Speeches

Keynote address to NetHui 2015

Thursday, July 9, 2015 - 16:47
Communications

Good morning, kia ora koutou.

Thank you very much for having me back at NetHui.

I was doing a count up this morning and I think this is probably my fifth NetHui event between NetHui and NetHui South.

Can I just begin my acknowledging Jordan Carter and Internet New Zealand. Thank you for the work that you do putting these events together.

The internet is everyone’s business

This is the fifth of the main NetHui events. One of the things that I love about your conference is the name. It’s such a quintessential New Zealand name that it straight away speaks to Kiwis in a way that describes exactly what this event is and how it works. I love that, and its uniqueness.

I also enjoy the theme that you’ve set this year – The Internet Is Everybody’s Business.

To me that’s similar to what I’ve been saying for a long time – and I know many of you have been as well – which is that fundamentally everything is changing.

And this is happening whether we like it or not, whether we want to engage with it or not.

Most people in this room will be very excited by the change that the internet brings. However, the reality is that there’s a large chunk of the population who don’t like change and aren’t comfortable with the way the internet is changing every aspect of our lives.

But it’s an inescapable change. As those who are more comfortable and more involved in the changes, we have an obligation to make sure we’re bringing all of society with us.

I also would like to acknowledge Kathy Brown from the Internet Society who I haven’t had the chance to meet yet but I’m delighted that she could be here. I’ve been hearing great things about the inter-community work that you’ve been doing so it’s great that you could be with us at today’s event.

Connecting New Zealand through better broadband

So I thought what I would do today is really give you a bit of an update on where we are and what we see coming up next.

It won’t be any surprise you that I’m going to start off by talking about our flagship connectivity programmes.

I make the point wherever I go that pipes in the ground or wires overhead are not going to be what delivers us transformative change.

Equally the reality is that the sort of transformative change that we’re coming to expect and demand isn’t possible without good connectivity infrastructure.

I’m incredibly proud of where we’ve got to over the last six years. So I want to just start off by highlighting where we are because I know it gets banked quite quickly as soon as you do it. But actually when you look back, it is significant.

The UFB programme that we’re putting in place across now 80 per cent of New Zealand is what actually delivers $33 billion of economic benefit. Those numbers were set on the original programme at 75 per cent connection across New Zealand, so it doesn’t take into account our extension.

Across the two programmes, the UFB and RBI the Government’s now committed more than $2 billion and we have 87 different retail providers providing services and services available across all candidate areas.

Over the last little while we’ve started to see a quick acceleration of completed towns where they’re all completely fibred and ready to go.

The exciting thing for me is that the 11 completed towns are spread across the North and South Island but are actually all in provincial New Zealand.

We often hear a lot about how it’s all about Auckland or Wellington. In fact I had a guy say to me last night: “why can’t I live somewhere else in New Zealand and be able to connect to the world, why do I have to be in Auckland?”

My answer was, well sorry buddy but the towns that we’ve connected -  Whangarei, Taupō, Whanganui, Cambridge, Blenheim, Ashburton, Oamaru, and Timaru – these towns aren’t main cities in New Zealand, they’re really right out there in the provinces and that’s incredibly exciting.

UFB connectivity is the single biggest thing we can for regional economic development.

Just as the railways opened up parts of the Wild West, this brings the ability for any part of New Zealand to connect not only with other parts of the country but with the world; instantly and without any sort of disadvantage of the distance, so it really is game changing.

You’ve probably all seen the statistics.

The build is now 50 per complete. We’ve just connected our 100,000th user. Connections are going up at the rate of about 350 premises so the programme is tracking very well. It’s ahead of schedule and under budget.

The acid test though is how is UFB is changing use and speeds.

Akamai recently put out some numbers that tell us that the average internet speed in New Zealand has more than tripled since 2009.

So that’s incredibly exciting and a great start. We’re still only halfway through the build and uptake across the country is sitting at 13.8 per cent which is a great level of connectivity for this stage of the build.

But if you think about the fact that we’ve already tripled our standard speed and are halfway through the build, it illustrates the impressive and transformative change that UFB is bringing about.

