Archive for the ‘Internet’ Category

Herald calls for Dotcom to go

December 28th, 2015 at 4:00 pm by David Farrar

The Herald editorial:

New Zealanders ought to be able to find Judge Dawson’s 271-page decision online as easily as they can download movies and music and other copyrighted material. It explains the methods allegedly used by Dotcom’s Megaupload site to store such material and even reward those who did so. It is said to have provided multiple URL links to the same material and when it received a take-down notice from a copyright owner, it is said to have removed only the offender’s link, not the material.

Again I recommend people read the decision. The way Mega was run bears almost no resemblance to You Tube or Dropbox. in fact they stole hundreds of thousands of videos from You Tube to act as camouflage for what they were really doing – paying people to share commercial copyrighted movies.

It may be that these sort of practices are technically legal but it is in the interests of content providers and users that we find out. We cannot find out until Dotcom goes to the US and faces trial. He should go now.

Interesting that Dotcom claimed to be starved of funds, yet he is also saying they will fight all the way to the Supreme Court. That would suggest he in fact has plenty of funds available for his legal case.

Herald backs down on uninformed editorial

December 24th, 2015 at 1:00 pm by David Farrar

On Friday the NZ Herald editorial proclaimed:

Strange things started to happen rather quickly. Not enough subscribers were keen to switch to the more expensive connection, so Chorus raised the price of copper connections to $45 a month to make fibre more attractive.

An organisation of users protested. The Commerce Commission, which can regulate network pricing, stepped in and forced Chorus to lower its copper charge to $32.45. At that, Chorus appealed and the commission has spent the past three years reviewing its calculations.

The following Wednesday their editorial back downs:

Last Friday, our editorial expressed concern that the charge being set for telecommunications on the copper network was being artificially inflated to make the Government-inspired roll-out of fibre optic cable more competitive.

That view has been strongly contested and we need to reconsider a number of issues. Few costs in an economy are more important than the price of its vital infrastructure.

Chorus, the network provider, does not set its own charges. They are done entirely by the Commerce Commission. We have been assured the charge determined by the commission last week has nothing to do with the cost of fibre connections, the uptake of which is at 16.4 per cent of customers served so far.

Kudos to the Herald for admitting they got it wrong. Not so good they did an editorial in the first place they was so poorly researched.

The 271 page Dotcom judgment

December 24th, 2015 at 7:00 am by David Farrar

I’ve now read the 271 page ruling of Judge Dawson in Dotcom et al extradition hearing.

Any doubt on there being a case for extradition crumbles when reading the ruling.

In fact, the evidence in there is so strong, that I think the chance of a successful prosecution in the US is now very high. Previously I was quite unsure if there would be proof beyond reasonable doubt.

I encourage people to take the time to read the ruling. Any thought that Megaupload operated like Youtube or Google Drive gets blown away. The paragraphs from 200 to 300 get into the meat. Here are some extracts:

DOTCOM sent an e-mail message to VAN DER KOLK, ORTMANN and BENCKO in which he complained about the deletion of URL links in response to infringement notices from the copyright holders. In the message, DOTCOM stated: “I told you many times not to delete links that are reported in batches of thousands from insignificant sources. I would say that those infringing reports from MEXICO of ’14,000’ links would fall into that category. And the fact that we lost significant revenue because of it justifies my reaction”

ORTMANN told VAN DER KOLK “Maybe try undeleting them” and VAN DER KOLK asked “You want to risk that?” Then VAN DER KOLK said “I mean MX is just MX, we could ignore them”, and ORTMANN added “It’s not like Mexico is going to sue us in Hong Kong”. ORTMANN continued “Just for testing, we should undelete those files”, “for one day”, “we can excuse it as a tech glitch”. VAN DER KOLK added “I often ignore reports from certain countries, such as VN”. In this context, the abbreviations “MX” and “VN” appear to refer to Mexico and Vietnam, respectively.

So they decided not to delete material from countries they didn’t think were powerful enough to pursue them.

Later that day, DOTCOM instructed ORTMANN, in German, “And please do what I wrote bram. Undelete everything that was in the last 4 weeks reported from non first world countries. SIMPLY everything. And you will see we have daily record again”

So direct instructions from Dotcom to undelete files that they had been told breached copyright.

The U.S. Attorney’s Office for the Eastern District of Virginia expects a representative of the FBI to testify to the following facts: a. On or about December 26, 2008, via Skype, ORTMANN said to VAN DER KOLK, “wow, an Indian subpoena requesting MV uploader credentials…” VAN DER KOLK responded, “wow,” “ah that one from the police,” “I think I saw that one.” Later, VAN DER KOLK said, “it’s just Indian police,” and ORTMANN responded,” yes, we can probably ignore this one.” VAN DER KOLK suggested, “we can always say that we never received their e-mail,”

Not exactly honest are they?

On or about October 25, 2009, Mr van der Kolk instructed a Mega Conspiracy employee through an e-mail, written in Dutch, how to alter the “featured” videos list on and the “Top 100” list on Mr van der Kolk wrote, among other things, that the Top 100 should not list any copyrighted files, but instead should list game demos, software demos, and movie trailers. Mr van der Kolk instructed the employee to track what was currently popular on the Internet and to download material from websites such as,, and Mr van der Kolk further instructed the employee to create fake accounts on and and to upload the files to those accounts, so that it would appear that the files were uploaded by active users instead of Mega Conspiracy employees.

So they knew the material downloaded most was copyrighted, and they faked their top 100 list to exclude that.

On or about November 19, 2009, via Skype, DOTCOM sent ORTMANN a Skype conversation between DOTCOM and VAN DER KOLK, during which DOTCOM said: MV is full of problematic content on the [publicly viewable] video pages. I told you how important this is. Every day counts, especially since we have articles out there comparing us with napster and putting us in a bad light. WHY THE FUCK did you not take care of this? You told me you will do this WHILE you are in HK. I just spoke with mathias [ORTMANN] and he told me he informed you long time ago about fixing this. WHY do you risk our good running business with not following up on important matters like this. If you look at the latest video pages now it is FULL with the latest commercial stuff. FUCK THIS BRAM!

