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Telecommunications Bill Third Reading Speech

Hon Paul Swain
Telecommunications Bill: Minister’s Third Reading Speech:

I move, that the Telecommunications Bill now be read for a third time.

This is a landmark piece of legislation aimed at reforming the telecommunications regime in New Zealand and to deliver a better deal for consumers.

This Telecommunications Bill will help bring greater certainty, investment, competition, opportunity and consumer benefit.

This Bill contains the Government’s response to the recommendations of the Ministerial Inquiry into Telecommunications, which reported to the Government at the end of September 2000. I want to thank the team for their work.

The telecommunications sector in New Zealand was deregulated over a decade ago and has had a regulatory environment for telecommunications that has not been copied by any other developed country.

Since deregulation we have seen new investment and development of competition in the industry. However, most people recognise that this growth could have been accelerated if our regulatory regime was more robust, with dedicated dispute resolution processes instead of relying on the courts. Consumers could be getting a better deal than they are now.

The Ministerial Inquiry took a hard look at the old regime and determined that better results could be achieved if we target the existing problems – particularly dispute resolution, and the efficiency of access to key services.

The Government took the Inquiry’s recommendations on board and introduced the Bill in May this year.

This Government is committed to progressing a competitive environment for telecommunications. The Bill is designed to promote investment and competition in such a way that people decide to invest in telecommunications in New Zealand, not because of regulation, but because they have a fair chance to make a return on that investment. We want to see new and old service providers compete effectively, using exciting and innovative technologies that will drive the knowledge economy in this country.

The Bill aims to promote competition. This involves a fine balance between encouraging further investment by existing players and lowering the barriers to investment by new players.

It is about as much market as possible and as much government as necessary.

The Bill, as it now stands, regulates access to key telecommunications services in a carefully targeted way. It allows a regulated price to be set if commercial negotiations fail for some services that are critical for competition, such as interconnection with Telecom’s ubiquitous fixed network, and the new wholesaling regime. The wholesaling regime will enable Telecom’s competitors to complete their service bundles by adding services such as the residential telephone service. In particular, it will enable them to compete against Telecom more effectively in areas outside the main CBDs.

For other services, however, the Government recognises that a lighter form of regulation is more suitable at this stage. This form of regulation is referred to in the Bill as 'specification'.

The ‘specification’ category requires that access be provided, but does not enable the Commission to set a price for access. It enables a degree of regulatory forbearance to be exercised, by avoiding imposing price-setting regulation. However, it still sends a strong signal that access must be provided.

The services in this category are mobile roaming, co-location, and co-location at BCL sites for fixed telecommunications operators. This will facilitate the entry of new competitors into the mobile and broadband markets, without unduly impacting on incentives for investment. The Government believes that a light form of regulation for these services is in the best interests of New Zealand, subject to sensible limits.

The Bill also deals with the administration of the Government’s social policy objectives in telecommunications, via the provisions relating to ‘Telecommunications Service Obligations” or TSOs. The Bill enables these to administered in a more principled, transparent and competitively neutral way.

The Kiwi Share Obligation is the first, and currently only, TSO under the new regime.

The Government will announce an update to Telecom’s Kiwi Share Obligations following the passage of this Bill. The upgraded KSO includes the extension of low speed data services to 99% of the population and clarifies that standard Internet calls are covered by the free local calling option under the Kiwi Share.

The creation of a role for a new specialist Telecommunications Commissioner is the foundation of the new framework. The Commissioner will reside within the Commerce Commission and will be responsible for resolving industry disputes over regulated services and for recommending whether additional services should be regulated.

The Commissioner will also be able to examine and approve codes of practice submitted by an industry forum in relation to regulated services. This process will enable the industry to play a key role in working together to resolve industry-wide issues.

Last week I announced that Mr Douglas Webb will be appointed as the new Commissioner. It will not be easy to usher in a new regulatory regime for a sector as complex as telecommunications, and I wish Mr Webb well in this task. I believe he is the right person for the job, and I am sure that he will be ably assisted by the staff at the Commission.

The Commerce Committee examined the Bill in great detail and heard a number of submissions from interested parties. They considered these submissions carefully, and recommended a number of changes that have strengthened the Bill. Once again, I would like to thank the Committee members for their work on this legislation.

I would also like to thank Parliamentary Counsel and officials who have worked on this Bill, for providing excellent support to me and to the Commerce Committee.

New Zealand needs a telecommunications regulatory regime that intervenes only where it is necessary to make the market operate more efficiently.

The new regime ensures a fine balance between encouraging further investment by existing players and lowering the barriers to investment by new players.

This will mean more choice for consumers and more competition in the market.


I am thrilled to see the passage of this Bill.

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