Accepting some people won’t pay doesn’t mean they can’t make money. Instead, they need to come up with innovative answers to the question, “How do we give people what, when, and how they want our products at a zero price?”

The answers are there but it takes effort, attention, and good ideas. Let’s take an example from another industry, the software industry.

Zero cost software

How do you make money from software without charging anything for it? It’s not simple but several models exist. For example, there’s the upgrade or “freemium” model (charge for extra features or functionality); the services model (charge for allied services, e.g. design or support or tools); the donation or funded model (customer pays what they can or want to, before or after the software is developed); the loss-leader model (gain popularity to sell other software); the advertising model (money made from advertisers); etc.

How can this be applied? Just ask Justin Bieber how he got his break. Or, read this great article in The Guardian about Gorillaz as well as the one in GigaOM where author Neil Gaiman talks about how he is selling more books in countries where his books are pirated.

The traditional business model of Hollywood is based on the 1970s, not the 2010s. It will take time, but eventually they will change.

People and businesses who find “.co.nz” insufficiently patriotic may be able to register websites that end with “.kiwi” from next year.

A group of ex-pat New Zealanders based in Vancouver has teamed up with Wellington lawyer Peter Dengate Thrush – a former chairman of worldwide internet governance body Icann – to found a new company, Dot Kiwi, which hopes to cater for those who want a more “Kiwi flavour” to their online identity. …

Dot Kiwi, which is Canadian-owned, would compete with New Zealand’s non-profit internet society, InternetNZ, which oversees “.nz” addresses and is funded by a compulsory levy on registrations.

Dengate Thrush said the administration of the “.kiwi” registry would be outsourced to Minds and Machines, a company he chairs that is based in Santa Monica in the United States.

InternetNZ president Frank March said all new and existing top-level domains competed with “.nz” and the society had not ruled out lodging its own application to run “.kiwi”.

“We’d certainly have a good case to put up, but there are very heavy costs involved in establishing a top-level domain and it is not a process we would undertake lightly. The arguments are quite finely balanced,” he said.

The .nz Domain Name Commission did some research last year through Colmar Brunton and around 11% of respondents (off memory) said that they would register in .kiwi in preference to .nz or .com, if they had the choice – so I think there is market demand for .kiwi. Whether or not the demand is high enough to cover the costs of a registry is another issue.

As a disclosure I’m on the working group which is looking at the pros and cons of InternetNZ applying for .kiwi. The WG’s role is not to decide, but to prepare consultation papers for discussion with the InternetNZ Council and members. As Frank March is quoted as saying, there are heavy costs involved, and many other issues.

1. The Internet drives economic growth
2. A digitally inclusive society
3. A vibrant, multi-cultural identity
4. Protecting the environment for future generations
5. A Government that “gets” the Internet

Waldo Kuipers from Microsoft talks about some of these themes in a blog post. He makes an interesting point:

In a paper looking back on 125 years of refrigeration (PDF), Dr Andrew Cleland explains, “In 1882 the first refrigerated meat left New Zealand for London, the pioneering use of a technology that was to transform the New Zealand economy. Animals were no longer grown for wool only, and the wealth of the nation developed rapidly. From 1882 until as recently as the early 1990s refrigerated food has returned at least 30% of New Zealand’s export income. Whilst much of the equipment has been imported, expertise in the application of refrigeration was developed in New Zealand.”

For New Zealand, the internet could be the best thing since refrigeration.

Reps from five of our political parties also debated Internet issues last week. If you missed it, you can view or listen to it at this page.

InternetNZ presents the election debate NetVision 2011, focused on New Zealand’s Digital Future. Major political parties will present and debate their visions across economic, social, cultural, environmental and government perspectives.

NetVision 2011 will be held at Wellington’s City Gallery on Tuesday 18 October from 7-9pm.