The problem wasn’t that their most popular content was commercial stuff, it was that they were admitting this on the public pages.

And ORTMANN added, “the important thing is that nobody must know that we have auditors letting this stuff through.” VAN DER KOLK responded, “yes that’s very true also.” ORTMANN replied, “if we had no auditors – full DMCA protection, but with tolerant auditors, that would go away.” And VAN DER KOLK replied, “yes true”.

There are scores of references to them hiding what they really were doing.

On or about April 10, 2006, Van der Kolk sent an e-mail to Ortmann asking, “Do we have a server available to continue downloading of the Youtube’s vids? … Kim just mentioned again that this has really priority.” In addition, Van der Kolk wrote, “Hope [] is not implementing a fraud detection system now… * praying *”. Van der Kolk also wrote: “Well we only have 30% of their videos yet.. In my opinion it’s nice to have everything so we can descide and brainstorm later how we’re going to benefit from it.”

They decided to download nearly the entire contents of Youtube onto Mega, so they could falsely claim the majority of their users are uploading home videos, not commercial copyrighted content.

Judge Dawson concluded:

The overwhelming preponderance of evidence produced by the applicant in the ROC and the SROC establishes a prima facie case to answer for all respondents on each of the counts. …

Pursuant to s 24(1) this Court finds that the respondents are all eligible for surrender on all thirteen counts in the superseding indictment.

Hard to read the judgment and come to any other conclusion.

Dotcom ruled eligible for extradition

December 23rd, 2015 at 2:50 pm by David Farrar

The District Court has ruled that Kim Dotcom is eligible for extradition.

No doubt he will appeal, and claim all sorts of conspiracies. But this was a matter decided by a judge, after 50 days of hearings. I doubt any person has ever had a longer or more well resourced defence case.

He has 15 days to appeal to the High Court, which can be on a matter of law only.

In a way this is a pity. I’d be quite keen for him to remain in NZ and spend another $5 million on trying to overthrown the Government, to have it all backfire again!

Europe trying to ban under 16s from social media

December 20th, 2015 at 6:56 am by David Farrar

Stuff reports:

A new law plans to ban children under 16 living in the European Union (EU) from social media unless they have parental consent – but New Zealand experts say it won’t have the desired effect.

EU Parliament introduced the change to the proposed data protection laws last week.

If the new legislation is passed it will raise the age of consent for websites to use personal data from 13 to 16.

It would mean millions of teenagers under 16 would be forced to seek permission from parents whenever signing up to a social media account, downloading an app or even using search engines.

The proposed changes would also put Europe out of step with other parts of the world.

The law is due to be negotiated between member states on Tuesday before a vote.

Almost all major social media services, including Facebook, Instagram, Twitter, Snapchat, and Google, currently have a minimum age of 13.

It’s a stupid law that will be counter-productive.

Even the minimum age of 13 is counter-productive as millions of kids get around that by changing their date of birth. Entire classes of eight year olds are on Facebook.

Rather than ban kids too young, you should let them join showing their real age, but use that to protect them. So let a nine year old be on Facebook, but block them from adult groups and from unsolicited messages.

But if you force them to pretend to be 18 to join up, then you teach them to lie about their age, and lose the ability to protect them.

So the proposed new law in Europe will actually harm kids, not help them.

Judge got it wrong on HDCA

December 18th, 2015 at 3:00 pm by David Farrar

I blogged earlier this month on a court order which directed Pete George to introduce a FT moderator:

I make no comment on the dispute itself between Pete George and the party who gained the court order.

I am concerned however that a Judge has made a ruling that a blogger must “introduce a full time moderator systems so that no comment that is harmful to said person is placed on the blog”.

It is unclear under which statute the Judge has made the ruling. It may be the Harmful Digital Communications Act, but this is not stated in the court order.

I don’t have a problem with an interim order instructing content be removed.  That is a proper and not entirely uncommon thing to occur.

But an order that a blog must introduce a full time moderator system is deeply concerning.

The order has now been withdrawn by the court.

Amazingly the Judge did not realise the provisions of the Harmful Digital Communications Act which he relied on, were not to come into force for a couple of years.

I’m shocked a Judge would make such a wide ranging order, and not even have properly read the Act to realise most of it was not in force yet.

ComCom sets final copper price

December 16th, 2015 at 11:00 am by David Farrar

Stuff reports:

Chorus [NZX: CNU] hasn’t said yet whether it will appeal the Commerce Commission’s decision not to backdate the latest changes to the pricing of copper wire phone services but does say the changes deliver it a $120 million boost to annual operating earnings.

If I was Chorus I’d be thanking Father Christmas (the Commerce Commission) for the 50 cent rise in their share price and take the $120 million with gratitude!

The corporate regulator has raised the total price Chorus can charge for its copper wire services by $6.75 a month compared with the $34.44 it has been charging since December last year.

The new price is a surprising $3.30 a month increase from the last draft decision in July and Telecommunications Commissioner Stephen Gale says that’s because the July decision inadvertently excluded trenching costs.

How can you forget trenching? Arguably the most expensive part for new installations.

The final copper wire price of $41.19, rising to $42.35 in 2020, isn’t very far from the $44.98 price Chorus had been allowed to charge up until last December – when Chorus was still part of Telecom, the price was about $1 a month higher again.

$3.50 a month cheaper is better than not cheaper at all, but disappointing the final price is so much higher than the draft price. The difference should be minimal if the draft is done correctly.


This handy table from Chris Keall shows the changes. $34.44 looked good to me! But the Commerce Commission has to follow the law which dictates a different methodology.

OMSA rules in favour of blogger

December 16th, 2015 at 10:00 am by David Farrar

The Online Media Standards Authority has just delivered its first ruling on a complaint against a blog (Whale Oil) that is a member and has not upheld the complaint.

The complaint was about this story on Whale Oil, regarding the New Zealand Network Charity.

The finding of the OMSA Complaints Panel was:

The Content subject to complaint appeared on the Whale Oil Beef Hooked website and was titled “Special Investigation: Charity Begins at Home.” It focused on the registered charity, The New Zealand Network Charity, and included a sound recording of a conversation between the Complainant, founder Angela Sothern and Editor Cameron Slater.

