Monday, December 13, 2010
Risk in turning back regulatory clock
NZ Herald November 10
Bill English's response to New Zealand's third placing in the World Bank's survey of the best countries to do business in was instructive.
While attributing the result in part to the quality of our regulatory frameworks, the finance minister suggested improvement could come from cutting red tape - ie, less regulation.
Regulatory reform is, of course, the portfolio of Rodney Hide, who has yet to meet a regulation he likes. Steven Joyce intends to go one step further, changing the Telecommunications Act to remove partners to his Ultra-Fast Broadband Initiative from Commerce Commission scrutiny for the first 10 years.
These guys are hard wired against regulation, which is why we still have an unhealthy dependence on a hard-wired copper network.
The previous National-led government's failure to regulate meant the owners of Telecom were able to extract monopoly rents from existing infrastructure, while moving aggressively to stomp on challengers.
This approach actually made it vulnerable to technological shifts, as it sacrificed future growth in the pursuit of sweating the last drop out of existing assets. It also allowed Vodafone, taking advantage of Telecom's wrong choice of technology, to dominate the mobile phone market.
The result of this cosy duopoly has been high prices for both fixed and mobile services, and a lower level of broadband speeds and use than could be expected from New Zealand's history of early adoption.
Asked by internet New Zealand to analyse the proposal, lawyer Michael Wrigley concluded that Joyce's proposals would breach New Zealand's international legal obligations under the General Agreement on Trade in Services (GATS) and be out of line with Apec's best practice guidelines, which both call for an independent regulator for all telecommunications services.
Joyce said his officials rejected the Wigley opinion, and that local fibre companies would in fact be regulated by way of contract, with Crown Fibre Holdings setting pricing through a competitive tender process.
Internet NZ chief executive Vikram Kumar agreed that there would be regulation, with the argument being which arm of government would do it: Crown Fibre Holdings or the Commerce Commission.
"Is it the independent arm or the investment arm? There are good public policy and legal reasons for it to be the telecommunications commissioner," Kumar says.
He says other countries have been able to attract investors without shielding them from ongoing price scrutiny, so it's strange for New Zealand to be so out of step.
Getting the price or services right is important because people need to see the value of switching.
"We really want [the Ultra-Fast Broadband Initiative] to succeed. We don't know what the Government's plan is for people to migrate from copper to fibre. It might be hidden in the procurement negotiations, but there is a big danger that in the hurry to get fibre out they will turn the regulatory clock backwards, and the gains of the past few years (since the passing of the Telecommunications Act 2006) will just wash away.
"The Government is creating unnecessary risk."
But there are people in Government who do get technology and want the rest of us to get it, too.
Digital New Zealand, part of the National Library, is one of a number of government and private sector groups behind the Great NZ Mix and Mash Competition, which aims to encourage the use of existing free digital content and data to tell New Zealand stories.
The contest's categories include remixing a poem from words and images, a poster design for the great Kiwi summer holiday and an open category.
Andy Neale from Digital NZ says the remix idea is in the spirit of the creative commons, where previous material could be used legitimately to create something new.
"The mash-up side is to encourage the development of new software applications that use public data, so that encourages Government to release data in ways people can reuse," Neale says.
He says the Obama Administration's data.gov initiative is creating interest worldwide in the sorts of data that governments collect and how it can be made accessible.
"The thinking goes it is not enough to release data; you have to encourage the use of it," says Neale, whose group was a finalist in this year's New Zealand Open Source Awards.
He says new devices such as tablets and smartphones are creating demand for applications which pull together data from multiple sources.
Entries close on November 30.
One of the judges, Nat Torkington, says the work done by the Digital Ninjas group over the past year has encouraged central and local government agencies to think about how they release their data.
Contestants can look at catalogue sites such as data.govt.nz for material to mash up. ¶ 10:19 am
Bill English's response to New Zealand's third placing in the World Bank's survey of the best countries to do business in was instructive.
While attributing the result in part to the quality of our regulatory frameworks, the finance minister suggested improvement could come from cutting red tape - ie, less regulation.
Regulatory reform is, of course, the portfolio of Rodney Hide, who has yet to meet a regulation he likes. Steven Joyce intends to go one step further, changing the Telecommunications Act to remove partners to his Ultra-Fast Broadband Initiative from Commerce Commission scrutiny for the first 10 years.
These guys are hard wired against regulation, which is why we still have an unhealthy dependence on a hard-wired copper network.
The previous National-led government's failure to regulate meant the owners of Telecom were able to extract monopoly rents from existing infrastructure, while moving aggressively to stomp on challengers.
This approach actually made it vulnerable to technological shifts, as it sacrificed future growth in the pursuit of sweating the last drop out of existing assets. It also allowed Vodafone, taking advantage of Telecom's wrong choice of technology, to dominate the mobile phone market.
The result of this cosy duopoly has been high prices for both fixed and mobile services, and a lower level of broadband speeds and use than could be expected from New Zealand's history of early adoption.
Asked by internet New Zealand to analyse the proposal, lawyer Michael Wrigley concluded that Joyce's proposals would breach New Zealand's international legal obligations under the General Agreement on Trade in Services (GATS) and be out of line with Apec's best practice guidelines, which both call for an independent regulator for all telecommunications services.
Joyce said his officials rejected the Wigley opinion, and that local fibre companies would in fact be regulated by way of contract, with Crown Fibre Holdings setting pricing through a competitive tender process.
Internet NZ chief executive Vikram Kumar agreed that there would be regulation, with the argument being which arm of government would do it: Crown Fibre Holdings or the Commerce Commission.
"Is it the independent arm or the investment arm? There are good public policy and legal reasons for it to be the telecommunications commissioner," Kumar says.
He says other countries have been able to attract investors without shielding them from ongoing price scrutiny, so it's strange for New Zealand to be so out of step.
Getting the price or services right is important because people need to see the value of switching.
"We really want [the Ultra-Fast Broadband Initiative] to succeed. We don't know what the Government's plan is for people to migrate from copper to fibre. It might be hidden in the procurement negotiations, but there is a big danger that in the hurry to get fibre out they will turn the regulatory clock backwards, and the gains of the past few years (since the passing of the Telecommunications Act 2006) will just wash away.
"The Government is creating unnecessary risk."
But there are people in Government who do get technology and want the rest of us to get it, too.
Digital New Zealand, part of the National Library, is one of a number of government and private sector groups behind the Great NZ Mix and Mash Competition, which aims to encourage the use of existing free digital content and data to tell New Zealand stories.
The contest's categories include remixing a poem from words and images, a poster design for the great Kiwi summer holiday and an open category.
Andy Neale from Digital NZ says the remix idea is in the spirit of the creative commons, where previous material could be used legitimately to create something new.
"The mash-up side is to encourage the development of new software applications that use public data, so that encourages Government to release data in ways people can reuse," Neale says.
He says the Obama Administration's data.gov initiative is creating interest worldwide in the sorts of data that governments collect and how it can be made accessible.
"The thinking goes it is not enough to release data; you have to encourage the use of it," says Neale, whose group was a finalist in this year's New Zealand Open Source Awards.
He says new devices such as tablets and smartphones are creating demand for applications which pull together data from multiple sources.
Entries close on November 30.
One of the judges, Nat Torkington, says the work done by the Digital Ninjas group over the past year has encouraged central and local government agencies to think about how they release their data.
Contestants can look at catalogue sites such as data.govt.nz for material to mash up. ¶ 10:19 am
