Joyce Steven: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — In Committee 
Joyce Steven: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — In Committee 
[Volume:673;Page:19573] 
Hon STEVEN JOYCE (Minister for Communications and Information Technology) 
: 
 I take a call to answer a few of the issues raised in the debate so far on the Telecommunications (TSO Broadband and Other Matters) Bill. Firstly the equivalence of inputs issue that was just raised by the member David Cunliffe is important but it is important to note that in terms of the two layers he talked about there is a non-discrimination requirement within Chorus between layer 1 and layer 2 which is being monitored and enforced by the Commerce Commission. It is a good story I say to Mr Cunliffe but it does not actually hold any water.  
The full equivalence of inputs is not required until 2019 for a number of reasons. I will run through them for the member’s benefit. Firstly there is a lot of debate internationally in this new environment—and I stress that it is a new environment—in relation to the technical methods for unbundling of point-to-multipoint fibre. It is still being worked through internationally and implementing it currently would add very significant costs to the build.  
It is fair to say also that the demand for unbundled residential services is uncertain. In fact if we unbundle layer 1 at this point we may end up creating another monopoly because of the way the electronics work. I had quite a discussion with the former UK telecommunications Minister Lord Stephen Carter whose view was that layer 2 was probably the appropriate approach at this point to get the best competition outcome. That approach has been followed a lot internationally. Requiring unbundling at 2020 will give local fibre companies and industry sufficient time to develop an appropriate unbundling solution for this part of the network.  
The member missed a number of other points. Firstly I find it difficult to be brought up by Labour members on this matter because it took them about 7 or 8 years to get to the same point with operational separation. We will not even talk about mobile termination rates which they went on about at great length before they eventually handed the issue over to another Government to do something about.  
In terms of rewriting history I also listened to Mr Parker’s discussions about regulatory forbearance which I think is important. He said Labour had sent a letter to the Minister got no response sent another letter but it was too late. That is not correct as Mr Cunliffe and Ms Curran know because there were a number of discussions. The regulatory forbearance issue was very difficult for everybody and the reason I know it was difficult for Labour members was that I actually asked them to come up with a solution that would help to solve the problem. They borrowed from one of the industry lobby groups a solution called special access undertakings and they said that was the answer. But when we had a look through it we saw that it either achieved nothing or achieved exactly the same outcome as regulatory forbearance.  
I accept that we made the change at a late stage but the reality was that nobody had the answer until we came up with it in consultation with the Maori Party. It is an answer that will keep the Commerce Commission on top of those price issues notwithstanding the fact that it is not likely to have any impact given the very competitive prices. It will also provide a mechanism that will allow investors to invest and offer lower prices than they would otherwise be able to offer. I thank Maori Party members for their support on that. They had a singular focus on keeping prices down for consumers. That was also our focus. It was about balancing those objectives.  
It is a public-private partnership. I remember that members of the previous Government had a view that they would like to have public-private partnerships but never actually got around to one because they could not understand how the partnerships worked. One has to provide some certainty to investors to enable them to offer good prices and good conditions so that consumers get the benefit and that works very well.  
I go back to address a couple of the issues raised by Ms Curran. Firstly I would love to talk all day about content and demand but I note for her reference that it is out of scope for this section of the bill. It is also important to note that the open access regime is very much in place and perhaps for her benefit I note that forbearance has been removed which should save some time later on in the debate.  
It is very important we get the regulatory framework right. I believe we have done so. I always think it is amusing that Labour members want to take more time over everything but then criticise us for how long it has taken. It is a very good deal it is supported by a large majority of New Zealanders and I think it is very exciting. The parties in the Chamber who are supporting this bill understand the importance of ultra-fast broadband for New Zealand. Thank you.