The Complainant raised concerns about the accuracy of the article and the content of the recording and said the Publisher was rude and disrespectful and it was irresponsible “to not have ensured the things he was accusing me [of] were correct, founded and evidenced”.

The Complaints Committee found the information presented was an accurate reflection of the recording and included links to other sources. The Complaints Committee accepted the Publisher had made reasonable efforts to ensure that news and current affairs content was accurate and did not mislead in relation to all material points of fact.

The Committee noted the Complainant had approached the Publisher to promote her charity and it considered the recorded discussion was robust questioning from a journalistic standpoint. The Committee concluded that taking into account the context and public interest in the subject, the Publisher had dealt with the Complainant fairly. It noted recording interviews was common and acceptable practice in the media industry.

Taking into account the article was not presented in a way that it would cause panic, unwarranted alarm or undue stress, the Committee ruled the article observed the requirements of Standard 5 Responsible Content and was not in breach of Standards 1, 3 and 5 or Guideline 3(a) of the OMSA Code of Standards and ruled the complaint was Not Upheld.

I doubt even the harshest critic of Cameron will find fault with this ruling, if they read his story and the full decision. I think he raised very legitimate concerns over the charity.

Morepork Home Security

December 16th, 2015 at 9:00 am by David Farrar

Back in May I asked on Facebook:

Any recommendations for home security systems. Not looking for a monitored solution, but ideally one with a loud alarm when triggered, a video camera you can view on your smartphone to see what is happening, and ability to turn the system on and off remotely via your phone. If you have a system like this, interested to know who you got it from, what it cost and how happy you are with it.

I didn’t want a system that when there is a false alarm you pay $100 for a callout fee and even worse that if there is a real burglary it takes 20 minutes for someone to turn up just to check if it a burglary and then call the Police.

I got some names of good alarm and security companies and had a couple come up to do a quote for what it would take to have such a system. The price was close to $10,000.

But then I got lucky. A mate who works for Spark told me that they would soon be releasing a product that sounded like what I was after.  And a month or so later, we got put onto the pre-release trial for Morepork.

A couple of days later a box turned up by courier with our security system. I was slightly nervous about installing it ourselves, but figured we’d give it a go.

They have a video and text installation guide that was really simple to follow.


First up was the control panel. This is what makes the noise, and controls the sensors. And it has a backup battery so that even if someone cuts the power it will still work. It can communicate with the sensors if they are within 200 metres of it. You need to have spark mobile phone coverage as it connects to the Internet via mobile.

The setup was simple. Plug it in, enter an initial code, tap the test button and then change the default code. That’s it!


Next are the sensors. The default package has three, but you can get extras for $40 each. You just affix them to doors and windows where the two elements are normally aligned. If the alarm is set and the door or window is opened, then the alarm goes off.

You can also set them to notify you if you leave a door or window open for more than x minutes. This is really useful I’ve found.

You just follow the guide to affix them and then the control panel tells you they are working. Each one took less than five minutes to do.


Then you install the image sensor. You get one with the package and additional ones are $130 each. The logical place for these are areas where someone may try and enter by.

This takes a bit more work to install. You have to hold them at various heights and angles and then through the web interface get it to take a photo to check it is capturing the right area. We did have a small glitch installing this one, but Morepork has an online chat support line and they sorted the problem out quickly for us.

The camera works day and night (is infrared) and will take a photo when triggered as it is also a motion sensor. You can view these photos almost immediately on your smartphone.

So if an alarm goes off, you can near instantly see if the person who set it off is someone you know.


Finally you have the video camera. Again you get one with the package and additional ones are $180 each. This was the most challenging to install, and we did have some problems as were on the trial. But the support people were great again and sorted it.

Basically you need to get the video camera connected to your home wireless, and then once that is done plug it in somewhere where you are likely to have people going through.

If the alarm goes, it will record two minutes of video automatically. Also you can immediately access it via a smartphone and view the video feed in real time. The camera is also infrared so works at night.

Being able to check the video feed at any time is great, especially when you have kittens!

In addition to the image and video sensors, you can also get motion sensors for rooms where you don’t want images (say bathrooms) but do want to detect movement. Also you can get a smoke alarm added to the package also, so you get notified if it goes off when you are not home.

The smartphone app

The app is the best part of it. So easy to use. You can use your phone to do the following:

  • Set and deactivate alarm
  • Check image sensor
  • Get live video feed
  • Set up multiple users, with their own codes (good for guests)
  • Notify you if you leave home without setting the alarm

You can actually set up almost any combination of alerts based on time of day, activity, lack of activity etc.


There were a couple of glitches with set up, but the support team sorted them out very professionally.

The system is exactly what I was looking for. A great combination of motion sensors, image and video monitoring and instant access through a smart phone so you can decide what to do. If it is a burglar you can call 111 straight away, plus you may get photos or video of them.

I’m on a year’s free trial, but will definitely be carrying on when it is up. In fact am about to order a couple more sensors and a another camera.

The quote I had from a security company was close to $10,000. With Morepork it is $500 for the package and $30 a month for service. So over a year $860. and then just $360 a year going forward. If you want the ability for security guards to turn up to an alarm, that is another $20 a month – but I reckon 95% won’t need that – more for those away from their phone a lot.

I’m really really happy with it. Doing it all through your smartphone makes it so easy, and being able to check out what has happened when there is an alarm is great. It’s given me huge peace of mind, and for a lot cheaper than I thought would be possible. Incredibly happy that someone from Spark put me onto this before it launched as if they hadn’t, I probably would be $10,000 or so poorer by now.

Car being sold by reverse auction

December 15th, 2015 at 2:00 pm by David Farrar

From Dropit:

A brand new Fiat Punto Easy is about to be sold at reverse auction where the price will continue to drop for as long as the one minute auction lasts.

Consumers will need to have “nerves of steel” as they watch the car’s price plummet before choosing when to swipe their smartphone or click their mouse to make the winning bid.

This sales concept, which combines the thrill of gaming with the world of online shopping, is the brainchild of Mount Maunganui company Websoft Ltd who launched their auction website and mobile app Dropit earlier this month.

