Parker David: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — In Committee 
Parker David: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — In Committee 
[Volume:673;Page:19570] 
Hon DAVID PARKER (Labour) 
: 
 The history of Part 2 of the Telecommunications (TSO Broadband and Other Matters) Amendment Bill is illustrative of the poor process that the Government has been running. The Finance and Expenditure Committee considered the legislation. Various parties including the Labour Party were concerned at the suggestion that the Commerce Commission would have no jurisdiction following the passage of Part 2 which inserts new Part 4AA into the primary legislation the Telecommunications Act. Considerable pressure was brought to bear through the media which said that it was quite unwise of the Minister for Communications and Information Technology to contemplate an absence of regulatory oversight of this new area of undertaking.  
Labour wrote to the Minister and said that we needed to talk about this matter. We wrote a very reasonable letter I thought expressing our concern and asking for a response from the Minister which we never got. We then wrote again to say that it was time we got a response. It was by then too late by the design of the Minister to make amendments at the select committee so the bill was reported back with these inappropriate provisions that said there should be no regulatory oversight. The Commerce Commission was precluded from doing things that it could otherwise do.  
The Minister then said publicly that he would back away from those provisions I suspect partly because there was doubt as to whether he could pass them in this House because concerns were being expressed not just by Labour and the Greens but also by the ACT Party and the Maori Party as to whether what was being proposed by the Minister was wise. We then thought we would get to a reasonable place where we would have some regulatory oversight post these new arrangements.  
I have no problem with long-term contracts being entered into with Telecom. What I have a problem with is effectively the ouster of any jurisdiction that could look at whether what will then be the dominant player is abusing its position in a way that is not in the interests of competitors or consumers. So I was then surprised to hear that the amendments set out on the Minister’s Supplementary Order Paper 247 would remove some of those offensive provisions relating to the ouster of the jurisdiction of the Commerce Commission. But then we were told—and we have yet to see—that similar-effect provisions are being inserted into the contracts themselves.  
I ask the Minister in the chair the Minister for Communications and Information Technology to take a call on whether as we have seen in news reports an indemnity is proposed to be given in the contracts with Telecom that indemnifies Telecom for all losses that might be occasioned to it as a consequence of future regulatory action. These things may have been misreported in the newspapers but I am not in a position to judge whether that is the case; I have not seen those contracts. But if there is an undertaking that the Crown will indemnify Telecom in respect of all of those risks then I ask the Minister to justify that.  
If the Minister cannot convince this House to pass legislation to oust the jurisdiction of the Commerce Commission—and some jurisdiction is left with the Commerce Commission—then why does he think it is right that in the contract he can effectively override what would be the statutory provisions by providing for a contractual term to the same effect? If that is the effect of what is being proposed then I expect some of the competitors of Telecom are considering whether the Minister actually has the power to do that. It would be very surprising to me that Parliament would not agree to effectively oust the jurisdiction of the Commerce Commission but that the Minister could have such broad powers that he could do just that by contract. Even if that is right as a matter of law then I ask how that could be right as a matter of principle—that the Minister could by contract give an indemnity in respect of those matters. 
There has been some misrepresentation of Labour’s position on this bill. It has been suggested that Labour would break contracts. We have not said that. What we have said is that we would review the regulatory regime to make it clear that the regulator has the right to assess according to sound and standard regulatory practice whether the conduct of Telecom—and indeed the conduct of the Minister given that the Minister has said he will try to take these contracts beyond the law—breaches fair regulatory standards and that if it did then the consequences would flow according to that legislation. That is not the same thing as Labour saying that we would break the contract. We are not saying that. We are saying that the regulator should have the power to regulate monopoly excess. If there is no monopoly excess in the future no one has anything to fear.  
I again stress that this is not to say that long-term contracts are inappropriate. Long-term contracts are necessary in order to give contractual certainty to the parties in respect of these important capital investments that they are making. Indeed the long-term interests of consumers already pay regard to the fact that one can have long-term contracts that are in the long-term interests of consumers. So I want to hear from the Minister why he does not think it is now appropriate to have legislation that ousts the jurisdiction of the Commerce Commission to give a remedy to consumers who might be abused by uncompetitive monopoly practice. If he is of that view—presumably that is why he has removed these provisions from the bill—then how can it be appropriate for him to do the same thing in effect by contract?