The debate will be streamed live on the Internet at www.r2.co.nz/20111018

A panel of Political Party spokespeople are participating in NetVision 2011 including Hon Steven Joyce (National), Clare Curran (Labour), Gareth Hughes (Green) and Peter McCaffrey (ACT). Confirmation from the Māori Party is awaited.

Sean Plunket is to MC the event, and journalists including Rob O’Neill and Sarah Putt will be on hand to quiz the politicians. They will also put questions posted on Twitter using the hashtag #Net11 to the politicians.

If you would like to be in the audience for the debate then email rsvp@internetnz.net.nz .

I’m in Auckland so will not be there in person, but will try and watch it online and follow the chat on Twitter. I encourage all those interested to tune in also, and ask questions that you want answers to.

The programme is here. I’m gutted I will be missing it as I will be overseas.

Three Ministers are participating – Deputy PM Bill English, ICT Minister Steven Joyce and Attorney-General Chris Finlayson. Also MPs David Cunliffe, Clare Curran and Gareth Hughes are on panel discussions.

Lawrence Lessig is the key speaker on the third day, which is MC’d by Sean Plunket. The panels are on digitial citizenship, the Internet and the law, Open Government and Access & Diversity.

The first two days have four work-stream running through them, with a huge diversity of sessions and topics.

Justice Minister Simon Power has asked the Law Commission to review the adequacy of regulations around how the Internet interacts with the justice system.

“I’ve ordered this review because it’s imperative the law keeps pace with technology and that we have one set of rules for all news media,” Mr Power said.

I am a supporter of there being a review, and have in fact advocated for it. But I have to say the way the Minister has framed it is regrettable and rather confrontational.

First of all it may make a nice slogan, but the status quo doesn’t have one set of rules – broadcast media have very different rules to print media.

“At the moment we’ve got two tracks – conventional media and the so-called ‘new media’ – intersecting with the justice system, and it’s not sustainable.

“It’s a bit of a Wild West out there in cyberspace at the moment, because bloggers and online publishers are not subject to any form of regulation or professional or ethical standards.

This is another slogan which means little (and remember I do actually favour a review). First of all bloggers are subject to the law – as have been demonstrated of late. The notion of regulating bloggers (beyond the normal requirement to obey the law) or imposing some sort of “professional standards” on them is ridicolous fancy. Bloggers are simply citizens having a say. Simon Power makes it sound like he thinks you should have to apply for permission to have a voice online. Now that may not be Simon’s intent, but the way he has framed this issue is incredibly bad.

“Issues I’m concerned about include how trials can be prejudiced by information posted on websites and seen by jurors, real-time online streaming of court cases, breaches of court suppression orders, and re-publication of a libel.

Issues which I helped facilitate discussion of at last year’s R v the Internet seminar. They are good issues to discuss.

It will focus on whether either of the two existing industry watchdogs – the Broadcasting Standards Authority and the Press Council – could provide a suitable vehicle for regulating unregulated forms of new media.

Yeah, and lets also give them the power to fine MPs if they say nasty things on their Facebook pages.

Having said that, it is worth noting the Press Council is self-regulation, not external regulation. One could discuss options such as allowing bloggers to voluntarily sign up to the Press Council, if they wish to do so as a way to enhance their reputation. But you then have issues around who covers costs of the Council – considering most blogs are non-commercial.

Mr Power says the public will have the opportunity to have their say when the commission releases an issues paper by December next year.

That is December 2011? Good – this should not be rushed.

As I said I am pleased the Law Commission is doing this review, as there are potentially even benefits for bloggers in it. But the way the Minister’s press statement has framed the issues is not good, and likely to rub a lot of people up the wrong way.

I will be advocating to the Law Commission, and InternetNZ, that they look to convene some workshops next year to discuss and define some of the issues.

InternetNZ (Internet New Zealand Inc), through subsidiary company the Domain Name Commission Ltd, advises .nz domain name holders that they are able to apply for macron versions of their domain names in a ‘sunrise’ application period that runs until 6 July 2010.