The challenge for the Government is that while we’ve made great progress in a short amount of time, demand and consumer expectation for readily available, high-speed internet is accelerating even faster.

It’s useful to remember that while the internet isn’t very good or slow in parts, it is so much better than it was.

If you look at the rural areas, which being a rural person myself is close to my heart, back in 2011 when this really got underway we only had 1-in-5 rural properties that could access speeds anywhere near a peak of 5 Mbps.

Now 5 Mbps isn’t much – you all in the audience are probably sitting there thinking wow that’s beginners stuff and I can tell you my own property at that time our speeds were 0.2 Mbps so 5 Mbps was revolutionary – but still obviously not where we’d like to be.

Where 1-in-5 had that, we’re now on track to have four out of five having at least 5 Mbps.

Of course the RBI programme, $300 million in the first stage, partly from Government, predominantly from  the TDL (Telecommunications Development Levy),  and across that programme so far we have uptake of around 25 per cent – 25.2 per cent to be exact – which is a combination of the enhanced copper speeds we’re delivering and the fixed wireless from the towers.

The other part of the RBI programme which I think gets massively undervalued and not picked up is the cellular connectivity and it’s very clear to me that while fixed connectivity remains critically important and a big focus, mobile connectivity is increasing important.

Extending that footprint of mobile connectivity across New Zealand is something that’s right at the forefront of my mind. If you’re in the built up areas it’s probably pretty good most of the time but actually when you get out of the main centres, cell phone connectivity gets very patchy very quickly.

We know with those RBI towers, which are in the rural and provincial parts of New Zealand, in three months alone and on just one network, 1.8 million unique connections were made to those towers. That’s not calls but 1.8 million individual cell phone addresses made contact through those towers so it’s significantly increasing our cell phone connectivity.

Next steps in connectivity

So that’s where we’re currently sitting, what comes next?

One of the things I’m constantly saying to my colleagues is that internet connectivity is never done. We can’t say ‘right we’ve ticked that box, we’ve got that one off the agenda’.

I often liken connectivity to that of running water or electricity.

In the same way that it would be unimaginable for us to think of a house that didn’t have either running water or electricity, fixed and cellular connectivity has become the same.

At the last election we announced another $210 million into the UFB programme, which would take us up to at least 80 per cent, and another $100 million for RBI extension and $50 million for the Mobile Blackspot Fund.

Most of you in this room probably know we’re going through a process at the moment of asking for Registrations of Interest from both suppliers and, differently to stage one, asking for communities and councils to engage with us as to how they would like it to work.

The reason for this is pretty straight forward. There are a number of reasons actually.

The first is, I’m very pragmatic about the next phase. I have a limited amount of money and $360 million sounds like a lot but believe me when you’re trying to roll out connectivity to the least densely populated parts of New Zealand, it doesn’t go very far.

I’m anxious to do a couple of things. The first is making sure we roll out to the places that have a good understanding of how they’re going to use it and how they’re going to really lift their region’s performance, not only economy but also social services and outreach with it.

Across New Zealand now we see a very different picture of how different regions are taking up the connectivity we’re rolling out. From Kapiti at 1.9 per cent uptake to Whangarei which is getting up to around 18 per cent uptake.

There really is a very clear distinguisher between the councils, the local economic development agencies and the local champions who are out there talking to people, encouraging them about what connectivity does for them – and those who aren’t.

The second concern is that I’m very reluctant to see a big chunk of that money go on compliance costs and when you talk to Chorus and the Local Fibre Companies, there is a very real difference between the councils and communities who are enabling support of the build and the rollout and those that are perhaps a little more difficult to work with and have rules that are a bit more hard to penetrate.

So as part of this Phase Two, I’ve asked councils: what are you going to bring to the table? How are you going to use it? How are you going to support the build?

Councils are in the best position to know which areas within their region are the most in need of better connectivity and how they would structure it. I want to get them to help me identify where those priority areas are.

We’ve asked them to be part of that mix with us and think about the solutions that would work for their communities.

In the provider space, we’ve asked them to again work with us on the mix of technologies, the design, the critical elements that will make it easier for them to get out and either provide the infrastructure or retail service.

