totally alienated and absolutely frustrated at the process and we still see a bill through which it will take almost a decade to finally roll out ultra-fast broadband. 
I think the tragedy of the bill and the way the Minister has gone about progressing it is that we are focused on the poor process we are focused on the monopoly and we are focused on the regulatory forbearance. Nowhere in the select committee and nowhere in the debate have we actually focused on the substantial benefits. Broadband can bring fundamental benefits to the medical sector to the educational sector and to the entertainment sector. It can even change our Parliament and our Government and make our democracy more inclusive transparent and engaged with our citizenry. I believe that the internet is a human right—or that access to information is a human right—and I wish we were having those discussions in Parliament. Instead because of the way the Minister has gone about it we have had to debate the poor process and the poor decisions he has made. 
I thank the select committee members committee chairman Mr Foss the officials and the submitters. I point out the good work and the great questions of David Cunliffe and Clare Curran in the House. In this call I will look at a few issues. I will look at the history and process of the bill. I will look at the forbearance issue and at the embarrassing backdown the Minister has been forced to undertake. I will look at the Kiwi share changes. I will look at Telecom which is ultimately the big winner of the “Ultra-farce Broadband Bill”. And lastly I will summarise why the Green Party will be opposing this bill. Fundamentally it is not because we are opposed to broadband; it is because we are opposed to this bill the poor process and the fundamentally missed opportunities this bill symbolises. 
Firstly this bill takes a great chunk of taxpayers’ cash—more than $1.35 billion—and essentially gives the lion’s share of the money to Telecom in order for it to achieve its goal of 75 percent coverage. But we can debate what high-speed broadband actually is especially in regard to upload speeds. We can say it is good that broadband is going out there. We support the Rural Broadband Initiative; we do not think there should be a gap in coverage between rural and urban Kiwis. The bill changes the telecommunications service obligation and the levy. The big change introduced in the Committee stage was to the Kiwi share which I will touch on. 
When we look at the history of the telecommunications sector we see that it has been characterised by monopoly poor services and an anti-competitive nature. Just a couple of weeks ago Telecom was fined $12 million for its anti-competitive processes from 2001 through to 2004; we have to ask ourselves why we are here throwing more than $1 billion at Telecom to deliver something. It is because of that company’s lack of investment and the lack of an investment-friendly environment for getting better broadband rolled out for Kiwis. The National Party took the issue of broadband to the election and made it one of its top priorities but for some reason Steven Joyce the Minister for Communications and Information Technology left it until 2½ years into the parliamentary term to finally get a bill through the House. Mr Bennett calls broadband delivered; we have not even passed the legislation. We have not seen any broadband rolled out so I think it is a bit premature to say it has been delivered. 
The Minister in his call on the third reading said that we had had wide support from industry and that those opposing the bill who were mostly just Opposition members were jumping at shadows. I do not know whether the Minister has seen the widespread advertising on television and in print the letters the select committee read the blogs and the newspaper articles. There has been huge fundamental opposition to this bill and this process. Only Telecom as Miss Curran said has supported it. An impressive number of telecommunications companies and industry watchdogs with very diverse interests came out together to oppose this bill. I think it is ridiculous to say that they were just jumping at shadows. 
We have seen a shocking process with Supplementary Order Paper 204 tabled during the select committee process—a Supplementary Order Paper bigger than the actual legislation it was amending. We have seen Supplementary Order Paper 247 tabled in the Committee stage with those fundamental changes to the Kiwi share. We have seen secretive backroom meetings a lack of consultation and an absolute arrogance on the part of the Minister. Every single question has been answered simply with: “You don’t understand it.” It has been the same from the Ministry of Economic Development with its legal advice: “You just don’t understand. Only we understand.” We have seen a great deal of arrogance from the Minister in his saying to people that they did not understand. There has been an absolute lack of cross-party consultation or consensus. When it comes to telecommunications the issue should not be a partisan issue. The different parties should work together because we all want better broadband for Kiwis. 
We have seen a good select committee process. It came up with some good changes along with the equivalence ruling which was not as high as we would have liked but we acknowledge that ground was given there. We saw the review brought forward; there were some good changes there. The main issue for submitters in the select committee was in relation to regulatory forbearance. I believe that the Minister was acting like a bit of a cowboy because regulatory forbearance was needed essentially because the Government would not put in adequate funds to develop the resource. The most apt analogy for trying to develop an infrastructure for broadband today is the Wild West of America with its railways in the 1860s and we have seen “Cowboy Joyce” set up a Wild West environment where there are no regulations so that private people can benefit. That is totally unprecedented in New Zealand legislation and probably worldwide as well. Yet we have seen absolute intransigence by the Minister who has been categorically and fundamentally opposed to changing his position on it. He was fundamentally opposed to letting his officials do extra work on it yet 2 days after the bill was tabled we saw the Minister have to back down because of the realpolitik played by the Maori Party. I say “Good on them”. It has been a shocking process but we had to see that change. Now the Minister has totally changed tune. He has said: “We somehow found”— 
Clare Curran 
: “We listened.” 
