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TUANZ Telecommunications Day - Paul Swain Speech

25 July, 2002
Hon Paul Swain
Speech Notes

TUANZ Telecommunications Day

Good morning and thank you for your invitation to speak here today. Conferences such as this are very important. Telecommunications is a rapidly changing industry and it is vital that the industry gets together to provide their customers and themselves with a view about where things are heading. One of the critical issues for the industry is to develop applications, which benefit both businesses and consumers. A lot of the work that I have been doing in the e-commerce area has been aimed at promoting information and communication technologies as a tool for business growth. That’s why I’m very pleased with the theme of today’s event.

As far as the Government is concerned it has set itself the target of lifting New Zealand back into the top half of the OECD. Our plan to achieve this goal is spelled out in our Growth and Innovation Strategy. That strategy is about strengthening the underlying fundamentals of the economy and using technology to add value to our traditional strengths such as agriculture and tourism.

As well as focussing on the business environment, direct foreign investment and skills and talent, the strategy identifies three areas critical to New Zealand’s future – information and communication technologies, biotechnology and the creative industries. These are all dynamic industries in their own right but, critically, they are also enablers across the entire economy.

All three of these industries will be critical for New Zealand to truly achieve a knowledge economy. The Government has established taskforces for each of these three areas to make sure we do not miss the huge opportunities they present. The ICT Taskforce, of which I am co-chair, will report back to the Government and the industry in August.

In its first term, the Government also launched its E-commerce Strategy, which identifies three critical areas for Government – showing leadership through its e-government programme, building capability particularly for small and medium-sized businesses and ensuring that we have an enabling regulatory environment through legislation such as the Electronic Transactions Bill, anti-hacking laws and last year’s Telecommunications Act.

But if we are to truly promote a knowledge economy we have to make sure that its nervous system – the telecommunications infrastructure – is world class. The Government has been working to achieve this in a number of areas and I’d like to run through some of these today.

The Telecommunications Act

The telecommunications industry is of critical importance to the economic, cultural and social development of New Zealand and it has been a long but worthwhile journey to implement a regulatory regime for this very important sector.

Based on the principle of as much market as possible and as much government as necessary, this government’s objective is to bring greater certainty, investment, competition, opportunity and consumer benefit from the telecommunications industry.

An important piece in this jigsaw is the Telecommunications Act, which was passed last year.

One of the key planks of the Telecommunications Act is to provide an ordered dispute resolution process to reduce the drawn out litigation that has mired the New Zealand telecommunications industry over the last decade.

The Telecommunications Act brings New Zealand into line with most other OECD countries. Prior to the Act we were in the unique position of being one of the first countries to privatise its formerly state-owned telco but one of the last countries to introduce a sector-specific regulatory regime for telecommunications.

It is clearly preferable for the industry players to negotiate commercial agreements themselves in the marketplace. But where no agreement can be reached the Telecommunications Commissioner provides a backstop to expedite the resolution process. If necessary the commissioner can make a determination to promote competition in telecommunications markets for the long-term benefit of consumers.

We now have a set of issues that can be addressed and come under the ambit of the commissioner. Designated services, ones that require pricing principles, include, interconnection, wholesaling and number portability. At a lower level there are now specified services, which require access agreements without needing pricing principles. These include mandatory roaming and cell site co-location.

Already we have seen disputes over interconnection and wholesaling referred to the commissioner. I am confident that we will see positive outcomes in both areas

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, to the ultimate benefit of New Zealand consumers.


In this year’s Budget, the Government announced that ‘tens of millions of dollars’ would be set aside over two years for the introduction of a telecommunications infrastructure capable of delivering broadband internet throughout New Zealand.

The roll-out of broadband can be likened to the roll-out of roads and rail in previous centuries and the Government has identified a role as a facilitator in the roll-out.

The Government's objective is to ensure that the majority of schools have access to high-speed two-way internet by the end of 2003, with infrastructure being made available to the most remote schools by the end of 2004. We see this as a way of spearheading the rollout of broadband to New Zealand communities.

To this end, the Government has funded studies in rural and provincial New Zealand on the impact of broadband on economic development.

In addition, the Government has, in partnership with local communities, funded five regional pilots to test a demand aggregation model whereby communities bundle up their demand for the new telecommunications technology and offer that demand by way of competitive tender to telecommunications companies.

These pilots have been successful in identifying the broadband requirements in the regions and have given the impetus for the recently announced ventures to provide broadband services in several regions such as Otago, Northland and Taranaki.

The development of broadband is of vital importance to New Zealand’s future as a knowledge economy. This industry’s response in fostering the rollout of broadband is a demonstration of the innovation and vision that will help lift New Zealand back into the top half of the OECD.

Carrier Forum

The establishment of a Carrier Forum is a significant step forward the New Zealand telecommunications industry.

The Forum is an independent self-regulatory body that will develop standards and draft industry codes for regulated services. It presents a great opportunity for the industry to build on the co-operative endeavours that occurred in the administration of telephone numbering.

The three companies which have been instrumental in getting the forum off the ground - Telecom, TelstraClear and Vodafone, as well as TUANZ - deserve credit for persevering with the demanding task of establishing a common framework.

While I understand that no company is entirely happy with all aspects of the Forum – the companies represented are prepared to support the foundations on which the Forum is based. I commend you for that.

The success of the Forum will rest on goodwill between the players. I am hopeful that this is a sign of the increasing maturity of the New Zealand telecommunications industry.

Deaf Relay

Earlier this year the Government decided to go ahead with establishing a telephone relay service for people who are Deaf, or who have speech or hearing impairments.

The service will enable people who are Deaf, or who have speech or hearing impairments to converse using a teletypewriter (TTY) to type text that is converted by an intermediary into speech for the person at the other end, and vice versa.

The provision of the relay service brings New Zealand into line with many other developed countries.

This Government wants to ensure that there is equal opportunity for all people to participate in New Zealand society.

The relay service will also reduce the health and safety risks faced by people who are Deaf or who have hearing or speech impairments, and increase their employment, business and social opportunities.

Government officials are currently developing a detailed description of the relay service in consultation with the disability community and telecommunications industry. Our aim is to have the relay service up and running next year.

I take this opportunity to thank the industry for its co-operation in the delivery of telecommunications services to the Deaf, speech or hearing impaired.

Introduction of the Telecommunications Commissioner Douglas Webb

Central to the new telecommunications regulatory regime is the Telecommunications Commissioner.

The commissioner is responsible for resolving industry disputes over regulated services and works with the industry to promote competition for the long-term benefit of New Zealand.

Douglas Webb, the new commissioner, brings considerable experience to this demanding role.

Mr Webb joins us from a previous position as Managing Counsel and deputy to the Vice President in the Legal Department at the World Bank.

He has advised and made decisions on telecommunications reform, including the design of regulatory systems in a number of countries. Mr Webb has advised governments on the privatisation of state-owned telecommunications companies, on the creation and capacity building of independent telecommunications regulators and on the promotion of the entry of private network and cellular operators.

Mr Webb has also had first hand legal and telecommunications sector experience in New Zealand.

I am very pleased that such a successful expatriate New Zealander has returned home to help us build a world-leading regulatory regime for telecommunications.

Ladies and Gentlemen, Mr Douglas Webb.

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