Again the learnings we’ve taken from UFB and RBI 1 was that it’s all very well provide a wholesale service but if it’s not attractive to the retailers to come and sell that service if it’s going to be difficult to connect.

We’ve certainly had examples where the network was getting rolled out in some places in the early days but the retailers were very slow to get in the game. So I want to now look at that network across both wholesale and retail, and be clear on what things we can design into the build from the outset that will make that entire ecosystem work well.

Fundamentally, until the customer can turn it on at their house, the job is not complete.

The ROI closed for providers last Friday and for communities its closing tomorrow and it will be very interesting to see what comes out of it. And, of course, I’m expecting it will be oversubscribed.

Connectivity driving innovation

In New Zealand, and I make this point a number of times, we’re the last bus stop on the planet. We make our living selling to the world. It’s critically important to us, far more so than many other countries, to have good, high-speed, reliable connectivity to the world.

We’re the most innovative creative nation on the planet. We’ve always had to be to compete internationally, given where we’re located. That weightless economy that we’re now engaging in and showing our metal in is a tremendous opportunity for New Zealand.

So this is critical for us. It’s also critical, domestically because of the fact that we have small populations spread over a very, very large area. When we need to deliver services and health and education and the like across our populations the internet is an absolute revolution in of course how we can do that.

Even launching into things like one of the breakout sessions here today is on Online Dispute Resolution, so as the Minister of Justice my ears pricked up and I thought great who’s talking about that, I want to hear about how the thinking is in that.

Even things as old school and traditional as going off to court and solving your differences, there’s no reason we can’t think quite differently about how that works, once we have that high-speed connectivity behind us. Whether it’s in intelligent transport networks and the spectrum and the regulation around that, whether its mobile wallets, whether it’s an e-health home monitoring, the opportunities really are limitless.

Rolling out connectivity faster

One of the other things that we’re working on in this space is how do we make connectivity move quicker for people.

One of the only criticisms I get of the UFB programme is people want to know how they can get it faster. And I totally understand the frustration.

One of the real nuisances people tell me about is when they are down a shared right of way and suddenly find that they have to get sign-off from ten different houses. And if any one of them has got a pip with you or is overseas and can’t be contacted, you can’t get connected.

That fundamentally to me seems wrong.

I’ve put out a discussion document that looks at how we could recalibrate those consenting issues. Submissions are still open.

I don’t mean consenting in terms of council resource consents, I mean neighbour’s consents to get across effectively common areas. So whether that’s in a high rise building that has common area entry, a business park with a common area network, or whether it’s down a shared driveway.

I don’t think its right that any neighbour should be able to prevent you from getting UFB as long as we follow reasonably careful protections of their rights.

It’s certainly an area where we can do better.

Driving Digital Convergence

The other thing I wanted to talk about is a big piece of work that’s underway. I’ll be making more public announcements soon but I want to give you a quick overview.

It’s about how the convergence between markets and technologies and platforms is changing so much of what we do and how we perhaps think about it.

This is the first NetHui I’ve spoken at since the election as Broadcasting Minister. I’m probably the first Minister of Broadcasting who went to the Prime Minister and actively lobbied for the role.

I did that because having been Communications Minister for three years, one thing had become screamingly obvious, which was that it was becoming increasingly factitious and illusionary to think broadcasting is wholly distinct from the internet and communications.

When you look at how our system of laws is set up for these areas they are incredibly siloed on a platform basis. So you have not only a device that’s specific to a platform but specific to a type of communication and its own regulatory framework.

The days where you had a telephone to make calls, a TV to watch audio visual and a radio to listen to audio are well gone.

While some people couldn’t imagine watching TV through the internet, actually it’s an area that’s accelerating exponentially.

If we look at the regulatory frameworks that sit behind them, one thing is very clear which is that they are not calibrated well enough for a converged platform.

When you look at something like the Broadcasting Act, for example, which is our content regulation framework, and it’s very narrowly defined to traditionally broadcasting channels.

Even within that, it’s not very well-calibrated with other legislation that it touches on like the Election Act and the Film, Video and Classification Act.