The addition of macrons to the .nz domain name space means that names can be registered using the characters ā, ē, ī, ō and ū, enabling, for instance, Te Reo Māori words to be correctly represented online.

Domain Name Commissioner Debbie Monahan says “The sunrise period gives existing name holders the exclusive right to apply to register macron versions of their names”.

“Name holders should take full advantage of the sunrise period before general registrations allowing the use of macrons start during Māori Language Week on 26 July 2010.”

At present Ngai Tahu is at http://www.ngaitahu.iwi.nz/.

Now that macrons are technically able to be used in the .nz domain, they could have their URL as http://www.ngāitahu.iwi.nz/

This is part of a global move towards allowing domain names that have non-Latin characters. The technology to do so is quite simple. The challenge has been working out the policies.

As I have previously blogged, the position of the NZ Govt on ACTA has generally been a good one – but we only know this because the secret draft texts have been leaked in Europe.

This is an opportunity to learn more about ACTA and help critique the proposals around Internet access.

The programme is here. We have three top international experts speaking, plus a panel of local pundits. The three international speakers are:

• Professor Michael Geist, law professor at the University of Ottawa where he holds the Canada Research Chair in Internet and E-commerce Law. Michael has a Doctorate in Law (J.S.D.) from Columbia Law School and is an internationally syndicated columnist on technology law issues.
• Kim Weatherall is a Senior Lecturer in the School of Law and an Adjunct Research Fellow with the Australian Centre for Intellectual Property in Agriculture. Kim teaches and researches in intellectual property law, with a particular interest in digital copyright, the relationship between international trade and intellectual property, and the systems for administration and enforcement of intellectual property rights.
• Jonathon Penney is the Internet NZ Senior Research Fellow in CyberLaw at Victoria University and has a MSt from Oxford and a LLM from Columbia. Hailing from Canada, he has previously worked as a lawyer with the Justice Department and as a policy advisor at the federal level

If you wish to attend, you can register here. Looks to be 100 or so people attending at this stage. There is no charge to attend thanks to InternetNZ,

The venue is the Coromandel Room, Level 1, Rendezvous Hotel, corner Vincent St and Mayoral Drive in Auckland’s CBD.

It commences at 2.00pm and will be finished by 4.00pm.

Speakers include

• Officials from the Ministry of Foreign Affairs and Trade
• Jonathon Penney – the 2010 Cyberlaw Fellow at Victoria University of
  Wellington
• Colin Jackson – a Wellington consultant and blogger at IT.gen.nz
• Rick Shera – Lawyer, Lowndes Jordan
• Jordan Carter – Policy Director, InternetNZ

If you click on my ACTA tag you’ll find more info about ACTA and why it is important to be vigilant about it.

There are two major issues around ACTA. The first is that the negotiations are secret, and this has even upset the EU Parliament:

Wary of the lack of openness surrounding the Anti-Counterfeiting Trade Agreement (ACTA), virtually representatives of the EU parliament have banded together, voting 663 to 13 in favour of passing a resolution that would require the EU Commission (who are the EU’s representative in ACTA negotiations), to share all information about ACTA talks, and to refuse to support any Internet disconnection penalty for online copyright infringement.

The resolution is very specific and blunt about the EU Parliament’s displeasure with the lack of transparency around EU ACTA negotiations, citing concerns over the “lack of a transparent process in the conduct of the ACTA negotiations”.

The second is the concern that ACTA may force countries that ratify it, to legislate for Internet disconnection for people accussed or found to have infringed copyright.

Now, all trade agreements are negotiated privately, but whether an agreement on copyright law should be seen as a trade agreement is a big issue – most IP agreements are not. Many countries would like to be more open about ACTA, but the rules of trade negotiations are that you need unanimous permission to agree to anything – including releasing information. So just one country, such as the US, can block the release of the draft text.

I’ve attended two meetings (in my role with InternetNZ) with officials from MFAT and MED, and have to say I am impressed with their willingness to engage, within the limits of what they can say. They have consistently said their position has been that ACTA should not require NZ to do anything beyond its current law (including the replacement S92A). However they can not tell us what has been proposed by other countries, and the concern is what pressure there may be to get an agreement in the final stages.