Dropit sells premium items with no reserves in under one minute. There are 5 auctions per day starting at 10am, on the hour until the last one at 2pm, with the Fiat Punto Easy car supplied by Tauranga’s Farmer Auto Village set to be auctioned on Wednesday 16 December 12pm

Reverse auctions are often good for buyers, but not so much for sellers. You only get to bid once, and you win it. But if you hold off you may get it cheaper – but someone may beat you to it.

Dropit CEO Peter Howell says they expect thousands of New Zealanders to experience their first reverse auction bidding on this premium product.

“It’s going to be a pretty exciting 60 seconds!  One lucky punter is going to secure an incredible deal on what is the biggest ticket item we’ve offered to date.”

Over the past month Dropit players have collectively saved thousands of dollars on high-end goods such as Bose speakers, ipod shuffles, an Xbox 360, mobile phone top up vouchers, a Tom Tom navigation unit, a Beach Cruiser Bike, Phil & Teds buggy and Laneway tickets.

“We auctioned off an iPhone 6 worth $1199 and it sold for $796 – saving the winning bidder over $400 on the brand new item,” Howell says. “A $550 Go Pro camera sold for a stupid price of $147, while Beats by Dre studio headphones worth $520 went for an incredible $191. Kiwi consumers are loving it.”

As I said, great stuff if you’re a buyer. You simply bid what you are willing to pay.

Farmer Auto Village spokesperson Melissa Smith says the sporty Fiat Punto Easy is worth $16,940 and has all the latest safety features plus six speaker audio system and a three year/150,000km roadside assistance and warranty.

“We’re excited to partner with Dropit to help promote this new way of shopping. Their website and mobile app is slick, fun and fast – just like this Fiat Punto Easy car. We can’t wait to see what price it goes for on the day.”

During each daily auction punters can see how many others are vying for the same item. The website and mobile app have been designed to prevent people accidently buying items – only a very definite swipe up will seal the deal.

Very cool to do it via an app so you can see how many others are following.

No tag for this post.

Trump wants to “close up” the Internet

December 11th, 2015 at 3:00 pm by David Farrar reports:

Speaking at a campaign rally at the USS Yorktown in South Carolina, Mr Trump said he would look at “closing up” the internet to stop Islamic State from recruiting Americans.

While most people with common sense understand the enormity of such a task, Mr Trump thinks it is as easy as getting Bill Gates on the phone.

“We’re losing a lot of people because of the internet,” he said.

“We have to see Bill Gates and a lot of different people that really understand what’s happening.

“We have to talk to them about, maybe in certain areas, closing that internet up in some ways. Somebody will say, ‘Oh freedom of speech, freedom of speech.’ These are foolish people.”

He gets more deranged every day.

NZ to get a CERT

December 11th, 2015 at 12:00 pm by David Farrar

The Herald reports:

People will be able to look for an official “cyber security tick” when they use businesses, under a Government proposal to reduce cybercrime.

Those with good cyber security practices would be able to display the tick, in a similar way to schemes that acknowledge healthy food or energy efficient appliances.

The tick scheme is proposed in the Government’s refreshed cyber security strategy, launched in Auckland today by Communications Minister Amy Adams.

Other new initiatives include:
• The establishment of a national “CERT” – a computer emergency response team, or expert group, that handles computer security incidents and will be the first port of call for organisations and individuals needing help.
• Review of the Crimes Act 1961 and other legislation to see if changes are needed to more easily address cybercrime.

Most developed countries have a CERT, and the discussion about having one in NZ has gone on for the best part of a decade. It’s good to see a decision made to establish and fund one.

Blog danger from court ruling

December 7th, 2015 at 12:00 pm by David Farrar

Pete George has blogged:

Tonight I was served with a court order notice instructing me to “take down or disable material from the blog Your NZ that mentions or identified [person’s name] or [company name], or any of it’s associated companies directly or indirectly” and “introduce a full time moderator systems so that no comment that is harmful to said person is placed on the blog “Your NZ”.

I make no comment on the dispute itself between Pete George and the party who gained the court order.

I am concerned however that a Judge has made a ruling that a blogger must “introduce a full time moderator systems so that no comment that is harmful to said person is placed on the blog”.

It is unclear under which statute the Judge has made the ruling. It may be the Harmful Digital Communications Act, but this is not stated in the court order.

I don’t have a problem with an interim order instructing content be removed.  That is a proper and not entirely uncommon thing to occur.

But an order that a blog must introduce a full time moderator system is deeply concerning. If such an order was granted against Kiwiblog, I would probably have to stop publishing.

It isn’t even clear what the court means by a full-time moderator, but I presume it means you must manually review and approve every comment made before it appears. For a large traffic blog such as Kiwiblog, that would kill the discussion threads and possibly the blog.

So again I have no view on the dispute itself, but I am concerned that a Judge has made such a wide-ranging order. If the order is under the Harmful Digital Communications Act, then it shows that the concerns about that Act had considerable validity.

UPDATE: Some readers have said they don’t think the action is under the HDCA as most of it is not in force. The court ruling (which I have seen) does not mention the Act at all. But I am told by someone who knows the plaintiff or complainant that the action is under Sections 222 to 25 of the HDCA, which are in force.

We may have a new cable to Hawaii

December 4th, 2015 at 1:00 pm by David Farrar

Stuff reports:

An announcement by Alcatel-Lucent that it will lay a new subsea communications cable between New Zealand and Hawaii needs to be taken with a “grain of salt”, until more details are known, the Telecommunications Users Association says.

Alcatel-Lucent Submarine Networks said it had signed a contract with Bluesky Pacific Group, a subsidiary of Spanish telecommunications firm Amper, to lay a 9700 kilometre cable connecting New Zealand, Hawaii, the Cook Islands, Samoa and American Samoa, by 2018.

Telecommunications Users Association chief executive Craig Young said the venture appeared to have come out of the blue. 

“We have always wanted another cable up to the United States, but no-one else has managed to make the business case stack up,” he said. 

Alcatel-Lucent was not immediately able to confirm details of the contract, such as what had been agreed, the cost or any conditions.

