Kiwiblog

Labour yesterday announced a formal position on mobile termination rates:

The Government should put consumers first and regulate mobile termination rates to keep call costs down, Labour spokesperson for communications and IT Clare Curran said today.

“High mobile termination rates are a barrier to entry for new players in the market, which leads to less competition and higher prices,” Clare Curran said.

“While Vodafone and Telecom have now offered to lower termination rates by around 80 per cent, it still does not go far enough to reduce the major issues for new entrants.

I think it is a good thing that Labour have learnt from their mistakes, when they did a deal with the two telcos in 2007, rather than accept the advice to regulate.

Slightly amused that their formal policy stance comes just days after Clare had a whack at Matthew Hooton for implying Labour support the Drop the Rate, Mate campaign.

The Drop the Rate, Mate campaign also yesterday released their submission to the Minister, including some research done by Curia of 400 mobile phone users. Key findings were:

• Only 18% of respondents wanted the Government to accept the binding promises of Telecom and Vodafone, while 78% wanted the Government to regulate
• 79% agreed that Telecom and Vodafone are overcharging New Zealanders
• 85% agreed with the proposition that it should cost the same to call someone on a different network, as to call someone on your own network

The full results are here – EXCELTIUM MOBILE PHONE RESULTS MARCH 2010 PUBLIC.

Chris Barton in the Herald is not shy with his opinion of what the Government should do:

So far, you have to say, Joyce has played with an exceedingly straight bat. But it won’t be easy negotiating the quagmire of a split recommendation by Commerce Commissioners on mobile termination rates. Two argue for putting heads in the sand while one voice of reason says enough is enough – Vodafone and Telecom have had more than enough time to sort this out and have, time and again, shown they can’t be trusted.

Joyce will be familiar with the sordid last-minute deal stitched together between new mobile entrant 2degrees and Vodafone last year. While the public isn’t allowed to know about this venality, anyone who cares to can find it online (search under “NZ Cellphone racket”). It shows that Vodafone will move if it has a gun to its head. Joyce will also be familiar with www.droptherate.org.nz and www.fibretothedoor.co.nz – two campaigning websites where the public is helping the minister make up his mind.

Go there at once.

What fed-up consumers want minister, is Clint Eastwood’s Dirty Harry. For some of us, it’s so bad, we don’t just want Clint to pull out his .44 Magnum and ask whether the punk feels lucky. With Telecom and Vodafone, we want him to pull the trigger.

The challenge for the Minister, is how quickly can a regulated price be established, if he chooses to regulate. The undertakings would take place more quickly. However the likely regulated price would see prices by 2011 drop further, and remain lower.

Clare Curran at Red Alert has blogged that Labour is not supporting the Drop the Rate Mate campaign, about mobile termination rates, and is annoyed at a statement from Matthew Hooton which implies they are.

Matthew commented in response that he has met with many Labour MPs who are supportive but apologises for any misunderstanding if this has been taken as presuming to speak on behalf of Labour formally.

Clare has responded that there is a difference between a public position and “what individuals may say in a meeting about an issue they don’t know much about”.

Amusingly if you go to the Facebook page for Drop the Rate Mate, a prominent friend is David Cunliffe – who was IT and Comms Minister for Labour in the last Government.

I hope Clare is not suggesting David (who did an excellent job in my opinion in the portfolio) was one of those MPs talking about an issue they don’t know much about

A mixture of good and bad in Clare Curran’s blog on productivity:

We have a productivity taskforce set up by the National Government and led by the ignominious Don Brash. It’s likely to come up with an argument for economic growth which is about selling our state assets and keeping wages down, or cutting jobs to create more profits. Because that’s what the conservative side of politics believes productivity to be. Gordon Campbell’s piece on this a couple of months ago is worth reading.

Labour, on the other hand, is an enabler. We want economic growth. We don’t want it at the cost of creating greater gaps in our society between those on no income and those who do have one.

This is just puerile. National bad. Labour good.  She declares that the conservative side believe productivity is about cutting wages and jobs. Slogans are not substitute for analysis.  Fortunately we get this later on:

1. Open government. In particular open software.

The NZ Government currently spends around $2 billion a year on IT, in software, hardware and all the services that go with it.  We have lots of government websites, but we don’t have an open source policy and we don’t practice open government. We have attempted to harmonise govt IT and networking through the previous Labour Govt’s digital strategy. Much of that appears to have been ditched. There’s an awful lot more work to do in this area.

The US government, under Obama, has made a commitment to cut its total IT spend of $76 billion by between 50% and 80% by driving its systems into open source and cloud computing.

Could we save $1 billion?

I think there is considerable potential in this area, and delighted to see Labour take an interest in it.

