Cunliffe David: Telecommunications Amendment Bill — Second Reading In Committee Third Reading 
Cunliffe David: Telecommunications Amendment Bill — Second Reading In Committee Third Reading 
[Volume:636;Page:7129] 
Hon DAVID CUNLIFFE (Minister of Communications) 
: 
 I move  
That the Telecommunications Amendment Bill be now read a second time 
. In speaking to the second reading of this bill let me first thank the Finance and Expenditure Committee which has worked hard to report this bill back to the House within a timely fashion while ensuring that full consideration was given to the public submissions received. The committee also gave careful consideration to structural and operational separation issues as requested and this matter has been dealt with in this bill. May I acknowledge perhaps unusually but with genuine appreciation the constructive roles of all parties including the National Opposition in considering this bill. In my view the select committee benefited not only from able chairing and good inter-party dialogue but also from the presence around the committee table of not one but two former Ministers of Communication the Hon Paul Swain and the Hon Maurice Williamson who had no doubt heard it all before. 
This bill marks a new era in telecommunications in New Zealand. History is being made today. What some people said could not be done is being done. What some people said would not work is being given the opportunity to work and the signs are already strongly indicating that it will work well. This is a landmark bill because we are equipping New Zealand for a new age—a digital age; an age where the smart use of technology will determine our continued prosperity as a country and make economic transformation a reality. 
We are making this history today with a clear firm mandate from the people of New Zealand and I hope from this Parliament. The measures in this bill are a critical part of the Government’s economic transformation programme signalled principally in the telecommunications stocktake announced in May 2006 but also incorporating the outcome of the earlier 2004-05 implementation review of the Telecommunications Act. It is widely agreed that advanced broadband services are key to economic growth and the development of a knowledge-based economy. The Government understands that competitive telecommunications markets are essential to achieving the innovative knowledge-based economy of which we are capable. 
This bill seeks to promote incentives for investment in new infrastructure for both new and existing players. It is also designed to achieve a cultural change in the telecommunications industry. I note that the telecommunications industry has already responded to the reforms in this bill and is working collectively towards a new digital future. 
Let me take a moment to recap why we are taking these measures today. The telecommunications stocktake revealed that New Zealand is in the bottom third of OECD countries across a range of telecommunication services pricing and broadband take-up indicators. Specifically our connection speed offerings were on the average still too slow. Our standard upload speed has been too slow for many users and has inhibited some important applications in the development of advanced services. We are still one of the few countries where restrictive data caps have been the norm. OECD rankings on average per person investment in telecommunications infrastructure placed us 22nd out of 30 nations. Similarly the OECD’s mid-2005 rankings for the level of broadband uptake also placed us 22nd out of 30. Quite frankly those figures were unacceptable. It is just not a sustainable situation for a small smart country to be in. 
Further analysis showed that the status quo was inadequate to boost our broadband performance. It was clear that regulation was needed to deliver the competitive telecommunications markets for New Zealand needed to achieve economic transformation. This bill will provide for stronger competition both on the copper wire network or local loop and in complementary technology such as wireless mobile and satellite. 
This bill amends the Telecommunications Act 2001 to ensure the effective regulation of the telecommunications sector. This is necessary to ensure the Government’s objectives in telecommunications are met for the long-term benefit of New Zealanders. It implements the findings of two separate but related review processes—the telecommunications implementation review and the recent telecommunications stocktake. 
 The bill itself focuses on four elements: extending the range of bottleneck services subject to regulation; enhancing regulatory processes; empowering the commissioner to monitor industry developments and ensure regulatory compliance; and separation measures to promote further competition non-discrimination in wholesale markets and service equivalents. 
Firstly I turn to extending the range of bottleneck services subject to regulation. Regulated services are the heart of the regulatory regime. This bill brings New Zealand into line with international best practice by unbundling the local loop removing restrictions on the existing unbundled bitstream service and clarifying that wholesale bitstream can be purchased without having also to purchase a phone service—the so-called naked DSL. I am pleased to say that submissions to the Finance and Expenditure Committee on these matters were broadly supportive of these provisions. The select committee has made a number of amendments that usefully clarify the detail of these regulated services. 
In relation to enhancing regulatory processes it is important to ensure that the Telecommunications Commissioner can effectively implement the regulation of these services. The bill introduces new regulatory processes and enhances existing processes to ensure that service providers can get effective and timely access to regulated services. In particular the bill empowers the commissioner to set standard access terms and conditions for all access seekers at once rather than on an individual basis as previously required. It enables access seekers to obtain access to regulated services notwithstanding existing commercial agreements for the supply of regulated service. It provides for a quality of access by preventing prejudicial treatment by an access provider towards access seekers who seek regulated terms for services. The Finance and Expenditure Committee received a number of submissions on these matters and made some useful minor amendments that have been made to ensure the regulatory processes in the bill are fair robust and effective. 
In relation to empowering the commissioner the bill introduces a number of key changes to empower the commissioner to monitor and enforce compliance of regulatory obligations. The select committee received submissions on these provisions and made some amendments to ensure that an appropriate balance is struck between the fairness and effectiveness of the enforcement regime. The bill includes an information disclosure regime that empowers the commissioner to require access providers to prepare and publicly disclose relevant information about regulated services. It requires the commissioner to monitor the development and performance of telecommunications markets and strengthens and standardises the enforcement regime to ensure compliance with the regulatory obligations under the Act. 
In relation to separation measures the Telecommunications Amendment Bill introduces an accounting separation regime that will increase the transparency of Telecom New Zealand’s business operations. At my request the Finance and Expenditure Committee also received and considered public submissions on other separation measures such as structural and operational separation. The majority of submissions were generally supportive of a robust three-way operational separation of Telecom to promote competition and equivalence of access to key wholesale services particularly if this could be achieved with the cooperation of Telecom. It is pleasing that the committee has comprehensively addressed these submissions by amending the bill to provide a process for the Minister of Communications to settle an operational separation with Telecom following public consultation. The committee has also included firm and appropriate powers to enable the Minister and the Commerce Commission to ensure that a robust three-way operational separation will be achieved so that others are treated the same or in an equivalent way as Telecom’s own subsidiary in dealing with bottleneck and other wholesale services. The Government welcomes and supports the changes introduced by the Finance and Expenditure Committee and thanks the committee for its diligence and care in dealing with this important matter. 
In addition to the core changes I have outlined the bill addresses a number of implementation issues that have been identified through past experiences with the processes of the Act but owing to time constraints I will not go through all of those this morning. In conclusion the Telecommunications Amendment Bill is landmark legislation that will help New Zealand to realise its digital future. It will facilitate New Zealand’s transformation to a dynamic knowledge-based economy and society underpinned by values of fairness opportunity and security. The bill will promote competition innovation and investment in the telecommunications sector which has been identified quite rightly as a key enabler of New Zealand’s economic transformation. The reforms in the Telecommunications Amendment Bill will speed the realisation of those goals and more. The truly exciting aspect of the bill is the innovation and ingenuity that its presence is already releasing across the telecommunications sector and the broader high-tech community. 
May I take this opportunity to thank all members of the select committee who worked on the bill. I thank the chairman for his good work and thank a very hard-working team of officials and office staff who have really worked very hard to get this legislation through ahead of schedule. I commend this important landmark bill to the House.