GARETH HUGHES 
: “We listened; we found the solution.” Yet this solution has not been put through a select committee process. It has not been consulted on with the public or the sector. We initially welcomed the backdown by the Minister but now we are opposed because he has replaced regulatory forbearance and the Wild West environment; he has actually— 
Hon David Cunliffe 
: A blank cheque! 
GARETH HUGHES 
: He has given a blank cheque to the Wild West. The Wild West is still there but he is saying that if people set up camp or a city in the Wild West the Government will cover their risks and underwrite them. That is absolutely shocking. The Minister did have the good sense to back the regulatory holiday; I wish he would now back the holiday highway. 
The real winner of this bill is Telecom. It will be taking about $929 million of taxpayers’ funds and the vast bulk of that will simply flow offshore. We are still subject to the shareholder vote on the structural separation and there are huge questions about taxpayer money going to Telecom—maybe up to $900 million worth. 
In summary we have essentially seen a bill set up a monopoly that will be bad for consumers. We have seen a poor process poor outcomes and a poor deal for Kiwis. Telecommunications should not be partisan. The Greens would have worked with the Government to deal with a good policy. What we have now is increased policy uncertainty for the sector and Labour and the Green Party will look to reform it in the future. 
I have seen the Minister in his information and communications technology hat acting just like the Minister of Transport with his transport hat. Through poor process he is ramming motorways and other types of infrastructure through communities in Kapiti and Waterview and changing the Greater Wellington Regional Council’s water rules. We are seeing the Minister throw huge sums of money to motorways—$10.7 billion on just seven roads of significance to National—with bad benefit-cost ratios and with the main beneficiaries coming from corporate New Zealand. Ultimately just as in this broadband bill Government policy is locking us into an outdated concept. When it comes to roads of significance to National it is locking us into a car and oil-dependent future; with this bill it is locking us into an old-fashioned copper sector. We should have been looking to the future and that is the massive missed opportunity of this bill. In transport I call Steven Joyce the “Colossus of Roads” for building a monument in asphalt and concrete to folly; if I recall rightly the Colossus of Rhodes was actually made of copper. 
Hon JOHN BOSCAWEN (Leader—ACT) 
: 
 I rise to take a call on the third reading of the Telecommunications (TSO Broadband and Other Matters) Amendment Bill. I have to say that there have probably been very few bills in the last 2½ years of this Parliament that have caused as much discussion as this particular bill has in our caucus. During the second reading debate my colleague Sir Roger Douglas advised the House that the ACT Party would be splitting its vote on the second reading. We continued to split our vote during the Committee stage of the bill and we will be doing so again this afternoon. My colleagues Sir Roger Douglas and the Hon Heather Roy who is in the House with me this afternoon will be voting against this bill and my colleagues the Hon Rodney Hide and Hilary Calvert and I will be supporting this bill. 
I want to take this opportunity this afternoon to state our two positions and to express the concerns we all have including those members who are supporting this bill. Let me start by referring to the arguments put forward by my colleague the Hon Sir Roger Douglas for opposing this bill because it was Sir Roger Douglas who did the heavy lifting on this bill for our caucus. It was he who attended the Finance and Expenditure Committee meetings heard the evidence and formed the opinions. He has a number of concerns but I think his most important concern is that no proper economic analysis has been done. There has been no detailed study by Treasury as to the benefits of this bill and no detailed analysis has been done by the Ministry of Economic Development. 
Clare Curran 
: Why are you supporting it? 
Hon JOHN BOSCAWEN 
: I am being asked by Clare Curran why I am voting for it. If members have the courtesy to listen I will be happy to explain it to them. But let me just go back to the comments of Sir Roger Douglas in his speech. He highlighted the fact that there had been no proper economic analysis. In fact he referred to the fact that the only major economic analysis and independent study were done by the Motu Economic and Public Policy Research Trust which concluded that there was no economic benefit. I will quote Sir Roger Douglas’ second reading speech. He said: “The Motu Economic and Public Policy Research Trust has done the only empirical work in this area and it concluded that faster broadband speeds are likely to have a negligible impact on the New Zealand economy.” I will come back to those comments shortly. 
He also said that the bill was a gamble that would bring benefits to New Zealand that were uncertain. He said we could not be certain of those benefits. He went on to say that there had been no proper cost-benefit analysis and that “with all significant interventions the onus is on the Government to show that the investment of taxpayers’ money is warranted and beneficial to New Zealand.” He said that the greatest flaw with this bill is that it lacks vital information to make an informed decision. 