Young said people should not get too excited the cable would definitely be built, until there was more information. 

If this is really happening, it is great news.

But it is out of the blue. Normally a company announces an intention, and then spends a few years trying to gain enough customers and finance to make it viable.

However Alcatel-Lucent is huge and can finance it themselves, so maybe they have decided to proceed without guaranteed customers.

Alcatel-Lucent’s statement did not indicate whether Bluesky yet had confirmed customers for the cable or regulatory approval for any landing stations.

Financing trans-continental communications cables is usually a multi-year process that involves stacking up advanced sales to customers on a condition a cable is built, and obtaining loans and equity investment.

If the cable is a firm commitment, and not dependent on signing up customers, then it’s real and that is great news.

Is the Govt silly enough to force a $20 parcel fee on us?

November 30th, 2015 at 7:00 am by David Farrar

Stuff reports:

NZ Post may charge people $20 to receive overseas parcels if the Government slashes the threshold under which items can be bought from foreign websites GST-free.

The new fee of between $15 and $20 per parcel would cover the cost of red tape associated with collecting tax at the border, NZ Post said in a document obtained under the Official Information Act.

People could also expect more delays receiving parcels from overseas, it said.

Customs Minister Nicky Wagner is due to release a consultation document in April that will canvass lowering the $400 threshold under which most overseas internet shopping purchases can be made free of GST and duty.

Retail lobby group Retail NZ has been pushing for the threshold to be slashed or abolished, to put domestic retailers and overseas sellers on a level playing-field paying GST.

But NZ Post said that if the threshold was slashed from $400 to $20 and tax checks continued to take place at the border, then it would need to invest $20 million in a brand new parcel warehouse that would also cost several million dollars a year to operate.

NZ Post said it already incurred costs of $700,000 a year helping facilitate the payment of GST and duties on parcels entering New Zealand.

But if the threshold was slashed it would not be able to absorb the increased costs, it said.

“Based on our preliminary analysis, New Zealand Post’s cost recovery charge is likely to be in the range of $15 to $20 per parcel held at the border for GST collection,” it said.

That meant consumers might expect to pay $65 in administrative charges on low-value items they bought from overseas if an existing $49.25 Customs clearance and biosecurity fee also applied to all items under any new threshold, it said.

Buy $30 of books from overseas and the Government would force you to pay another $65 to receive them. This would be as popular as cold vomit. I hope they see sense.

It is possible there is an economic case for a minor reduction in the de minimis threshold of $400. Maybe at $300 the extra revenue would still exceed the compliance costs. But a reduction to anything like $20 would be economic stupidity and become very hated.

Newspaper sales plummeting

November 28th, 2015 at 2:00 pm by David Farrar

Richard Harman writes at Politik:

The number of copies of New Zealand daily newspapers sold over the past five years has plunged by 23%.

Meanwhile Kiwiblog readership is up 18% from five years ago.

According to the media industry website, “StopPress”, Stuff averaged 1,733,000 visitors per months to its site while the NZHerald received 1,315,000 visits.

Averaged out that equates to about 80,000 a weekday on Stuff and 61,000 a weekday on the NZHerald.

Kiwiblog has around 12,000 a weekday. Not bad with no staff, just me and some helpers.

WhaleOil has numbers not far off the NZ Herald, and with again no paid staff.

Eight Councils moving forward with online voting option

November 19th, 2015 at 3:00 pm by David Farrar

Louise Upston has announced:

Five district councils and three city councils have been invited to demonstrate they can meet the government’s requirements for an online voting trial. If successful, the councils will be able to offer online voting alongside postal voting in the local government elections next year.

Whanganui, Rotorua, Matamata Piako, Selwyn and Masterton districts have confirmed their interest as well as Porirua, Palmerston North and Wellington cities.

“The councils must meet a strict set of requirements before they can offer online voting,” says Associate Local Government Minister Louise Upston. “They need to show they will manage the risks – notably issues of security and fairness – and they must preserve public confidence in the integrity of the electoral system.”

That’s a good mix for a trial of small and large. The population in each Council is:

  • Wellington 191,000
  • Palmerston North 80,000
  • Rotorua 65,000
  • Porirua 52,000
  • Selwyn 45,000
  • Whanganui 42,000
  • Matamata Piako 32,000
  • Masterton 23,000

Online voting will be an option for those who want it. Postal voting will still be available and no doubt the method used by the majority.

Online GST

November 19th, 2015 at 10:00 am by David Farrar

Todd McClay announced:

Revenue Minister Todd McClay says measures proposed in a tax bill introduced today are about fairness and equity.

“It is about creating a level playing field for collecting GST and putting New Zealand businesses and jobs ahead of the interests of overseas suppliers”, says Mr McClay.

These measures are an important first step in the Government’s efforts to deal with increasing volumes of online services and other intangibles purchased from overseas suppliers that should, under New Zealand’s tax rules, be subject to GST.

“GST should apply to all consumption that occurs in New Zealand.  This is what makes our GST system fair, efficient and simple,” says Mr McClay.

“The growth of online digital and overseas services means the volume of services on which GST is not collected is an increasing challenge – for the Government in terms of the GST revenue foregone, and as a matter of fairness for New Zealand suppliers of services and intangibles who must account for GST in their pricing structures.”

Mr McClay says the proposed measures will apply GST to cross-border “remote” services and intangibles supplied by offshore suppliers (including e-books, music, videos, and software purchased from offshore websites) to New Zealand-resident consumers, by requiring the offshore supplier to register and return GST on these supplies.  

I haven’t got a problem with this. I will have a problem if the de minimis threshold on imported goods is reduced to such a low level, your books and minor purchases are stopped at the border.

The key issue here is how many overseas retailers will actually agree to register. Some will, but not all. The FAQ notes:

Why would offshore suppliers comply with the proposed rules?

When similar rules have been applied in other countries, offshore suppliers – particularly large international suppliers that account for the majority of cross-border services and intangibles – have demonstrated a willingness to comply. For many of these companies, failure to comply with their obligations would pose a significant risk to their reputation.

So I imagine Amazon, Apple will comply. But will Ebay as they are just an auction house, not a retailer?