What the Government has done is asked for public submissions on “enforcement of intellectual property rights in the digital environment”. If you have concerns about ACTA, you should take a few minutes to make a submission and state what is and is not acceptable to you. Topics include:

• Liability of ISPs for third party infringement
• Safe Harbour provisions for ISPs and associated conditions
• Identifying Infringing Users
• TPMs (Technological Protection Measures)

Now despite the ACTA negotiations being secret, a draft text has been leaked. And, assuming it is accurate, it shows the New Zealand negotiators in a pretty favourable light – opposing some of the more undesirable aspects.

Nathan Torkington covers this in a blog post. His summary:

On the balance this bit isn’t too bad–New Zealand is a good voice for sanity in the negotiations.

I was pleased to see from the leaked draft, that the official position of the NZ negotiators, was very much in line with the informal indications they had given. It is ironic that we can only verify this, because someone leaked a draft.

Now as I said the next round of ACTA, and the round most likely to be discussing the Internet section, is in Wellington from 12 to 16 April. I am hoping the organisers will allow an opportunity for some sort of public forum or dialogue with negotiators, and this request has been made.

InternetNZ has organised a PublicACTA conference on Saturday 10 April, which will allow interested people to debate the issues, form positions, and report them to the main ACTA negotiations the following week.

And in a further announcement, the keynote speaker will be Professor Michael Geist, the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa in Ontario. Michael is a real expert in this area, and a great advocate for balance in copyright laws.

I would recommend people attend, just for the chance to hear Michael. And if you wish to stay up to date with what is happening, I recommend this ACTA coalition site.

As I blogged at the time, the Government’s Cabinet paper on the new law wasn’t bad, and a big improvement on the existing S92A. There are still provisions I don’t agree with, but the worst aspects were gone.

The draft bill is actually, in my opinion, a slight improvement on the Cabinet paper. The Cabinet paper had a number of potential fish-hooks in it – such as the possibility one could get multiple infringement notices, for alleged infringing that occurred at the same time. InternetNZ detailed to the Minister a number of these fish-hooks, and it is pleasing to see that officials (and presumably the Minister) took account of these in drafting the bill.

Pat Pilcher in the Herald comments:

Under the new bill, offenders will receive three warnings. First a detection notice, which is then followed by a warning notice should the internet subscriber be accused of infringing copyright again.

An enforcement notice is finally issued that could see third time infringers being fined up to $15,000 or have their internet disconnected for up to six months.

Giving credit where credit is due, the Bill does incorporate time frames within which subsequent infringement notices cannot be sent, giving accused infringers time to amend their copyright infringing ways.

As I said previously, this is a quite important thing. Generally there is a gap of three weeks  from the first “strike” until any alleged infringing can count for a second strike and so on.

The new bill also allows accused for copyright infringers who feel they have been unjustly accused to apply to have their case heard by a Copyright Tribunal at no cost.

This is definitely a good thing as the scope for wrongful accusations is potentially massive. Take, for example, the number kiwi broadband users using of Wi-Fi broadband routers.

Yes, that is good that you do not have to pay to defend yourself. Also your identity is protected, unless you are found liable.

ISPs are also going to be burdened with the costs under the new bill. Matching internet subscribers to IP addresses supplied by copyright owners, and keeping track of the three strike process is, at best, going to be a deeply complicated undertaking and likely a costly nightmare as well.

While some of these costs will be met by copyright holders paying to lodge infringement notices, most ISPs will be left with little choice but to pass costs onto their subscribers.

The level of fee which ISPs can charge is likely to be set by regulaton. It is a concern that the fee will probably only cover their variable costs of each notice, and not the very large one off capital costs of reconfiguring their systems to record such info.

While copyright owners can ask for repeat infringers to be disconnected, they must do so through the courts and disconnections will last for up to six months.

