12. CLARE CURRAN (Labour—Dunedin South) Link to this
to the Minister for Communications and Information Technology
What progress has New Zealand made compared to other OECD countries in terms of broadband download speed, connection speed and price since November 2008?
Hon STEVEN JOYCE (Minister for Communications and Information Technology) Link to this
New Zealand has made excellent progress compared with other OECD countries since November 2008. The National Government has signed agreements with various investment partners that will dramatically improve download and connection speed while ensuring customers receive a vastly superior service for similar prices. I am certain these changes will drive economic growth, improve the competitiveness of our companies, and further improve our comparisons with other OECD countries.
How will reinforcing Telecom’s market dominance by giving it $1 billion of taxpayers’ money reverse our declining international rankings on broadband performance and make us more digitally competitive, given that New Zealand’s performance has fallen sharply on several OECD indicators since 2008, including going from 12th to 21st for download speed, going from 12th to 24th for connection speed, as well as going from seventh cheapest to fourth most expensive?
I am not quite sure about those numbers the member mentions, but to the extent they are as she says, they could be attributed to the regulatory approach of the previous Labour Government, which, of course, has continued until now.
Mr SPEAKERI have some difficulty with the way the Minister is answering this question. Had the Minister answered the primary question he would have had those figures in his answer. If the figures are not right, the Minister would have had the right figures in his answer. The primary question was capable of answer. I let the Minister get away with a very spongy answer to it. To then turn round and attack the Opposition in response to the supplementary question is a bit rich. If the Minister had given the actual figures for those changes in download speed, connection speed, and price since November 2008 in relation to other OECD countries, I would have had no problem with his attacking the Opposition in response to a supplementary question. But the Minister did not give those figures, and to then argue that the Opposition’s figures are not right troubles me. I would like the Minister to reflect on that in answering the question, and I invite him to answer the question.
I raise a point of order, Mr Speaker. There are two things. Firstly, the primary question asked what progress New Zealand has made compared with other OECD countries in terms of those particular attributes. That progress can be measured in terms of a regulatory progress, in terms of investment progress, and in terms of actual raw numbers. There was no reference to particular measures in that primary question. In terms of the numbers that are there, there are some numbers, but it is not as exact a science as the Speaker indicates the member may believe, and that is the difficulty I have with it.
I hear the Minister’s point, but with a primary question I expect the interpretation to be a reasonable interpretation. I accept the point the Minister is making that progress can be interpreted in many ways, but it was pretty clear to me what was intended by the primary question, and I thought the Minister’s answer was on the vague side. Given that, to then attack the questioner on information included in the supplementary question was, I felt, a bit unreasonable. I accept that my position on that may not be perfect, but time has gone on and I invite Clare Curran to repeat her supplementary question.
How will reinforcing Telecom’s market dominance by giving it $1 billion of taxpayers’ money reverse our declining international rankings on broadband performance and make us more digitally competitive, given that New Zealand’s performance has fallen sharply on several OECD indicators since 2008, including going from 12th to 21st for download speed, going from 12th to 24th for connection speed, as well as going from seventh cheapest to fourth most expensive?
There are a couple of things there. Firstly, those figures do not correlate with my understanding of OECD measurements, and I cannot do anything other than say that. The second point is that I think it is fair to say that, obviously, changes from 2008 to 2010 will have come about as a result of regulatory settings that occurred prior to that date, given the time lags with infrastructure investment in such a thing as communications and information technology. My third point—and probably in answer to the first part of the member’s question—would be to say that by changing the regulatory environment we are likely to achieve a far better result. I think she misunderstands, if I may say so, the big change that occurs in terms of structurally separating Telecom into two companies. One is an infrastructure company and the other is a retailer that competes on the same basis with every other retailer. I think one of the difficulties with the previous operational separation situation is that it did not give the sorts of outcomes that were being sought, and I am confident that structural separation will help achieve that.
Given that his Government will be signing broadband contracts with pricing and speeds that will have effect until 2019, what mechanisms are in place to ensure that New Zealand’s broadband performance does not, once again, begin to fall behind the OECD average over the next decade?
In terms of speed, I think it is reasonably obvious that a fibre-optic access network will achieve far greater speeds than a digital subscriber line network. That is the first bit of good news for the member. The second bit of good news is that the prices that have been negotiated by Crown Fibre Holdings are competitive with the much lower-speed copper networks, which I think is a second win for the member and for the country. The third bit of good news is that the Commerce Commission, of course, will have oversight over those prices over the period and the network will be competing against a regulated copper network. I think it is a win-win for all New Zealanders.
Why does he believe using contracts to remove the regulatory risk faced by Telecom will encourage it to behave in a pro-competitive way, given Telecom’s historic abuse of free rides on the regulatory front?
I think the difficulty is that the member is alluding to many of the concerns that occurred as a result of the previous structures of the New Zealand telecommunications industry and the vertically integrated nature of it. Operational separation, which was from the previous Government, sought to address some of those issues, but I think what is becoming apparent to all industry players now is that unless there is a structurally separated situation we will not achieve the sorts of competitive outcomes that the member is seeking. I think we will achieve that with the legislation that is before the House, and I invite the member and her party to change their minds and support it.
I seek leave to table three documents, the OECD broadband statistics from September 2010. The first document has the fastest broadband speeds advertised by the incumbent telecommunications operator—
The third document is an OECD broadband statistics document dated September 2010 on average advertised broadband download speeds by country.