Not surprisingly he asked a rhetorical question. He asked which is more extreme: a National Government that is happy to spend taxpayers’ money in times of economic hardship with no cost-benefit analysis or politicians who seek fiscal restraint in times of economic hardship and who require sound intervention to justify Government spending programmes. 
I thought long and hard about voting for this bill because I know that Sir Roger Douglas has done the work and that my colleague Hilary Calvert has listened to Roger’s arguments in caucus and supports him. However others in caucus have also spoken—[ 
Interruption 
]—they have spoken to people in industry in education and in health I tell Mr Cunliffe and we have also heard the arguments in support of this bill. We have heard the arguments that it will be transformative for the economy. We have heard the arguments about the benefits it will bring in the education sector to medical centres and in commerce. 
It is a fact that a number—in fact I think most—of our major hospitals are already connected by ultra-fast broadband. Cables are already in the ground. Fibre is already in the ground that connects a number of institutions and that certainly connects the central business districts of some of our major cities. But we are talking about an intention to lay out literally thousands of kilometres of fibre in order to provide better access. Although there has been no major economic study for us to point to that demonstrates the benefits to a certain extent if we look around the world and at places where changes of this nature have been brought about before we see that people tend to absorb the services. New technologies develop that give rise to new uses as people see opportunities to develop and to provide services. 
Although I am reluctant to be supporting this bill given the lack of economic analysis I have listened to the Hon Steven Joyce and his arguments in support of the bill and I have listened to others in the commerce health and education sectors who do believe that it will be transformative and who do believe that services will be provided to New Zealanders that otherwise would not be provided. 
I guess one can look at entrepreneurs such as Sam Morgan and Rod Drury who have recently announced publicly that they are supporting an investment in Pacific Fibre to provide additional international links. I look at their investment and I see them showing that this technology needs to be developed and that if we provide it there will be commercial customers for that capacity. 
I also think of small business New Zealand. I think of small businesses. I am speaking tomorrow at a seminar—as are a number of MPs in the House. It is a conference for supporting small business. It is said that New Zealand is a country of small businesses. We do not all work in central business districts; we are not already connected by cables provided by Vector Unison and other fibre-optic companies around the country or by TelstraClear in the case of Wellington. A number of our businesses and business people work from home. They are a disparate group. All around the country people work from home. Their businesses are spread out. Without the commitment to providing the necessary infrastructure there may be businesses that will not have the chance or the ability to get ultra-fast broadband. 
Who is to know the potential? Who is to know what could come from an investment like this? Yes we are uncertain but I have to acknowledge that another consideration in our decision to support this bill this afternoon—certainly for the three of us who are supporting it—is the fact as Clare Curran said this afternoon that ultra-fast broadband was a key priority of the National Party before the election. We cannot forget the fact as Clare Curran reminded us that it was No. 2 on the National Party’s pledge card. ACT represents just under 4 percent of the party votes cast in the last election. 
Hon David Cunliffe 
: Ah bye-bye principle. 
Hon JOHN BOSCAWEN 
: That is right I tell Mr Cunliffe; that is right. We recognise that 46 percent of the population of New Zealand voted for National and although we have been strongly outspoken and have voted against issues such as the emissions trading scheme—and the marine and coastal legislation for that matter—we recognise the fact that the National Government is very popular. It has a 46 percent mandate so we ask ourselves whether it would be wise to stand up and ignore that. Let me touch on— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I point out to the member on my left Clare Curran that Speakers’ ruling 61/5 states that running commentaries are out of order. If the member wants to make a speech she can do so. 
Hon JOHN BOSCAWEN 
: One of the issues that Clare Curran raised this afternoon is the role of Telecom and that is certainly a concern we have. We are very conscious of the fact that Telecom has a massive investment in copper. It is being asked to invest its own money along with the Government’s money to lay fibre from the cabinet to the home or past the home. We have to ask why that company would want to do that. Why would it want to do that when it does not have the incentive to do it? 
This contract provides requirements for performance and penalties if the company does not meet those performance requirements. I would like to put our support on notice this afternoon—unlike Mr Mallard who is saying “Let’s tear up the agreement. Let’s tell all of the infrastructure investors around the world that if there is a change of Government we will tear up Government contracts.” No the ACT Party would not do that; we would enforce those Government contracts. We would enforce them. But I say to Telecom that to the extent that there are deadlines in the contract and to the extent that there are obligations in the contract—and there are many obligations and many deadlines—we will not expect Telecom to come back and seek variations. We will not expect Telecom to come out and try to avoid its obligations. We would expect Telecom to meet its obligations in the agreement in exactly the same way that we expect the Government to meet its obligations. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker Robertson. Nga mihi nui ki a koe i tenei ahiahi. The Maori Party proudly stands in support of the Telecommunications (TSO Broadband and Other Matters) Amendment Bill which amends the Telecommunications Act 2001. We support the implementation of the Government’s policy programme for the telecommunications sector. 
