Hon Paul Swain

17 October, 2000 Media Statement
Address To IEE (Institution Of Electrical Engineers)
7.30am James Cook Centra - Wellington

I've been asked to talk to you today about the government's inquiry into telecommunications. As you will be aware I commissioned that inquiry shortly after the election and it reported back to me earlier this month.

During the inquiry and since I have not made any substantive comment on either the proceedings of the inquiry or its subsequent report.

There is good reason for that, firstly I didn't want one telecommunications inquiry run by the official team, and another run unofficially through the media.

However what I can talk about now is what the inquiry team has reported back to me and what the government is doing with that information.

It is important to reiterate that this inquiry is a forward-looking one in that we are trying to create a stable base for the knowledge economy. Telecommunications is essentially the railroad of the 21st century, and getting that infrastructure right is absolutely critical.

The inquiry team put in seven months of intense work on the report.

During that time the team of Hugh Fletcher, Cathie Harrison and Alan Asher released an issues paper, took submissions on the issues paper, issued a draft report and sought submissions on that. They took further public comments on the submissions and undertook rounds of public hearings. It has been a thorough consultative process and I welcome the input made by the industry.

So what were the inquiry's key recommendations for changes to the regulatory regime governing electronic communcations?

These were:
 An emphasis on commecial negotiations and industry self-management
 Establishment of an industry forum as a focus for the industry's development of codes of practice
 A list of regulated services which have rules governing their supply
 The freedom for parties to reach agreement on terms for regulated services, including pricing
 An open and transparent process for determining whether services should be regulated – or cease to be regulated
 The establishment of a stand-alone regulator – an Electronic Communications Commissioner – to rule on industry disputes when necessary
 A swift and transparent dispute resolution procedure
 A better defined 'kiwi share' service obligation, the responsibility of Telecom which will b emodied in legislation and maintain anunlimited free local call option for residential voice and low-speed date acalls
 A four yearly review of Telecom's kiwi share obligations and
 An Information Society Initiative to ensure broadband services become as widely available as possible, and to facilitate full participation by New Zealanders in the information economy.

We may accept all of these recommendations, some or none of them. In the next few weeks I will meet further with telecommunication industry representatives and companies. I will be considering this report as will my colleagues.

It is now over to the government to decide what our response will be.

I intend making that response before Christmas, and I want to get any necessary legislative changes under way by then as well.

Whatever we do it is essential that we get this right. I will not be rushed into any sort of speculation or second guessing. Getting the regulatory environment for the electronic communications industry spot on is essential for New Zealand's future in the knowledge economy.

The inquiry is one of several initiatives we are running to help New Zealand make a successful transition from what the 'old' economy to the 'new'. In other words, the transition from an economy that is overly dependent on commodities to one based on knowledge -where knowledge not only adds value to goods and services, but creates value as well.

I've talked about the telecommunications inquiry, but there are a number of other key elements in building the platform for the knowledge economy. Let me touch on some of them briefly.

Skills, immigration, R&D and investment
Obviously skills and education are critical. One of our key challenges is not only educating our population, it's also retaining and promoting our skill base.

There are two opportunities here. Investing in the development of high end IT/business and science skills, and widening our migrant base to include skilled workers in areas we are in short supply.

Another key issue is research and development. We have announced a research and development government scheme to target new R and D, and we are currently looking at other options to promote more investment in this key area.

On the investment front we have established Industry New Zealand to encourage the success of the essential small to medium sized businesses in this country. It offers a variety of schemes ranging from funds for regional economies and individual business incentives. The SME market is the backbone of the New Zealand economy and we want it to be successful.

Trade NZ is undertaking a major e-commerce initiative, that will help small and medium exporters get hooked into the global economy.

E-government
Of course if you want to be successful adopters of a knowledge economy then you have to lead by example – that leads me to e-government.

We want a government – local and central - which offers service and information delivery at least as good as the private sector – if not better. We want people to have their say and we want government to work better together to achieve that. E-government is the key to making this happen.

What exactly are we doing?

We have established an e-government unit in the State Services Commission – it is developing an e-government strategy and is working on various projects.

A top priority is the government's e-procurement project. By June 2001, the business case for the roll out of e-procurement will be completed. We are currently considering a range of models. But, whatever the model, e-procurement has some big advantages – it will reduce the cost of government, lower business compliance costs and it will act as the magnet that will pull our SME sector into e-commerce capability. We are determined to pursue this project with some urgency.

In the end we plan to have a more transparent system where people can participate in their democracy electronically - that can only be good for New Zealand.

E-commerce summit
One of my biggest projects this year is the government's e-commerce summit in Auckland in early November.

The summit's aim is to give businesses a practical roadmap for planning their move or next move into e-commerce. We want businesses from all over New Zealand to be involved.

Keynote addresses will focus on how businesses can become net ready, tips for keeping up with the e-commerce revolution and the best and worst of marketing on the Web.

A variety of workshops will be offered over the two days including very practical ‘How To’ sessions, industry sector workshops, and forums focussing on things like how to boost consumer confidence and exploit Internet opportunities.

We will also be presenting the government's e-commerce strategy at the summit and seeking feedback from those attending. The strategy will outline current global trends, identify where New Zealand is at, look at threats and opportunities, identify the role of government and spell out the way forward.

And we will be releasing our guide to e-commerce for small to medium sized businesses.

I am proposing an action team, comprising mainly business leaders to help us to implement the strategy, set targets and drive e-commerce take up over the next few years.

Digital Divide
A critical issue we have to face is turning the 'digital divide' into digital opportunity. This is not just an issue about the gap between rich and poor or skilled and unskilled it is also about the gap between town and country. We are currently in discussion with the private sector to see how we can collectively resolve these issues.

Legislation
As far as legislation is concerned there are two major pieces I am working on - they are an electronic transactions bill and legislation looking at computer crime.

The electronic transactions bill will adjust laws to ensure commercial arrangements can be conducted in a technology neutral way - electronically or on paper.

And my supplementary order paper to Crimes Amendment Bill No (6) will address computer crimes including hacking offences.

This has been developed by the Law Commission, based on the UNCITRAL model and Australian law.

There are other issues being debated around privacy and security. There is a huge opportunity for New Zealand in this because of its time zone. We're the first in the world to turn on our computers every morning – that means we could be the site for early warning systems for viruses and other security breaches.

Conclusion

The key to our future is a proactive government in partnership with the private sector. I've spoken about all the bits and pieces that government is doing itself eg the telecommunications inquiry, legislation, e-government and so on. But in the end it is critical that government and the private sector work together to achieve the best possible outcome for all New Zealanders.

I look forward to working with you to make this happen.

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