Joyce Steven: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Second Reading 
Joyce Steven: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — Second Reading 
[Volume:673;Page:19293] 
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 second time 
. I begin by thanking the Finance and Expenditure Committee for its consideration of this bill. I acknowledge the submissions that have resulted in changes to the bill and also the Maori Party for its work to ensure that Maori maximise the opportunities provided by the Government’s broadband plans. 
During its consideration the committee considered a large and complex Supplementary Order Paper that allows for a structurally separated Telecom. By including Supplementary Order Paper 204 the committee recognised that structural separation will resolve many of the issues that have arisen in the past from a vertically integrated monopoly. The bill contains the regulatory framework for the Ultra-fast Broadband Initiative and the Rural Broadband Initiative and it enables the funding of the Rural Broadband Initiative. 
The key issue raised by the committee and by submitters in relation to the bill was regulatory forbearance as the bill prevents the Commerce Commission from regulating wholesale prices. Although I consider that the concerns raised were mostly theoretical officials and I have listened to the committee and have found an alternative solution that will give infrastructure builders confidence to stay committed to their low capped prices and that will give customers confidence that they will continue to get the best prices over the 8½-year build period. This alternative option relies on a key change made to the bill by the committee which was to bring forward the general review of the telecommunications regime to 2016. The committee made changes to improve the content transparency consultation and decision-making processes around the development of copper and fibre open-access undertakings. Penalties have also been increased from $300000 to $10 million for breaches of the fibre undertakings consistent with copper. These amendments give additional comfort to the sector about the robustness of the undertakings and the monitoring and enforcement of them. 
The committee has also required that the Chorus copper undertakings must specify reasonable time frames for the transition away from sharing of systems and services between Chorus and Telecom. This amendment is a pragmatic solution that encourages a move away from those sharing arrangements but that recognises that imposing arbitrary fixed deadlines may have resulted in forced migration from systems or services at the expense of service quality standards for access seekers and consumers or in complex and costly variations of processes. 
I also support the committee’s amendment to the definition of “equivalence” to make it clear that the Government’s intention is to apply the equivalence of inputs standard that applied under the Telecom operational separation regime. This will remove concerns that the previous definition watered down the important equivalence test. Further making it mandatory in the deed that all local fibre companies build their network equivalence of inputs ready for unbundling at layer 1 in 2020 will ensure that the new fibre network is being built for full open access and competition after the initial build stage. 
The committee’s amendments to the Commerce Act authorisations tighten the authorisations so that they cannot be used for arrangements outside those between the Government and Ultra-fast Broadband Initiative and Rural Broadband Initiative providers and make it clear that they are time-bound. I will be tabling a Supplementary Order Paper at the Committee of the whole House stage that will make the amendments to remove forbearance and other technical amendments to the bill that have arisen since the report back. 
This bill provides the regulatory framework for improvements in broadband that will be truly transformative to this country. The Ultra-fast Broadband Initiative will see New Zealand leapfrog its competitors and become one of the most connected countries in the world. Its broadband speeds will revolutionise the way Kiwi firms do business the way our kids learn and the way our health services deliver to us as patients. The Rural Broadband Initiative will deliver on the Government’s plan for vastly improved and affordable broadband services for rural New Zealand. Finally the bill also facilitates a dramatic improvement in the way New Zealand’s telecommunications industry is organised. I commend this bill to the House.