This legislation is a key example of the impact of a strong and independent Maori voice sitting at the decision-makers’ table. I start by acknowledging the inclusion of the specific consideration of Maori interests through the establishment of a national Maori broadband working-group which will enhance meaningful and appropriate Maori participation in this sector. The extension of the powers of Nga Pu Waea into ultra-fast broadband in urban areas was specifically negotiated by the Maori Party co-leader the Hon Dr Pita Sharples with the Minister for Communications and Information Technology. Nga Pu Waea is the result of a submission by the Maori Economic Taskforce and shows the confidence the Government has in its recommendations and in having the Maori Party voice right at the top table. 
The membership of this group includes representatives from Maori information and communications technology interests including Te Huarahi Tika Trust Te Putahi Paoho Wai 2224 claimants the Maori Economic Taskforce and the Iwi Leaders Forum. The seven members of Nga Pu Waea are Jeremy Gardiner Daphne Luke Mavis Mullins Haami Piripi Antony Royal Tuwhakairiora Williams and Richard Orzecki. 
For Maori the Rural Broadband Initiative has a significant benefit in connecting whanau hapu and iwi and connecting marae runanga wananga kohanga kura and Maori providers through the use of broadband technology. It will provide for greater expression of kaupapa tuku iho increased commercial and social activities and improved coverage of te reo Maori. 
The working-group called Nga Pu Waea will firstly develop options for maximising coverage and connectivity to marae wananga kura kohanga runanga and other Maori organisations through rural broadband; secondly establish and implement trade training programmes and employment opportunities for Maori through the initiative; and thirdly ensure relationship brokerage with Maori at community regional and national levels to support among other things economic development opportunities including investment opportunities and community-wide education. Nga Pu Waea will be able to provide experience and expertise in Maori economic development through information and communications technology through the dynamics of Maori stakeholder engagement through industry knowledge and relationships through an understanding of the roles of information and communications technology in supporting the promotion of the Maori language and culture specifically and through Maori development in general. 
We welcome this bill in that it will increase coverage and connectivity to marae wananga kura kohanga reo runanga and Maori providers. We are pleased to support this bill because it will enable the establishment of trade training programmes through wananga and employment opportunities for Maori. The bill will also provide specific partnering opportunities for Maori and iwi in relation to design and building services land access and using existing infrastructure and services. Finally we welcome the legislative change to facilitate Maori or iwi investment in the rural broadband sector. 
People out in the real world might ask why we support this bill. What does it mean for them? Obviously that does not matter to the Labour Party but for Maori it is quite important. That is why we have gone with this kaupapa. The concept of communications is obviously important and it is paramount in this day and age. Ninety-nine percent of people have access to the internet. Good connectivity to the outside world is therefore important but there are other aspects of this initiative that make the development relevant to a general audience. Economically information and communications technology is key infrastructure that brings with it jobs jobs and more jobs. As a result of this bill 93 percent of rural schools will receive fibre enabling ultra-fast broadband speed with the remaining 7 percent achieving moderate speeds. As a result of this legislation over 80 percent of rural households will have access to broadband. 
This bill is a vital platform for Aotearoa moving into the future. The Maori Party is pleased to support the bill and we greatly appreciate the willingness of both the Minister and the Government to enter into an arrangement with the Maori Party that is so very constructive for whanau hapu and iwi. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 Malo le soifua. Today is a day of thanksgiving. It is a day of thanksgiving because the Telecommunications (TSO Broadband and Other Matters) Amendment Bill is a pivotal bill that will transform our country. It will transform our country because it will increase and improve the way that we are able to communicate with each other. Whether one is in a business whether one is in a health clinic or whether one is in a school this bill will improve the way we are able to communicate with one another. 
This bill rolls out ultra-fast broadband—100 megabits per second—to 75 percent of New Zealanders across this country. It will be rolled out to where they live where they work and where they study. 
We have heard today from Labour members that they are against this bill. They are against the fact that this will improve productivity in this country. They are against the fact that this bill will improve the way that we communicate. It will improve economic growth and provide jobs and opportunities into our future and the Minister for Social Development and Employment agrees with me. 
