Joyce Steven: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Third Reading 
Joyce Steven: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Third Reading 
[Volume:673;Page:19684] 
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.