This is good in that courts are geared up to hear both sides of any infringement argument and will bring some much needed legal rigour where it was lacking in the previous bill.

I don’t think termination is an appropriate penalty, plus it will largely be ineffective. But having said that, I welcome the fact it can only be done by a court after due process.

Whilst the Copyright (Infringing File Sharing) Amendment Bill represents a step in the right direction (especially when compared to the original bill), it still incorporates some serious flaws.

Worse still, it could prove ineffectual as most serious infringers are will utilise encrypted virtual private networks to avoid detection by copyright holders.

I think there will be a fairly big drop in copyright infringing downloads (and that is not a bad thing), resulting mainly from people receiving an alleged infringement notice. Overseas cases have indicated over 50% of people stop downloading such material if they receive such a notification.

Those that carry on regardless tend to be very dedicated, and will probably just move to networks which hide their IP addresses.

I hope all parties in the House will support the bill at first reading, as it is a big improvement on the status quo. Once it hits select committee, I will encourage people to make submissions to improve the bill further.

Also the Twitter feed is extensive. Over 250 tweets. Is one of the best Twitter coverages I have seen as we had nine or ten people et the seminar twittering and several people not there also commenting and asking questions.

The morning session was mainly focused on contempt of court, and the afternoon on name suppression issues.

Warren Young, the Deputy President of the Law Commission, gave an overview of the recommendations from their recent report on suppressing names and evidence. He said the threshold for getting name suppression shoudl be “extreme hardship” not just hardship as at present.

Most usefully he clarified that the recommendation relating to ISPs removing or blocking suppressed material is not meant to imply an obligation on ISPs to block overseas hosted material, just to remove material hosted on their own networks.

I asked a question about whom an ISP should be obliged to act on a complaint from – my preference is it should only be if the Crown Law Office or Police inform an ISP of suppressed material.

Judge Harvey spoke about the challenges of the Internet and supressed material, but did not think the horse had bolted. He made the case that one doesn’t have to achieve perfect suppression – it is often mainly aimed at making it hard for jurors to access material not relevant to the trial.

The final panel was myself, Sinead Boucher (Group Online Editor for Fairfax) and Ursula Cheer from Cant Uni Law School. Sinead and I talked about the issues we face from a practical point of view in trying to complay with the law, and Ursula touched on how different technologies come in and out of vogue with different challenges.

Now I can’t avoid mentioning a huge fuckup I did. It was one of the rare times I was speechless as I realised what I had done. I had a few slides to go with my talk, and I was talking about the recent high profile entertainer case, and was detailing the different sites you could find out on.

The point I was making was it was not just blogs, but the name was on Yahoo Answers, MSN NZ, was findable through Google search and even on the entertainer’s facebook page. I found it amusing that the entertainer himself could be liable for breaking his own name suppression.

I displayed the above page to show the comment someone had made on the page. I pointed out to the room packed full of lawyers from the Courts, Ministry of Justice, Crown Law, Law Commission etc (plus the Judge who originally dealt with the case) how careful I had been to draw green boxes over seven parts of the page to stop my showing the page, itself being a breach of the suppression order.

I went on to say how I then realised the URL gave the name away also, so had to go back and green that out also, and then also realised two of my open tabs displayed the name, and edited the graphic for a third time to green them out.

Just as I was about to move on, someone in the audience then pointed out that sadly I had overlooked the Google search box in the Google toolbar, and to my horror there indeed was the name of the entertainer (now behind a yellow-brown box). I was mortified as the audience started pissing themselves with laughter.

I mean how much worse can it be – you are boasting about how careful you have been to not break the name suppression order, and bang the name is up on the screen in front of everyone – and especially in front of that audience.

In the general discussion at the end, there was some discussion around the role of the media committee of the Courts. The TVNZ lawyer said the committee had one rep from print media and one from broadcast media, and many in the room thought an additional rep from Internet media could be a useful thing. Of course that is a decision for the judiciary, but it was agreed InternetNZ would write to the Chair to discuss the concept.