We know that this is a step change. It is part of this Government’s economic plan to improve the economy to provide jobs and opportunities and to lay down the infrastructure for this country to go into the future. I found it interesting that in the debate today we have heard from members opposite name-calling and the use of derogatory terms such as “cowboy” and “Minister of Miscommunication” but those members did not talk about the issues. They have not talked about the benefits that this bill will bring to our businesses our health services and our schools. The bill will improve the way that we communicate. It is fundamental. 
Stuart Nash 
: How? 
PESETA SAM LOTU-IIGA 
: Does that member not know what 100 megabits per second does in terms of downloading off the internet? I found it quite interesting this morning that the Labour spokesperson on telecommunications asked the Minister of Commerce whether he was in charge of competition issues for telecommunications. After 2½ years that woman does not know that the Minister for Communications and Information Technology is responsible for competition issues relating to telecommunications. Members opposite would like us to trust them but that member does not know that fundamental fact. 
I will concentrate on what this Government is doing. What we are doing is positive for our communities. This bill will bring about transformation and I commend it to the House. 
STUART NASH (Labour) 
: 
 If this bill is the only plan that that Government has for economic transformation then heaven help us—heaven help us. 
Hon Paula Bennett 
: Same old speech. 
STUART NASH 
: The Minister says “Same old speech.” but that is because it is the same old message. We keep hearing all these things about the Government having a plan for economic growth—it is to sell State assets it is to create a telecommunications monopoly and it is to not listen to the people. 
The Government needs to start listening to the people of New Zealand and I do not know when that will happen. This legislation absolutely proves that one Minister with one agenda drove it straight through this House—straight through this House. He was not interested in communication whatsoever. Mr Bennett had the nerve to stand up and congratulate all submitters to the Finance and Expenditure Committee. He said: “I would like to congratulate all submitters who contributed to this bill.” I tell this House that only one submitter supported this bill and that was Telecom surprisingly enough. Nearly all submitters were against this bill. I am not too sure whether Mr Bennett’s words were dripping with irony; I am not too sure whether he was rubbing salt into the wounds just to say: “We won. You lost. Eat that!”. I am not too sure what he was trying to do but thanking those who were being screwed was a little bit nasty I tell Mr Bennett; it was just a little bit nasty. 
The other thing I will say is that Sam Lotu-Iiga once again got it wrong. Sam said Labour is the party that is against competition innovation and driving this economy forward. That member has obviously forgotten that Labour was the Government that set up the Digital Strategy. We were the ones who recognised that in order to drive economic growth forward and in order to improve productivity one needs a decent digital strategy. So we set it up but we also made sure—and we were really good at doing it—that we went out to the community went out to the main players and consulted. We talked to the people who would be affected from the real big guys down to the consumers just to understand the market just to find out what it required. That is what Labour does really well and that is what National always fails to do; it fails to consult those who will be affected. 
Then John Boscawen spoke—goodness me! It just shows what disarray the ACT Party is in. John Boscawen called Heather Roy by Hilary Calvert’s name. I am surprised Heather did not stand up and take a call to say she took personal offence at that. I found that astounding. We have a party that is held up by two very senior MPs. Sir Roger Douglas for all his faults—and they are many—sat on the select committee and listened to the arguments very closely. He understood them and wrote a minority report that basically said that this was flawed legislation. 
Hon Heather Roy 
: Good minority report. 
STUART NASH 
: It was a very good minority report. As the ACT member on the select committee he took the report back to the ACT caucus and said that they should not vote for this bill. Heather Roy—and we are so far apart in terms of our politics but it does not mean that I do not respect her intelligence and it does not mean I do not respect her principles—actually listened to Sir Roger. She listened to Sir Roger Douglas and said: “This is the man whom we chose to represent us on the Finance and Expenditure Committee for this bill. He has written this report and I will stand by it.” Well we finally heard why ACT Party members will support this bill. 
Clare Curran 
: Because they’re lapdogs. 
STUART NASH 
: Because they are lapdogs. John Boscawen stood up and said that the reason the ACT Party is supporting this bill is that it was No. 2 on the National pledge card. He admitted it. We have now shown that there are two ACT members with principles—even though like I said we completely disagree with their principles. There are two ACT members who act with principle and three who are there because they are lapdogs and they are voting for this bill because it was No. 2 on the pledge card. That party was founded out of—totally misguided—principle. 
Sir Roger and Heather Roy will carry that party into the next election. I hate to think of the workload that Heather Roy will be forced to carry as she goes around the country explaining what has happened to the ACT Party. But goodness me she will be a very busy MP for the next 5 months. Unfortunately I think she is in a party that is now devoid of all principles and the electorate has finally seen that. It is a sad end for Heather. She will probably come back; I do not know—will she be No. 2 on the list? What a sad end. Anyway I think it is a shame that the ACT Party apart from Heather Roy did not listen to Sir Roger Douglas. 
