Mallard Trevor: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
Mallard Trevor: Telecommunications (TSO Broadband and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
[Volume:673;Page:19481] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I would like to take the Minister to some of the detail of the Telecommunications (TSO Broadband and Other Matters) Amendment Bill and focus in particular on the sections that are near the end of Part 1. I refer first of all to the financial penalties. I ask the Minister for Communications and Information Technology why he has struck a $10 million penalty for the section 69L breaches—that is the failure to comply with or amend sharing arrangements. 
Telecom as we know—and we are assuming that Telecom and Chorus will continue their behaviour—has I think on 19 separate occasions been involved in negative court decisions as a result of its anti-competitive behaviour. I know Bruce Parkes and I quite like him. I know that it had a lot of expertise in doing that. But with the hundreds if not thousands of millions of dollars that Telecom stands to gain as a result of its anti-competitive behaviour I ask the Minister why he thinks $10 million for a breach of section 69L or in fact section 69R which is probably even more important—the line of business restrictions—is considered a sufficient fine. 
My view frankly is that something in the order of magnitude of $100 million might be the sort of disincentive that is necessary to stop Telecom or Telecom and Chorus from going back to the sorts of behaviours that unfortunately have characterised their existence over about the last 20 years. They have had a history of providing illegal blocks to reasonable behaviour and instead of doing what is reasonable and providing a good service they have relied on lawyers—generally unsuccessfully I might say—to reinforce their behaviour. It has cost the Crown a fortune in fighting them through the courts and every time that has occurred there has been a massive delay in terms of improvements in the quality of service to their customers. So why is the penalty only $10 million in that area? That is the question I have for the Minister. 
The next question I want to ask the Minister concerns taxation. I turn now to Subpart 6 and refer in particular to section 69XK and section 69XN which are the interpretation sections around the taxation effects of the demerger. Effectively this removes from Telecom the obligation to pay tax in the way that any other company in a similar situation and in a similar separation would. I ask the Minister whether he has added that into his calculations. 
The CHAIRPERSON (Lindsay Tisch) 
: The member is talking about taxation matters that are in Part 1A not Part 1. I will ask the member to come back to Part 1. 
Hon TREVOR MALLARD 
: I apologise. I went to Part 2 and then went to the part before it. I am happy to go back and talk about the requirements in respect of preliminary notice the process issues which are in new Subpart 3 of Part 1—specifically in new section 155E. It is probably my fault for working my way backwards. I sincerely apologise; I made the mistake of thinking that the part in front of Part 2 was Part 1 not Part 1A. Of course if there is a separate debate on that I will be willing to make my comments again. 
I am looking at the requirements in new section 155E—by the way clause 17B inserts new Subpart 3 into Part 1—around the process and the question of the method and the requirements in respect of preliminary notices. I ask the Minister whether the contact details outlined in new section 155E(2)(f) have to be physical details—whether a physical address for delivery has to be supplied as far as these contact details for delivery are concerned. It is a question of whether a physical address is required for delivery or whether email addresses could be supplied. It is a question of the access order which is referred to in new section 155E(2)(g). If the owner opts out on unreasonable grounds it is a question of whether there is as yet any case law in that area as to what is reasonable and unreasonable in relation to opt-outs which lead to the service provider applying to the District Court for an access order. 
So if someone wants access is it a matter only for the District Court to give an order or have we created a right of access to individuals? I require a little bit of forgiveness for going back into history but these access orders were originally reserved for Post Office employees. It was a matter of getting on to a property and getting an order to obtain material that would not otherwise be available. 
When the Post Office separated into PostBank New Zealand Post and Telecom these access orders were carried over to Telecom. There was a set of obligations and some of those enshrined by the Kiwi share and the ability for the Government to give instructions. Now that these instructions are being removed the question I have is whether we are giving wholly private sector individuals rights of access to people’s property. And what warnings will people get about that? Will they get a warning about the access when they sign up with a service provider? My understanding is that they will not because there will be continuity of service provision from the old Telecom to this organisation. 
I know that these days not a lot of people care very much about civil rights but I ask members to think about some of the farmers and whether they will be happy with these access requirements—the ability to access to their properties—being carried over to yet another organisation or two. It is not clear yet whether it is just the one organisation or whether it will be both organisations. My reading of it is that in this part it is one organisation but in the other part it is another. 
We think we will eventually have structural separation with two sets of shares sitting there. Already Telecom of course is a largely overseas-owned organisation. If we have the Kiwi share going away it is likely to be even more so. It is a question of whether we want an Australian Indian Chinese or Canadian-owned company to have access rights to our homes—to our homes—in the way that we were prepared to have the old Post Office officials coming in. 
It may be that this Parliament is relaxed about that idea and we do not care about it. I know that for some people of my generation and for a few people a little bit older the thought of Mao’s army walking into their homes and doing some inspections of that sort would cause considerable anxiety. But it might be that Parliament is now more liberal and more relaxed and we do not care about who wanders into people’s homes or who gets the access being set up under the processes in new section 155E. 
There is a question in respect of new section 155H in relation to access orders from the District Court. There is a question when there are multi-owner complexes which is referred to in new section 155H(1)(a) as to whether all of the owners have to be told or just one of them.