Feedback from participants was incredibly positive, especially from many of the lawyers. A common comment was how useful it was not just having lawyers there discussing things academically, but also having media and Internet practitioners with practical knowledge. There was a strong feeling that there should be more opportunities to get the various industries together on issues of mutual interest.

Kudos to InternetNZ President Frank March who MC’d the day well to finish ahead of time, and to the InternetNZ staff who primarily organised it. And most of all to the participants – had many great contributions not just from the speakers, but from the floor.

• starting point for considering publication of evidence and names should be a presumption of open justice
• suppression should only be used in exceptional cases where there were compelling reasons
• grounds on which suppression may be granted need to be clarified and tightened
• development of a national register of suppression orders should be advanced as a matter of high priority.

These all seem good and sensible moves to me. The use of suppression orders has been growing, and they should be the exception, not the rule. Having tighter criteria is a good step in the right direction.

I am especially pleased to see the recommendation for a register of suppression orders. It is very difficult to sometimes know what has or has not been suppressed. And this is a complaint not just from me, but from many in the media.

With regards to the Internet, they recommend:

Where an Internet service provider or content host becomes aware that they are carrying or hosting information that they know is in breach of a suppression order, it should be an offence for them to fail to remove the information or to fail to block access to it as soon as reasonably practicable.

The wording here is somewhat vague.  Under the best case scenario this is not greatly different from the status quo. ISPs already have an implicit obligation to remove material if it is in breach of a suppression order.

But what has not been defined is is what they mean by carrying information, and what they mean by “become aware”. It is one thing to require an ISP to remove material hosted by that ISP. It is quite another to require them to try and block information from other sources.  That would be highly undesirable, plus it won’t work. ISPs should be responsible (once notified) of material on their own networks, but not be ordered to block overseas sites such as Wikileaks etc.

What constitutes bringing the information to the attention of an ISP will need clarification also. I have no problem with an ISP having to remove material upon official request by the Solicitor-General and Crown Law. But just having a member of the public allege hosted material breaches a suppression order should not be enough. The ISP is not competent to decide what is or is not a breach of a suppression order – hence it should be an official agency that has to make the request.

So overall the main recommendations look to be a move in the right direction. The recommendation relating to the Internet is too vague to be able to say for sure at this stage.

In a fit of good timing, there is a seminar on the 3rd of December where some of these issues can be discussed and debated.  The seminar, titled R v The Internet, is hosted by InternetNZ, the Law Commission and the Ministry of Justice.

The seminar is at Te Papa, and has an impressive line up of speakers, including:

Hon Christopher Finlayson, Attorney-General
David Collins QC, Solicitor- General
Tony Smith, Dean, VUW Law School
Steven Price, Barrister & author of Media Minefield
Robert Lithgow QC
Brent Edwards, Media Committee, EPMU
Warren Young, Deputy President, Law Commission
Judge David Harvey
Sinead Bouchier, Group Online Editor, Fairfax
Ursula Cheer, Associate Professor of Law, University of Canterbury

I’m also taking part in one of the panels. I think it will be a fascinating day. It is intended for legal, media, and Internet professionals, and anyone can register to attend for $100 + GST. You can also apply for a discounted rate.

Communications and Information Technology Minister Hon Steven Joyce today released the details of the government’s $1.5 billion ultra-fast broadband investment initiative. …

Key highlights of the proposal include:

• An open, transparent partner selection process, which will be initiated in the next month.




• Government investment directed to an open access, wholesale-only, passive fibre network infrastructure.




• A new Crown-owned investment company (“Crown Fibre Holdings”), which will be operational by October, to carry out the government’s partner selection process and manage the government’s investment in fibre networks.




• Crown Fibre Holdings and each partner establishing a commercial vehicle, a “Local Fibre Company” (LFC), to deploy fibre network infrastructure and provide access to dark fibre products and, optionally, certain active wholesale Layer 2 services.