Then we had Maori Party members standing up and once again how were they bought off? Because there will be a working group. There will be a Maori broadband working group. Well that was pretty easy—that was pretty easy. I would have thought that the Maori Party would demand that not 75 percent of New Zealand but 95 percent of New Zealand would benefit from this bill. Mr Joyce told this House that 75 percent of New Zealanders will benefit from this bill. I tell the Maori Party member Te Ururoa Flavell that every single school in Wairoa will not benefit from this bill. I tell that member that the vast majority of those pupils in Wairoa are Maori. 
This bill is not good for Maori; it is not good. I cannot understand why the Maori Party continues to back legislation that does not support its people. I am astounded—I am astounded. 
Te Ururoa Flavell 
: I raise a point of order Mr Speaker. In terms of disruption to the House I tried to ask the member to pronounce “Maori” properly and I interjected a number of times to try to assist him. If he could at least listen to this discussion and pronounce “Maori” properly that would be helpful. Thank you very much. 
Mr DEPUTY SPEAKER 
: I hear what the member says. I remind the member that this is a third reading speech. I refer the member to Speaker’s Ruling 117/3 which states: “Members must confine themselves to the main purposes and contents of the bill;”. That is Speaker’s Ruling 117/3—the member might like to take note of that. The point of order is a very valid one. We ask that you do the best you can to pronounce terms correctly. 
STUART NASH 
: Can I speak to that point of order? 
Mr DEPUTY SPEAKER 
: No the member will continue with his speech. 
STUART NASH 
: I raise a point of order Mr Speaker. It is not related to that member’s point of order. I understood—and I cannot point to a reference obviously—that if members in a third reading speech make contentious points against the Opposition then members have the right of reply. All I was doing was exercising that right. 
Mr DEPUTY SPEAKER 
: The member has certainly done that and he has done it for 6 minutes. I am asking the member to now come back to the third reading speech. 
STUART NASH 
: One thing I would like to say is that Labour absolutely understands the need for a strong and robust telecommunications infrastructure. Napier—I mean the Labour Party completely understands this. 
Michael Woodhouse 
: The “Napier Party”. 
STUART NASH 
: I have Napier on the mind. Napier is coming back to Labour; I can feel the pull! 
There is some legislation that can have cross-party consensus and that we should be able to work on together. If we did work together we would come out with fantastically robust legislation that would drive economic growth forward for this country. This is that sort of legislation. This is what should have happened. This is legislation that both major parties should be agreeing is wonderful for New Zealand. Mr Joyce could have achieved that if he had sat down with Labour and gone through the bill. That could have happened if we had had cross-party consensus on the very important parts of this bill but the Minister just rammed it through. 
I can say that answers to written questions reveal that Minister Joyce neither sought nor received any official advice from the Ministry of Economic Development or Treasury on the economic costs and benefits of ultra-fast broadband—none whatsoever. We do not know whether this $1.5 billion of taxpayers’ money will be well spent. I suppose that comes down to the crux of our arguments in opposition to this bill. We are spending a lot of money. We are spending $1.5 billion of taxpayers’ money. We are fundamentally changing our telecommunications infrastructure in this country. This is not some bill regulating the use of cars or dogs; this is about a fundamental part of New Zealand’s infrastructure and I believe the process has not been well followed. A major Supplementary Order Paper was introduced to the select committee without sufficient time to have full submissions on it and another 12-page Supplementary Order Paper was whacked on the Table in the Committee stage. It was like urgency without urgency because no one had the ability to submit on it or comment on it. This is simply bad process. 
I understand and we understand the need for urgency on this because this is vital to our productivity. It is vital to our connectivity but it does not need to be rushed through. If it had taken an extra 6 months but that meant we got it right then that would have been fine. We could have accepted that. But the process here has been really really bad. That was highlighted by the Greens speaker and it has been highlighted by every Labour speaker. It was actually highlighted by Sir Roger Douglas. That is the fundamental problem we have. We are all in agreement that we need ultra-fast broadband. No one will ever disagree that we need a really strong good and very robust telecommunications infrastructure. But this bill does not deliver that. That is the major concern I have. To make matters worse a whole lot of questions for Mr Joyce from our spokesperson have not been answered. They simply have not been answered in a way that makes us feel comfortable about this. I certainly cannot support this bill. 
MICHAEL WOODHOUSE (National) 
: 
 In about 1995 when I was at Dunedin Hospital I watched a video. It was a video of the hospital of the future. It followed a mythical day in the life of a cardiologist at a large hospital in the United States as she went around the bedsides of heart-attack patients with her handheld device. She was prescribing online taking blood tests and getting results back. A video screen would pop up and a general practitioner from hundreds of miles away would tune in to a patient with cardiac symptoms. The ECG would be uploaded in seconds and the cardiologist was able to diagnose that the patient was not in fact having a heart attack. 