The bill is here. It says a supplier will treat a customer as being from NZ if there are at least two non-conflicting pieced of evidence, from the below:

  • the person’s billing address:
  • the internet protocol address of the device used by the person or another geolocation method:
  • the person’s bank details, including the account the person uses for payment or the billing address held by the bank:
  • the mobile country code of the international mobile subscriber identity stored on the subscriber identity module card used by the person:
  • the location of the person’s fixed land line through which the service is supplied to them:
  • other commercially relevant information.

The IP address inclusion could be problematic. They are not necessarily a reliable guide to where someone is from. It also means that someone who uses software to mask their country of origin (very useful if you wish to view videos from other countries, or subscribe to US Itunes or Netflix) could end up breaching the GST Act. However a prosecution would only occur if the GST amount was substantial.

The most powerful women on Twitter?

November 6th, 2015 at 2:00 pm by David Farrar

Stuff reports:

If Michelle Obama wants to up her game on social media, she could do worse than turning to former New Zealand prime minister Helen Clark for a few tips.

Clark, who heads the United Nations Development Programme, has been named the sixth most influential female leader on social media by online business, economics and finance magazine Richtopia.

Her ranking on the Top 100 list puts her ahead of the First Lady of the United States, who came in at eighth, and Huffington Post editor-in-chief Arianna Huffington, who took out the ninth spot.

The list is of course subjective. Let’s look at something perhaps more objective, such as number of followers on Twitter for the top 10:

1. Hillary Clinton – 4.61 million
2. Oprah Winfrey – 29.5 million
3. Nancy Pelosi – 0.68 million
4. Maria Shriver – 2.33 million
5. Dilma Rousseff – 4.17 million
6. Helen Clark – 0.10 million
7. Katie Couric – 1.38 million
8. Michelle Obama – 5.39 million
9. Arianna Huffington – 2.16 million
10. Emma Watson – 19.8 million

So I don’t think Michelle Obama will be too worried!

Draconian UK powers

November 2nd, 2015 at 4:00 pm by David Farrar

The Telegraph reports:

Police are to get the power to view the web browsing history of everyone in the country.

Home Secretary Theresa May will announce the plans when she introduces the Government’s new surveillance bill in the House of Commons on Wednesday.

The Telegraph understands the new powers for the police will form part of the new bill.

It would make it a legal requirement for communications companies to retain all the web browsing history of customers for 12 months in case the spy agencies or police need to access them.

Police would be able to access specific web addresses visited by customers.

That’s outrageous. This is like requiring phone companies to record every phone call made by customers.

I don’t have a problem with ISPs being required to keep a history of what IP addresses were used by which customers at which time. This allows people who do illegal things online to be identified.

But requiring them to retain your web history is gross over-reach and a horrendous privacy breach.

NZ a stand out for digital evolution

October 27th, 2015 at 7:00 am by David Farrar

Trajectory Chart 2013 1280x930

Tufts University has looked at how different countries have done with digital evolution. NZ is in the right quadrant, of the stand outs.

Also pleasing is we have been moving up the rankings since 2008.

Latest Internet stats

October 18th, 2015 at 2:00 pm by David Farrar

Stats NZ has released their latest ISP survey. A lot of change over the last four years.

  • Broadband has gone from 87% to 97% of connections
  • Fibre connections up to 105,000 now
  • Percentage getting over 8 MB/s download gone from 67% to 98%
  • Percentage getting over 24 MB/s download gone from 2% to 23%
  • Percentage getting over 10 MB/s upload gone from 0% to 19%
  • Connections with no data cap gone from 2% to 33%
  • Total data use gone from 13 PB to 84 PB
  • Number of mobile phone Internet connections gone from 1.9 million to 4.0 million
  • IPv6 availability gone from 30% to 48% of ISPs

The battle for the IP chapter

October 8th, 2015 at 2:00 pm by David Farrar

This will be a long blog post, but an important one. It is about the TPP, the IP chapter, and how a group of NZ organisations actually managed to help beat back the US Government and the corporates they were fighting for.

First I want to talk about critics of the TPP, and how you can divide them into three categories. They are:

1 – Opponents of all trade deals

There are some people who are opposed to all trade deals. They have a honest belief that either trade deals are bad, or trade is bad. A couple of examples are Jane Kelsey and the Greens.

Jane Kelsey has opposed (as far as I can tell) every trade deal NZ has ever signed up to. It doesn’t matter what the details are, she has campaigned against it. She has a world view that is basically protectionism is economically good, and no amount of evidence will sway her views.

Kelsey has every right to her views (though I do grumble that she seems to spend a large proportion of her time as a taxpayer funded academic running campaigns), but the reality is that Kelsey will never influence the details of a trade detail, because people know that nothing they agree to will ever stop her being a critic. She can make a deal more unpopular with voters, but no one in Government ever asks the question “Will this satisfy the demands of Jane Kelsey”.

I’m not trying to personalise it on Professor Kelsey. There are many others like her, who are against petty much all trade deals.

The Greens have voted against against (I think) every trade agreement. Their opposition seems to be more because of their belief that trade harms the environment, and we should grow and produce everything we need locally. So again, no one ever asks what is needed to get the Greens do support a trade deal – it is basically impossible.

2 – Opponents because of who the Government is

This is basically the Labour Party, and some of their supporters. If Labour were in Government I have no doubt the TPP would look very similar to what was announced this week, and they would be signing up to it. They are not opposed to the TPP (well not most of their caucus), but because National is in Government they just see it as a weapon to attack with. Just like the flag referendum.

I don’t mind oppositions attacking Governments for things which they honestly disagree on – for example labour laws and the like. But it does get tiring when you know their opposition is only because they are not in Government themselves. It is worth remembering the TPP started under Labour. They also did a great trade deal with China, which has been hugely beneficial. If it was National that had done the trade deal with China, I suspect Labour would be condemning it.

So in the end these opponents do not get much traction either, because their opposition is more about who the Government is, than what is in the TPP. That doesn’t mean their criticism do not have validity, just that their motivations are more about bashing the Government.

3 – Opponents of some proposed details

The last category is what I want to focus on. It is individual and groups who have been critical of what might be in the TPP, because they think certain aspects would be bad for their area of interest if included.

