te Heuheu Georgina: Telecommunications Amendment Bill — First Reading 
te Heuheu Georgina: Telecommunications Amendment Bill — First Reading 
[Volume:632;Page:4073] 
Hon GEORGINA TE HEUHEU (National) 
: 
 Did I hear the Minister of Communications say he looks forward to our being a world leader? Well actually we all look forward to that but introducing this bill does not necessarily make it happen. Even if this bill works in the way the Government intends we will still be a long way off being a world leader. The reason is that so many other infrastructural issues need attending to. 
But National supports this Telecommunications Amendment Bill going to the select committee. It provides for local loop unbundling which has been the catchphrase for so many years now ever since this Government came into power in 1999. It has had a long gestation. Today the library provided me with all the investigations the Cabinet papers—it just goes on and on. “Sooner rather than later” is a phrase I think I also heard the Minister say. Well the record to date does not bear that out. 
Local loop unbundling we are told will allow competitors such as TelstraClear CallPlus and IHUG to access Telecom’s copper wires running into people’s houses and to offer services on a more equal footing. That is obviously to be welcomed. The bill contains the ability for the Commerce Commission to set the terms and conditions for competitors to access Telecom’s wires and to constantly monitor performance of the market. Currently it can respond only to issues formally raised by companies. The Minister can also recommend regulations to the commission but we hope the Minister would do that only in a constructive intelligent and sensible way. 
The bill also allows for the accounting separation of Telecom between its wholesale and retail arms. However Telecom announced this week that it would go further and voluntarily separate its operations. All I can say to that is “We’ll see.” The whole unbundling announcement was hurriedly announced by the Minister on 3 May. It was meant to be the flower of the Budget but is known now as the billion-dollar Beehive leak. I hope the shambles of that gigantic muck-up is not a pointer to the way that this Government manages what is definitely a very important process for New Zealand and for New Zealanders. 
National members support the bill going to the select committee but we have a number of observations that we would like to put on record. We would also like to express some reservations on behalf of the many doubters out in the community that this measure indeed will deliver what the Government says it will. For instance we want the Labour Government to come up with some evidence as to why it thinks unbundling is the panacea for broadband development in New Zealand. We want to see the results of a rigorous cost-benefit analysis that proves this measure is worth doing. We also look forward to the Telecommunications Commissioner Douglas Webb fronting up to the select committee to say why he recommended against it in 2003. We see that as somewhat of an anomaly but we do recognise that having the bill go to the select committee gives us an opportunity to explore those very important issues. We will be looking to ask the Telecommunications Commissioner what has changed since his recommendation in 2003. 
We also observe that a plethora of new technologies are streaming down the pipe that mean high-speed Internet will be delivered by a whole host of different means. We note also that Australia unbundled in 1999 and by 2005 it had made almost no difference. Korea is No. 1 in the world but it got there long before it unbundled. I also understand there is a strong correlation between GDP per capita and broadband penetration. So it is not as clear as the Minister purported to make it when he introduced the bill. There is also no real correlation between those who have unbundled and broadband penetration. 
Lastly in terms of expressing reservations and raising issues there are serious property rights issues here. We are wondering whether the Minister will make any statement on that matter. Will the Government be offering any compensation to Telecom shareholders? With the muck-up of the announcement we saw millions and millions of dollars of value wiped from those shares. That is not something to be taken lightly but we have heard nothing from the Government or from this Minister on that matter. So there are a number of issues that we want to explore and that we expect the Minister and the Government to address as we go through the select committee process. 
New Zealand is currently ranked 22nd out of 30 in the OECD ladder of broadband uptake. That is not acceptable. We call ourselves a developed nation amongst the group of Western nations but really honestly that is scandalous quite frankly. Minister Cunliffe had previously promised we would reach the top half of the OECD by 2007 which of course is just next year and the top quarter by 2010. However when the unbundling decision was announced he quietly moved those targets out to 2010 and 2015 respectively. We do not hold our breath too much because it is likely in terms of the way this Government manages most infrastructure issues and regulatory issues that there will be a change to those dates as well. We hope not but as I say we are not holding our breath to see the results promised by this Government. 
The Minister has also been backing off on the date when customers will see the benefits of unbundling. He initially said consumers would see the benefits by 2007 but more recently he has stated that the benefits would “take time” and that the “Full market effects of the reform may not be felt until 2007/08.” so I think that in that regard too we will see the date move out. 
Also we are told that the main thrust of the new investment will focus on densely populated and profitable urban areas. That is important. But we do ask then what about the benefits of competition moving from the cities out to rural areas? After all that is where a lot of our country’s wealth is generated and we do not have any certainty of the Government’s intention in that regard. Telecom has promised to continue investment in rural areas but we have seen it fight this process for so long now. Again we are not holding our breath but we hope for something better. 
National supports the first reading of the bill. We support access to quality high-speed broadband for all New Zealanders.They are as entitled as their global counterparts and citizens everywhere to be connected in today’s environment and to have access to the best in communications technology in especially their business lives and also their personal lives. We support infrastructure that boosts economic growth productivity and prosperity for the benefit of New Zealanders and that assists the country’s entrepreneurs exporters and business people who invest their resources to create jobs and wealth for all. Hopefully this move will see New Zealand move back into the top half of the OECD sooner rather than later. We also recognise that this unbundling has long been called for by many groups including competing telecommunications companies industry groups and the general public. For those reasons we support the bill but as I said we have our reservations.