When you look at the Telecommunications Act, it’s our set of economic regulations in this space and yet broadcasting is entirely excluded from it.

So I’m of the view that it’s time to have an almost “first principles” look at communications and media; how we get our information and entertainment; and how we communicate as a single entity.

We need to kick the tyres across the regulatory framework and ask whether it’s calibrated for this converged world that we live in.

We need to look whether there are duplications or inconsistencies, or have created an uneven playing field between the providers. There aren’t delineations now between what Vodafone, Spark or Two Degrees are providing to its customers, to what TVNZ or Radio New Zealand are doing for theirs.

Those lines are blurring, if not outright vanishing, and all of our frameworks are still very much still vertically separated.

My view is that you don’t want Government leading, defining or constraining innovation in this space, so our job is to make sure we have regulation that’s appropriate to protect New Zealanders, that we have regulation that is effectively platform-neutral and that we don’t limit or constrain how those markets will develop or evolve.

When you start thinking about this, it really does create quite a wide range of topics and issues to think about. Many of them are in my area either under Justice, Broadcasting or Communications, but obviously it involves many of my colleagues.

Progressing the Telecommunications Review

One of the parts of that work which you’ll know is underway is the Telecommunications Review which will look clearly at these issues from a convergence platform but also very detailed specific issues around pricing and access, methodologies across the various platforms that we have and how that evolves going forward and can certainly look at within that wider discussion of work issues for example of net neutrality and some of the issues that I know you’ll be discussing this week.

So I think it’s a really exciting time, I’ll going to really look to all of you to engage in the discussions because as I say I think if we don’t challenge ourselves to make sure we question every assumption that we have existing in our laws we run the risk of being quite perverse and unintended outcomes.

Those pieces of work will be coming out in the next few months for further discussion and input, and I’m sure this group of people will be actively engaged in that. I certainly welcome your feedback.

Tackling cyberbullying

Finally, I want to touch on the Harmful Digital Communications Act that passed through Parliament with an overwhelming majority in the last few weeks.

This is a piece of legislation that I know has had a lot of discussion and debate. I think a lot of what is being said about it is what falls into the pitfalls of scaremongering.

It’s a new framework and with new frameworks you are always carefully making sure you have the balance right and always open to the fact that adjustment will be needed. I’m very mindful of the fact that with any new framework, there will be a period of testing and bedding down by the courts.

But the point that I would make is simply this: communications through the internet have completely different characteristics in terms of the damage that can be done, the viral nature of them, the anonymity of them, which make them different to the offline world. We have to recognise that.

The biggest part of this framework is around mediation and civil remedies.

I’m absolutely confident that you will see the overwhelming majority of instances be dealt with through the Approved Agency working between the parties to try and get the right positioning.

But there is of course the criminal provision for the very worst of cases.

If we look at Australia who’ve had a similar criminal provision for ten years, we know that a very, very small number of cases have ever got that far.

For those who say it’s all about criminalising children, I can tell you that children aren’t caught up by the Act at all. In Australia, for young people up to the age of 18 there have been only a small number of cases that have been brought.

I don’t accept the suggestion that anyone who says something about someone online that they don’t like is suddenly a criminal. That’s simply not correct.

And if you wanted to read a ridiculously literal view of legislation, there are actually many examples you could throw up.

For example, on a strict technical reading of the Resource Management Act, you need resource consent to sneeze or to light a cigarette.

Under the Medicines Act, broccoli should be registered as a medicine because we say it’s good for you.

Anyone can look at these things and create nonsense examples, but the reality is that our systems don’t permit those sorts of nonsense cases to come forward.

If you look at the Act, read the communications principles, and take a look at the facts the court has to consider when making any order, I think you’ll find any nervousness you have is largely laid to rest.

Conclusion

Ladies and gentlemen, it’s an exciting time to be in my role. I love the role I’m in.

I’m tremendously lucky to be in my fourth year as Communications Minister.

Can I thank you all for being involved in this conference, I wish you the very best for the next few days and I look forward to you engaging with me on some of the interesting issues we have in front of us in the months and years to come.

Thank you very much.