These opponents are not against the TPP regardless of what is in it. They’re not for it either. They’re people saying “We don’t want X in there” but if X is not there, then we don’t have a view on it.

That might be a health group on keeping the Pharmac model, or ICT groups on the details of the e-commerce and intellectual property chapters. The latter is what I want to focus on, and tell a story about the battle here.

The US wish list on intellectual property

The first post I can find I did on the TPP was about how despite being a big supporter of free trade, I was concerned about the US wishlist in TPP. I quoted Rick Shera on how it could affect us:

  • Rights holders would be allowed to prevent parallel imports
  • Massive extension of terms, from life of author plus 50 years, to 70 years
  • Circumventing a Technological Protection Measure (TPM) will to be a criminal offence even if the work it protects is in the public domain or you want to exercise fair dealing rights like educational use or current affairs reporting
  • The return of guilt upon accusation three strikes Internet termination laws
  • Forcing us to reverse the decision recently taken to exclude software from being patentable
  • Introducing statutory damages (which give rights holders windfall damages up to 3 times their actual losses)
  •  ISP policing of IP rights including a requirement for ISPs to give up their customers’ identities when they receive a mere allegation from a rights holder
  • Criminal liability even where the infringement has no commercial value at all
  • Pushing Courts to impose imprisonment as the default sentence for infringement even where no monetary benefit is obtained

These provisions would have been truly horrible, if they had been agreed to. The good thing is that with the exception of the extension of the term (which is more a copyright than Internet issue) the US got beaten back on pretty much all of this. I’m not saying the IP chapter is great (there are still a couple of areas of concern which we need to see the detail on) but this truly horrible stuff is not in there – software is not patentable still, parallel importing remains legal, you can circumvent TPMs for legal purposes, ISPs don’t face extra liability, no changes to our three strikes law for filesharing infringing (which rights holders don’t like).

So why did the US not get its way on much in this chapter? Is it because it was an unimportant chapter? No, far from it. For several years it has been said that the IP chapter will be one of the most difficult. Many in the media thought the big battle was Pharmac, but in reality that was never at great risk. The PM and others had often said that the IP chapter was one of the big challenges.

This was a concern, as those of us against the US demands, were worried that the IP chapter would be traded at the lost moment with the US, in order to gain a better deal elsewhere. We wanted to stop that happening, and make the price of compromising on the IP chapter too high, so what did we do.

By we I mean groups such as InternetNZ, IITP, TUANZ and NZ Rise. I don’t speak for any of them, this is just my views as someone who was involved.

Set the tone right

It was important that we were not seen as just against TPP regardless. We were against an IP chapter that was bad for NZ. While we would work with other critics such as Jane Kelsey (and inform them of our concerns), it was vital not to be seen as anti-TPP regardless. You lose influence if you do that.

We also tried to have it about ICT and Internet industries being important for NZ’s future and don’t trade away their interests for those of commodity industries.

Be specific

Another key was not just to rant about secret negotiations (even though criticism of the process was made), selling out sovereignty, attacking Hollywood corporations. It was to be specific as to what measures were opposed, the impact on NZ of them, and putting up alternative provisions.

Meet NZ negotiators

Many meetings were arranged with negotiators with MFAT and MBIE. And they were extremely professional, and useful. The negotiators do not set policy (Ministers do), but they will tell you what their position is, listen to your concerns, and make sure they understand them.

They would also share information on the negotiations. They are not allowed to sit down with you and show you a copy of the proposed texts (unless every negotiating country agreed). But they could tell you in some detail what the issues are, and what the NZG position currently was. And thanks to texts being leaked on Wikileaks, we actually got verified that the NZ negotiators were advocating exactly what they told us they were, and resisting the US demands.

They also were useful in giving us some idea of which countries were with us on these issues, and which were not, and which were yet to take a position. Again, not in exact detail which would breach confidentiality, but some useful steers.

The key here is that while the exact negotiating texts were secret, stakeholders could gain information on proceedings by engaging with the process – and not just corporates, but civil society groups also. Engaging with the process works, rather than just shouting slogans.

Also at least one meeting was held (possibly more) with the Trade Negotiations Minister, Tim Groser. I did not attend, but understand he was very up to speed with the issues around the IP chapter. Meetings were also held with the ICT Minister, so she could be a voice for the industry if Cabinet discussed details.

It also became apparent to me that other Ministers, up to and including the PM, were aware of the issues around the Internet and the IP chapter. In fact as I said earlier, the PM said fairly early on that the IP chapter might be the toughest.

Meet TPP supporters

We met supporters of the TPP such as NZ International Business Forum (Stephen Jacobi). We explained that our potential opposition was issues based. If certain provisions were in the TPP, we would be opposing and criticising it. But if they were not there, then mostly we would have no view.

We know that most business groups would support the TPP, regardless of the IP chapter. What we wanted to get across, was that if they could use their influence to get an IP chapter that was more palatable to us, then there would be less domestic opposition.

The meetings were cordial, and useful.

I can’t recall exactly other meetings we had, but off memory there was some dialogue also with the US Embassy and Federated Farmers.

Attend the Negotiations

Staff were sent to some of the international negotiations rounds. Why, if you are not allowed in the negotiating room? Well, a lot happens in the side events and public forums. You can set up stands handing out information on your views, you can chat to NZ negotiators, you can get to meet the negotiators from other countries, and also develop links with other third party groups who share your concerns.

The staffer who attended some of these for the NZ group did an excellent job in building networks, organising events and getting our message across. It was an excellent investment in sending her.

Build a coalition locally

A local coalition was set up – called the Fair Deal coalition. It was set up to critique and oppose the US demands, but also to put pressure on the NZ Government to stick to its position. We wanted to make any backing down politically painful. A quote from the site is:

The US wants copyright standards that would force change to New Zealand’s copyright laws. We want you to know more about what’s at stake so that you can have a say now, before the deal is done.

The good news is that we know – from another leaked document – that the NZ copyright team went into TPP talks looking for fair copyright (and other intellectual property) standards. Now is the time to stand behind our team and  support a Fair Deal for New Zealand.