All of this was at that time a hospital of the future. I can say now that that is a hospital of the past because the technologies that looked so space-age in 1995 are actually in place in hospitals all around the world except in New Zealand. The technology that this bill will hasten—and I say “hasten” because some of the fibre-optic backhaul is already being laid—is fundamental to the future of our country’s economic and social well-being. I recall that fine member of Parliament the Hon Maurice Williamson saying that backhaul fibre-optics will be the equivalent of reticulated electricity for the 21st century and I absolutely agree with him. 
We do not know the possibilities; they are vast. So it is disappointing that Opposition members are bogged down in the minutiae of things they would not do—the policy differences—and are not looking at the principles and the aspirations. While the Government is looking to the future Opposition members are looking to the details of the bill and picking holes in it often where they do not exist—including the member for Dunedin South who is scaremongering about zone 3 schools. She is talking absolute irrational nonsense about those schools when she says they will not be well served. It is a shame. But this Government looks forward to the future. This bill is a very important part of creating that future and I support it. 
Hon DAVID PARKER (Labour) 
: 
 I rise to speak on the third reading of the Telecommunications (TSO Broadband and Other Matters) Amendment Bill. 
Hon Maurice Williamson 
: That’s good because that’s the one we’re on. 
Hon DAVID PARKER 
: I thank Mr Williamson for his very lucid contribution. It actually made more sense than most of his contributions in this House. 
Hon Maurice Williamson 
: Oh that’s— 
Hon DAVID PARKER 
: That was a bit unfair and I retract that statement. 
We have heard from prior speakers that Labour is disenchanted with both the process and the content of this bill. I want to reflect on what I think is the poorest aspect of this bill which relates to the uncertainty we still have as to the future regulatory environment in respect of broadband in this country. The bill as it was introduced to the House had a proposal that ousted the jurisdiction of the Commerce Commission. That proposition was widely criticised at the Finance and Expenditure Committee by almost everyone except Telecom. Those who criticised it included both consumer representatives and other industry competitors. Why did they criticise it? They criticised it because they said that the existing telecommunications law provided a framework that ensured they had at least an ability to compete with the dominant supplier in New Zealand Telecom and that those protections were found in the Commerce Act. They said that they have had decades of problems with the dominant Telecom exercising its dominant position to their detriment but that in recent years they had made progress in competing against Telecom by relying on the changes to the law and by way of using the powers that the Commerce Commission has if there is improper conduct—that is uncompetitive practice by Telecom or any other party using its dominant position. 
The effect of the proposed changes in the bill was to oust the jurisdiction of the Commerce Commission. The other competitors said that that put at risk their ability to compete in the market because they could be subject to uncompetitive practice which could effectively make them unprofitable in areas or make the risks too great for them to have confidence to invest in these areas and therefore they would not invest in these areas. As a consequence the New Zealand consumer as well as those competing companies would be worse off because they would face inappropriate conduct or the risk of inappropriate conduct by Telecom without having an effective remedy. 
The Labour Party was convinced that that was right the ACT Party was convinced that that was right the Green Party was convinced that that was right and the Maori Party was expressing nervousness about that as well. Despite representations by all of the submitters and by the other political parties no change was made to that legislation at the select committee. 
Hon Steven Joyce 
: Because you didn’t have one. 
Hon DAVID PARKER 
: No change was made at the select committee. The Minister for Communications and Information Technology just piped up and chirped that that was because we did not have one. Well he has been in Government for 2½ years and he is saying that he did not have a solution at the time of the select committee. 
Hon Steven Joyce 
: We found one. We found the solution. We found one. 
Hon DAVID PARKER 
: Now he has chirped that he found one. Well what he found was a convenient solution to get him out of the political dilemma that he faced which was that he was not delivering on his pre-election commitment to roll out broadband in New Zealand. 
What happened was that the bill came back to this Parliament without amendment. The bill came back to this Parliament without amendment and then the Minister— 
Hon Steven Joyce 
: Come on. Vote for broadband. 
Hon DAVID PARKER 
: —without amendment in respect of this important issue—and then the Minister had a road to Damascus experience. He had found some new solution. He had found some new solution that had not been apparent to him or to his officials during the previous 2½ years. That is what he would have this House believe caused him to change this legislation by way of a Supplementary Order Paper. The alternative view of that history is that his Cabinet colleagues and officials having heard the criticisms of what was being proposed were nervous that they could not carry it off that they would not get the votes for it so they changed their position and instead of ousting the jurisdiction of the Commerce Commission have left a jurisdiction for the Commerce Commission. 