• Provision for national and regionally-focused proposals, as well as consortium and proposals aggregating any combination of LFC regions.




• Independence, equivalence and transparency requirements for LFCs.




• Expansion to 33 candidate coverage areas based on the largest urban areas (by population in 2021).

What is really good is the commitment to open access to dark fibre, and the regional approach to the issue. The Government has held firm to most of their draft proposal, with the main change being an increase in the number of coverage areas to 33.

Computerworld reports on positive reaction:

“This ushers in the biggest and most fundamental change to telecommunications in New Zealand since the privatisation of Telecom 20 years ago,” TUANZ CEO Ernie Newman said in reaction to the news.

“The paper builds very constructively on the work done previously,” Newman says. “It takes into account most of the key issues raised in submissions, and sets a timetable with milestones. It is an excellent blueprint on which to build.” …

InternetNZ also welcomed the plan, saying it is “delighted” with today’s announcement of a regionally-based approach to investment.

“This is a world-leading programme that can be expected to deliver the infrastructure New Zealand needs,” spokesperson Jordan Carter says.

“Steven Joyce and the Government have put in place a framework that over time can deliver a widespread fibre rollout across urban New Zealand.”

Those unsure about the benefits of ultra-fast broadband, might want to read the guest post from Rod Drury earlier this week.

Chris Keall (and Kelly Gregor) at NBR cover the proposal in detail. Keall highlights a new focus:

In the proposal document released today, the minister also flags that “The capacity and reliability of New Zealand’s international data connectivity will become increasingly important as LFCs’ [local fibre companies'] networks are deployed over the course of the UFB Initiative.”

The Commerce Commission recently identified slow international data as a roadblock to better domestic broadband performance, with testings showing that overseas pages take twice as long to load as those hosted locally – even with our current copper-dominated networks.

International bandwidth and data costs are often cited as a big issue also.

In a fit of good timing, Juha Saarinen has an article in Computeworld on dark fibre, and how you basically can not get it from Telecom or TelstraClear. Have a look at this price comparison and weep:

James Watts, who runs Palmerston North-based ISP Inspire Net, says the reason dark fibre is attractive to his customers is because they can “do whatever the hell they want with it.” Inspire currently charges $595 and $995 for intra-town dark fibre pair leases, depending on contract terms, and double that for inter-town unlit circuits.

To light the circuits, Watts says his company sells Gigabit Ethernet transceivers for $140 each.

A similar 1Gbit/s circuit from Telecom apparently costs $7000 a month, plus installation charges.It’s $69k a year according to Telecom’s pricing book.

Finally a focus on the issue of fibre providers being discouraged from also operating retail telecommunication services, both here and in Australia. Steven Joyce said in a Q&A:

Will Telecom have to structurally separate its network business to participate?

Any such decisions are up to Telecom.  The Government has made it clear that it will only invest money into fibre companies that are not controlled by shareholders who also operate retail telecommunication businesses.  The Government is also clear that potential partners who already own fibre assets can table options that involve those fibre assets being vended into any new fibre companies.

Preventing vertically integrated monopolies is crucial. This basically means Telecom can not be a majority shareholder in any regional fibre company unless they structurally separate (ie sell off Chorus). They can have a minority stake however.

In Australia, the Government has done similiar:

The government could also deny Telstra access to new spectrum for advanced wireless broadband unless the telco sells off its cable network and 50 per cent stake in Foxtel (25 per cent owned by News Corporation, owner of The Australian)

If you want to be part of the future, you need to be separated.

For those who think separation is not a big issue, think what it would be like if Air New Zealand owned the airports and could set access terms for other airlines. Or if Ford owned the roads and set the rules for what other cars could drive on them, and for how much.

So as I said, very pleased with the announcements today, and now working my way through the details.

Internet service providers will soon begin blocking access to hundreds of websites that are on a secret blacklist compiled by the Department of Internal Affairs, but critics say the system lacks transparency.