NZ members were InternetNZ, NZ Rise, Creative Freedom Foundation, Blind Foundation, TUANZ, Consumer, IITP, Trade Me, NZ Open Source Society, LIANZA, Tech Liberty and Scoop.

The tone wasn’t to attack the Government, but to pressure the Government to stand firm.

Build a coalition globally

At the beginning of the negotiations, NZ was quite exposed. The US was pushing hard for their wishlist, NZ was the most staunch against, and we had few allies. Many were not focused on it much, and Australia even seemed to be backing the US.

The NZ negotiators made it pretty clear that if we are alone there, then we need to compromise more. So we went about building a wider coalition.

Through attendance at the actual meetings, links were made to other groups in the countries negotiating the TPP. An alliance was formed with Public Citizen, Open Media, Australian Digital Alliance, Consumers International, EFF etc. Gradually more and more countries came to siding with the NZ position.

Note I am not suggesting this is solely or even mainly due to the work of the alliance, but I do believe it did have an impact.

Also crucially, we tried to soften the US position. Their position was reflecting the demands of Hollywood associated creative industries. In fact many of the staff in the IP area of the Trade team, had worked for lobby groups there. But then big US IT companies started lobbying, saying they did not support some of the US position. This helped weaken the US stance, as it was no longer unambiguous what Us businesses wanted.

Host the negotiations

Auckland hosted the 15th round of negotiations in December 2012. This was great as it gave us a great opportunity to interact. There were a number of initiatives as part of that, but the most significant was we hosted a lunch for all the IP negotiators from all the countries. I think they all had someone attend, and most importantly the US did.

Over the lunch a few of us spoke, on various aspects and outlined what our issues and concerns were. My role was to talk about the politics, and explain how NZ had just had several big fights on IP law – the blackout campaign, ACTA, patent law, a new copyright act – and I doubted any Government would want to be explaining why the hard fought compromise that had been achieved was now going to be upended. I also talked on Dotcom and how he is alleging Key and Obama did a deal with Hollywood to lock him up, in exhchange for the TPP – and while that may be nonsense, could they imagine a NZ PM standing up and saying “We’ve decided to change our copyright and IP laws to please Hollywood”. The point was that if you demand something a Government is simply politically unable to deliver, then you won’t get an agreement (like Canada on dairy – political cost too high).

And this is partly why the only major change appears to be length of copyright, rather than stuff more directly affecting the Internet. And don’t get me wrong – I am against the extension, but from my point of view it is less harmful than what else the US was demanding, and if we had to compromise on something – that is the lesser evil from an Internet point of view.

Constructive opposition does make a difference

The point of all this, is that constructive engagement, criticism and even at times opposition can make a difference. When you work with the Government and negotiators in good faith, you can have influence and get better outcomes (even if still sub-optimal) than without your involvement. You do a mixture of loud noisy activism (postcard campaigns, petitions, public meetings) and behind the scenes diplomacy – but always with a consistent principled message that we are not anti TPP (or pro TPP), just anti these provisions.

I’m actually very proud that the NZ ICT industry and civil society managed to run a very effective and principled campaign, that was overall remarkably successful – especially against the power of the US Government, and very wealthy and powerful firms in the US. One can be cynical about aspects of politics (such as the secrecy), but one can also celebrate that spending time and money on sticking up for your beliefs can work, and logical well reasoned arguments can beat vested interests.

Again do not take any of this to suggest the ICT industry now thinks the TPP is great. I don’t speak for them, and from what I have observed views are as diverse within it, as elsewhere. Some still think it is the worst thing ever and the end of democracy, and others think it is a great deal. I personally think it is an overall positive deal, and actually pleasantly surprised that we managed to get a deal, with most (not all) of the nasty IP provisions defanged.

But there is a lesson here for other groups, and individuals. Constructive opposition and criticism can achieve far far more, than just blanket negativity and attack.

The groups involved in the Far Deal coalition, both locally and globally, should be proud of what they managed to achieve, against formidable odds.  Also I give credit to the professional negotiators from MFAT and MBIE who I think did a very good job of holding the line.


Great targets for rural broadband

October 7th, 2015 at 12:00 pm by David Farrar

Amy Adams announced:

Recognising the ever-increasing demand for high-speed broadband across New Zealand, and its importance to regional growth, the Government has today announced a bold new connectivity target for areas outside the UFB footprint.

Under this target virtually all New Zealanders, regardless of where they live or work, will be able to access broadband at peak speeds of at least 50 Mbps by 2025, Communications Minister Amy Adams has announced. …

By 2025, the Government’s vision would see:

  • 99 per cent of New Zealanders able to access broadband at peak speeds of at least 50 Mbps (up from 97.8 per cent getting at least 5 Mbps under RBI)

  • The remaining 1 per cent able to access to 10 Mbps (up from dial up or non-existent speeds).

This will be greatly welcomed by those outside the areas where fibre is being laid. Let’s look forward to the death of the last dial up account!

A new direction for TUANZ

October 6th, 2015 at 1:00 pm by David Farrar

TUANZ have announced:

Building on 30 years of representing telecommunications users, TUANZ is setting out in a new strategic direction to ensure New Zealanders can make the most of the digitally connected world.

TUANZ vision is to work collaboratively with industry and government to make sure that by 2020 New Zealand is among the top ten countries for business use of digital technology.[1]

TUANZ Chair Pat O’Connell says TUANZ has always been and will remain an independent and professional organisation that represents the interests of the users of digital technology.

“Our role will continue to be to put the business user at the centre of industry and government decision making in a sector that is going to define our economy for the foreseeable future”, says O’Connell.

This is a sensible new direction for TUANZ.

Since the 1980s TUANZ has been at the forefront of advocating for better deals for businesses and consumers in telecommunications. They’ve played a big role in helping us get to where we are where we pay a fraction of what we used to.

But the major regulatory battles are won. Local loop unbundling is done and dusted. Telecom has had first operational and now structural separation. Mobile phone interconnection rates have fallen away. Competition is not perfect, but our regulatory settings are now pretty good.

So a shift in emphasis from the regulatory issues to usage and technology is sensible.