Yesterday in the Chamber the Minister criticised me for saying that we are unclear as to the effects of the contractual substitute he has for protecting Telecom from the consequences of Commerce Commission intervention. I cannot be certain whether I am correct in what I said in the Chamber yesterday because I have not seen the contract with Telecom—none of us has seen the contract other than the Minister who may have seen drafts of the contract with Telecom—but none the less he criticised me for misrepresenting the nature of that contract. 
Hon Steven Joyce 
: That’s right. 
Hon DAVID PARKER 
: “That’s right.” says the Minister. He has confirmed that criticism. The problem we have in this Parliament is that we do not know the exact terms of that indemnity or top-up payment that is promised to Telecom. 
Hon Steven Joyce 
: It would help if you read the bill. 
Hon DAVID PARKER 
: I tell the Minister that it is not clear from the bill what the provisions of that contract are and the terms of that contract have not been released to us. So we are being asked to pass this legislation on the promise from the Minister that we should trust him. I am not saying he is untrustworthy in a dishonesty sense; I do not want to make that implication—let me make that clear to the House. But we are being asked to trust his judgment on that matter. We are being asked to trust his judgment on that matter notwithstanding the mistakes made earlier in the process that I have already articulated and notwithstanding that we cannot see the contractual provisions that we are told affect this situation. 
We are being told that the effect of these provisions would be to make up the lost revenue. I am not being told that by the Minister; we are being told in the newspapers and by some of the industry competitors that the effect of these contractual provisions will be to make up the loss of revenue that Telecom might suffer in the future should it be the subject of regulatory action by the Commerce Commission. So if that is right—and the Minister says it is not but he will not produce the contracts to show that it is not; he expects us just to take it on trust—the effect of that would be that what the Minister cannot achieve by way of legislation in this Parliament because this Parliament will not pass legislation that gives Telecom a blank slate in terms of future competitive practice in the absence of Commerce Commission intervention he will achieve by resorting to a contractual route that gives comfort to Telecom. I think it is pretty obvious that it would be improper for the Minister to do through contract what he cannot achieve through change to the legislative practice. That is why we in this House have asked for disclosure as to whether that is the case. 
I want to turn to a couple of other points. The first point is obvious. Despite the fact that prior to the last election the Minister promised that by this time broadband would be rolled out in many parts of New Zealand we have not had that. We are actually still dealing with the paper rather than the physical fibre that delivers faster broadband access. The second point is that at no stage did he tell the public of New Zealand that in order for him to achieve his broadband roll-out those people who were not using it would have to pay for it. That is effectively what is happening here. I am told that the cost of copper-based connections is expected to increase as a consequence— 
Hon Steven Joyce 
: Oh rubbish! 
Hon DAVID PARKER 
: Rubbish? The Minister says that is rubbish. Well we will put that on record through  
Hansard 
 
and we will see whether in the future as a consequence of this— 
Hon Steven Joyce 
: You’re making it up David. 
Hon DAVID PARKER 
: No I am not making it up; I am repeating what has been told to me I say to Minister Joyce. The Minister says it is incorrect; well I hope he is right—I hope he is right. If the alternative is that there will be an increase in the price of copper-based access to the internet that is not something people were warned about and that is one of the things industry participants have been saying. I am not the Minister and I do not have the same quality of information that he does so it is possible that he knows better in respect of some of these areas than I do and I concede that. But in respect of the issue as to competition practice I do not accept that he is better informed than the rest of this House. That is why the rest of this House did not agree with the ouster of the Commerce Commission jurisdiction. 
I also want to refer to the way in which the Government has now garnered the Maori Party vote. The Maori Party says it is voting in favour of this measure because it has agreement from the Government to set up a working party to consult on broadband delivery for iwi. Well again for me that sort of has shades of the deal that was done in respect of changes to the emissions trading scheme. If the effect of that working party— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable member. His time has expired. 
JO GOODHEW (National—Rangitata) 
: 
 It falls to me to end on a very positive note. Boosting infrastructure is one of National’s six points for a much stronger economy and boosting broadband is part of this initiative. Rural communities and schools will have access to fast broadband services via our Rural Broadband Initiative and my electorate of Rangitata says thank you. We are delivering on our election promise to bring ultra-fast broadband to 75 percent of New Zealand and my electorate has said thank you. I commend this bill to the House. 
A party vote was called for on the question  
That the Telecommunications (TSO Broadband and Other Matters) Amendment Bill be now read a third time. 
Ayes 65 
New Zealand National 58; ACT New Zealand 3 (Boscawen Calvert Hide); Maori Party 3; United Future 1. 
Noes 52 
New Zealand Labour 40; Green Party 8; ACT New Zealand 2 (Douglas Roy H); Progressive 1; Independent: Carter C. 
Bill read a third time.