2. Working from home. Telework

Ten year’s ago, a study funded by the Auckland Regional Council found that spending $3 million on an awareness raising programme about the benefits of telework targeting employers, could take 10% of Auckland’s traffic off the roads. There’s research overseas demonstrating that you can save up to 15% in workplace productivity and lower overheads through flexible arrangements with your employees working from home. And then there’s the greenhouse gas savings, and the boost to local communities. Let alone the social capital through having more parents at home, more often.

Yep – very much the way of the future. I will point out this is one of the reasons why National pledged $1.5 billion for fibre to the home in 2008, as compared to Labour’s $340 million.  I think the fibre rollout will see a very significant increase in people working at least some of the time from home, and some smaller firms doing away with offices all together. In fact some have already started.

3. Saving time. Improving our basic computer skills

Consider this. The UK National Health Service employs 1.2 million people. I’m told they recently put 100,000 staff through a programme to upgrade their basic computer skills, called the International Computer Driver’s Licence (ICDL). This is a reputable programme, developed through the European Union.

An analysis of its effectiveness showed they’d saved 38 mins/day for each employee. Or four weeks per person per year. Crikey! And that was because each staff member knew how to work better with the software they used every day at work and how to solve their own problems.

Not a bad idea also.  We agree on the details, if not on the rhetoric!

Clare Curran has blogged at Red Alert:

Communications and IT Minister Steven Joyce has just told the House in question time that there has been no delay in rolling out ultrafast broadband.

It’s amazing how this government can tell a barefaced lie with a straight face. The election was almost a year ago. The $1.5 billion delivery of broadband to 75% of New Zealand homes was a core election promise. Supposedly ready to go!

If Clare is going to use terms like bare faced lie, I’m going to have to point out how that description is one which better applies to her own blog post.

John Key announced the ultrafast broadband policy in May 2009. I was there when he did it. So was most of the industry. And they know what John Key said. So they get very puzzled when Clare claims the broadband package was supposedly ready to go. Let me quote John Key’s speech:

Delivering on these five principles will require a carefully thought-through and negotiated investment and regulatory model. National will conduct these negotiations in our first year of government.

2009 is the first year of Government. If anything, Steve Joyce is three months ahead of schedule. Everyone in the industry knows that National said the policy was a policy about what they wanted to achieve, and they would take 12 months working out the best way to achieve it.

And frankly it is somewhat bizarre that Clare keeps demanding that decisions should have been made quicker, because she has also blogged what an incredibly complex area this is. If the Government had made decisions more quickly, I suspect Clare would criticise that. Being in Opposition does not mean you have to criticise everything.

Clare then compounds things by claiming:

They axed the previous Government’s programme which was poised to rollout and put everything on hold for months while they recast a plan which now looks remarkedly like the previous government’s. That’s taken all year.

Now I was a big supporter of most of what the previous Government did in the Communications/IT field. But it is not at all correct to claim the previous Broadband Investment Fund is the same as what National is doing. The previous fund was not for a national fibre network reaching 75% of New Zealanders. It was $325 million (compared to $1.5 billion) and was not for fibre to the home. It was for mainly broadband to businesses and MUSH (municipalities, universities, schools and hospitals).

Now that was a good fund and certainly better than doing nothing (from my point of view). But to be blunt National trumped that with a policy that was far more ambitious and with far more funding – around 400% more.

Personally I suspect the former Minister, David Cunliffe, would have loved to have matched or exceeded National’s policy – but the simple fact of the matter is he couldn’t get the extra funding out of Clark and Cullen.

So while there are of course some similarities between the former BIF and the current Government’s proposal (mainly that they both use a regional competive process which is hardly surprising) they are in no way the same plan. And again, most people in the industry know this.

This government talks about investing in infrastructure. It seems to think that infrastructure is purely the network of roads, wires or fibre required to create a physical structure. What Mr Joyce, who is also the Associate Minister of Infrastructure, doesn’t seem to get, or pays lipservice to, is that with broadband, you can just invest in the fibre. You’ve got to invest in what will pass through the fibre. Services that will benefit society. And that’s the government’s role.

I’m not sure what Clare is suggesting here but I don’t want the Government competing with telcos, ISPs, Sky TV etc etc as the applications and services level. The infrastructure level, which is inherently non-competitive in most cases, is where I want the investment to happen.

It’s unknown whether the private sector investment required to make up the shortfall between $1.5 b and $6 billion will manifest itself, because its unknown what level of public investment will be made in the health, education and enregy sectors which will stimulate demand. That’s the real question.

No it is not. Expecting the Government to declare today what services it might seek to deliver in ten years time over the network is incredibly naive – especially considering the pace of change in the Internet industry. Any declaration today is likely to be more inaccurate than a Treasury forecast of the deficit!

The private sector will make their investment decisions on the basis of international experience and their own market research. They will not make them on the basis of what the Government may do online in ten years time.

Clare Curran floats four copyright ideas:

Education about copyright is very important. Government has an important role to play and copyright education should become a part of the school curriculum and be integrated right through our education system. A public education campaign is also needed for people to understand that protecting the rights of people who create content is important.

I’ve got no problem with that per se, but would caution that education campaigns can become own goals. The nasty messages that get played at the start of videos usually result in derisory laughs.

When consumers can easily and reasonably purchase all the films, TV shows and music they want legally online, then an education campaign on why people should only do legal downloads etc would be useful. But if the only way someone can view a TV show is to grab it from a bit torrent network, then no amount of education will change that.

We should enable people to access the information/material they seek. And consider introducing a licensing fee attached to internet service provider (ISP) connections. This fee would then be collected and distributed by an external agency amongst copyright holders.  In order to work, it would need the buy in of all ISPs and rights holders. It would likely be focussed on New Zealand copyright content first.

I think the future is going to be some sort of bulk license fee, paid through the ISP. Something alone the lines of $15/month for all the music you want.

However such a licensing fee should be a voluntary agreement between Internet users, their ISPs and rights holders. I would be very against an additional fee being imposed on all Internet users regardless of whether or not they wish to download material. A 75 year old occassional web browser should not have to pay for the 19 year old who downloads scores of songs a month.

Establishment of an independent rights agency to distribute fees and rule on disputes.  We still need an enforcement regime and a rights agency could also have the power to investigate and adjudicate on copyright disputes and alleged infringements aka the Section 92A model. However, I am of the view that internet disconnection is not a viable option. It simply won’t work and will drive hard core copyright infringers more underground. Financial penalties are more likely to work.

I agree that that financial penalties are a more appropriate penalty for infringers. I think it is excellent Labour appear to be ruling out supporting legislation that has Internet termination as a penalty.

A commitment to protect NZ content first. It’s our heritage, and the people who create NZ content must be able to make a living from their work and have that work valued.

Can’t really debate that one, as it is one of those apple pie statements such as “Education is good” which doesn’t mean a lot.  But I do think Clare is missing a few key words. It should be “must be able to have the opportunity to make a living from their work”. No-one is guaranteed the ability to make a living from their content. Otherwise us bloggers would be earning a lot more!

The Dom Post reports that the Government’s review of s92A has been restricted to finding a better process to terminate Internet accounts of copyright infringers, rather than allow a debate on whether termination of Internet access should be a legislated penalty.

It is distressing that the Government is pushing on with such a controversial provision, when the rest of the world is rejecting it. The French Constitutional Court just threw out a similiar French law as unconstitutional.

Child pornography is a far more henious problem than copyright infrngement, but Parliament does not have a law stating that people convicted of child pornography must lose their Internet account.

Run an online fraud, and you will not lose your Internet account – you will just be punished for the actual offending.

Telecommunications Carriers Forum independent chair Richard Westlake says it is disappointed a promised review of the law and its implications has not occurred. “There’s been nothing said or seen which would imply that level of broader consultation and re- thinking has taken place or is in place. There is a working group but we’re concerned the issue has been pre-judged.”

Richard Westlake is correct. The review has been given narrow terms of reference – to come up with a termination model. It is not allowed to come up with a model that does not include termination of Internet access.

Labour’s Clare Curran says:

Terminating internet accounts is a major point of contention. Financial penalties would likely be more effective, she says.

And Clare is correct on this point. No one at all is advocating there should be no penalty for copyright infringers. But the penalty should be a fine that matches or exceeds the value of the infringed material.

Judith Tizard was rightfully blamed for the original s92A. If the Government comes up with a new version that is not much of an improvement, then they will be the ones blamed.

What would be useful is for the Government to clearly state that they are open to solutions that do not involved termination of Internet accounts.

Labour MPs hosted a roundtable on Tuesday evening to discus copyright issues – not just S92A, but longer term issues over how copyright law intersects with modern technology.

I’ll touch on the politics of it more in my NBR column, but this is smart opposition politics, and a good move for Labour. And I’m not just saying that because I was one of those invited – I’ve spent enough time in the Opposition meeting room to not feel a need to visit it often!

The turnout from Labour was impressive for what is not a top tier issue. Comms/IT spokesperson Clare Curran moderated. Arts/Culture spokesperson Grant Robertson was also there as was Lianne Dalziel who chairs the Commerce Committee that will presumably consider the Government’s law change. Maryan Street also there for a bit (Maryan was on the original Commerce Committee and was a key player in getting some good changes made at the select committee – which sadly were later overturned) as was Trevor Mallard and also David Cunliffe. So four former Ministers and six MPs in total.

There were a couple of dozen stakeholders there, and the discussion was useful. The first half probably saw more heat than light, but as time went on there were quite a few areas of agreement. Lynn Prnetice from The Standard and myself even agreed several times

Pretty much everyone agreed the current law is hopelessly inadequate for modern day copyright infringement issues. The law is only really set up to deal with situations where people make money infringing copyright, and is based around economic remedies. But a major problem today is infringement for personal use.

Everyone in the room said that there should be some cheap and quick (but fair) process where personal infringement offences can be adjudicated and dealt with. No one at all said one should be able to avoid paying for works by downloading. The Internet people all thought fines would be appropriate penalties – maybe tied to the value of the work they have infringed plus a penalty. It was thought maybe it could be like the IRD – if you download 100 songs that cost $1 each you’d be fined the $100 value plus maybe 50% penalty so $150. I did joke that people could just disclose their volume of ilegal downloads to the IRD on their tax returns

The rights holders rep said he would prefer Internet disconnection than fines as a sanction, as they think it is a bigger deterrent. I did get the impression though that any sort of meaningful sanction would be a step forward for them.

Quite a lot of discussion over future business models. The point was made that no one has a right to make money from their “art” – they have the right to have the “opportunity” to make money, but technology does disrupt traditional business models, and no industry is exempt – ie the media are just as disrupted by the Internet as the music industry.

I suggested the long term future is something along the lines of you pay $40 a month to your ISP for Internet access, and if you want it goes to $55 a month for Internet access and all the songs you can download legally, and say $65 a month to also subscribe to legal TV downloads and say $80 a month to also get movie downloads. And if ISPs are keeping a share of the license fee, they gain an incentive to crack down on those doing free copyright infringing downloads. A fair few people agreed this would be a desirable future.

I also advocated that rights holders and ISPs should try and get a voluntary agreement, regardless of any law, that allows right holders to have education notices to alleged infringers sent through ISPs. Even without sanctions involved, it is likely this would see a significant drop in infringing downloads. But right holders can’t expect ISPs to act as their mailmen for free s that is a key issue. Ant Healey from ARPA indicated they had been discussing just that with the TCF, which is good.

Without beating up on Healey (who made many constructive contributions), I was a wee bit disappointed that he did repeatedly go on about how the room was unbalanced with so many”Internet people” there and so few artists. This was the one issue that got people a bit worked up as many of the Internet people somewhat angrily proclaimed they were also artists.

S92A was discussed, but the focus was on wider issues around the law. Many people (including myself) advocated for a full first principles review of the law which would take account of today’s world where digital copying is instant and cost free, the fact the nature of infringing is now for personal use not economic gain, and most importantly to look at having a broad fair use doctrine that covers stuff such as parody, satire, fair quoting etc etc. Copyright is not just about music. Healey made the point that you have international treaty obligations so a first principles review may be pointless as you can’t avoid those. Personally I don’t think the two are incompatible.

Overall it was a good initiative by Labour. The MPs engaged well, and were not defensive about their role in originally supporting s92A. In fact a couple of former Ministers said they had been going back through old Cabinet papers to find out why they supported it at the time. The MPs participated but mainly were there t listen and consider possible ways forward for their positioning based on contributions.

No magic solution engaged, but I think most people found it quite worthwhile, and you know the Government would gain some kudos if it did the same and had an open dialogue with relevant Ministers and stakeholders. I think it would help them in progressing a law change.

NZPA have just reported:

Labour MP Clare Curran has drafted a member’s bill overturning the section and will attempt to get Parliament to consider it.

Well done Clare. That is great news. Generally MPs need the permission of their Caucus to introduce a private members bill, so I read this as Labour reversing their previous support for S92A. It is a very welcome u-turn.

This now has S92A opposed by Labour, ACT, Greens,United Future and presumably Progressive.

The ball is firmly with the Government now.

Once again big ups to Labour for their change of position. I’m delighted.

Dunedin remains happily red. Labour beats National in the party vote by 16% in Dunedin North and 12% in Dunedin South. This is a lot better than 2005 though when the margins were 29% and 28% respectively.

Pete Hodgson had his 7,900 majority drop to 6,700, which won’t lose him sleep. David Benson-Pope had a 10,100 majority and new gal Clare Curran traded that for a still healthy 6,000.

In Clutha-Southland National gets 60% party vote to 30% for Labour. Bill English trades up his 11,500 majority for a 14,300 one.

Finally in Invercargill, National wins the party vote by 10%, after losing it by 1% in 2005. And Eric Roy’s 4,000 majority is turbo charged into a 6,100 one.

That’s the end of the series. All graphics taken from the NZ Herald. When final results come in, I’ll provide a lot more data.