Some ISPs – those that choose to use the service.

There are two sorts of views about the desirability of a voluntary filtering scheme to block child pron sites. Both have some validity.

One view is that any sort of filtering sets a bad precedent. That if you accept a filter for child porn sites, then someone may propose a filter for copyright infringing sites, or sites that advocate crime, or sites that are defamatory of someone. The concern is that this is the thin end of the wedge. The argument is you don’t block sites to stop people breaking the law, you prosecute them afterwards for doing so.

The other view is that if ISPs do not act to voluntarily block access to child porn sites, then it will give ammunition to those who want compulsory filtering such as in Australia, and that such compulsory filters may be far wider than just child pornography. It is better for most ISPs to have input into a voluntary filtering scheme, than have a compulsory one implemented on them.

The department this week announced its new Digital Child Exploitation Filtering System, which it said would help fight child sex abuse. The $150,000 software will be provided free of charge to ISPs in a couple of months and will reroute all site requests to Government-owned servers. The software, called Whitebox, compares users’ site requests with a list of banned links. If a match is found, the request is denied. It will not cover email, file sharing or borderline material.

The best info on the proposed scheme comes from Thomas Beagle who has an FAQ on it.

Critics say the system has been introduced by stealth and lacks accountability. The department will not disclose the 7000 objectionable websites for fear “inevitably some people would visit them in the interim”, effectively facilitating further offending and making the department party to the further exploitation of children.

Through my work with InternetNZ, I got briefed on the proposed scheme some months ago.To be honest I did not realise until recently that info on the proposed scheme wasn’t in the public domain. As DIA had been talking to various ISPs, I just assumed it wasn’t a big secret. I actually suggested the DIA be invited to make a presentation to the InternetNZ AGM, which is a public forum, and they seemed relaxed at that. I suspect it has been “secret” more by neglect rather than design.

InternetNZ has had a healthy constructive relationship with DIA for some years. Around four years ago we supplied a technical expert to test the UK filtering scheme, and to check for stuff like false positives – ie does the filter block sites that are not hosting child pornography.

In terms of listing the websites that will be blocked, I have some sympathy for the notion that this is undesirable as it is like publishing a guide to find all the child porn sites. But I also understand that many people could be nervous with a regime of “Just trust the DIA”. A suggestion I made was that maybe one could have the Office of the Auditor-General empowered to audit the filter list every six months or so, to certify it has not been expanded beyond its mandate. Mind you I feel sorry for the poor staffer who would have to check some of the sites out to do such verificiation.

Internal Affairs censorship compliance head Steve O’Brien said the blacklist would be personally reviewed by staff each month and would be restricted to paedophilic content only.

This was a key area I quizzed the DIA staffer on. I am very much oppossed to filters that work on keywords, assumptions etc as these inevitable have false positives – they block sites they should not. A manually reviewed list is the only way to go.

Also essential (to me) is that the filter will be directed towards child porn sites only, and not all sites with “objectionable” content. While most prosecutions in NZ for “objectionable” content relate to child porn, the definition of objectionable is wider. It includes (for example) sex involving urine or faeces. It is somewhat strange that it is not actually illegal to perform or receive a golden shower, but it is illegal to view an imagine of a golden shower!

Now just so no one gets the wrong idea, I find the idea of sex involving wees or poos as bloody disgusting, and am not a champion for such practises. Yuck. But they are not like child porn, in that child porn has actual real victims – the abused kids. So to my mind it is important a filer targets child porn only, and not the wider definition of all objectionable or illegal material. DIA agree, which is good. I imagine the fear of some people is that the definition could be widened in future. For my part I don’t detect any desire on behalf of DIA to grow it in future. They have a pretty nasty job to do, and generally do it pretty well. That is not to say I agree with everything they do.

Filtering systems in Australia, Denmark and Britain have been accused of serious flaws, with unexplained blacklistings of straight and gay pornography, Wikipedia articles and small businesses.

Yep errors do get made. However there is a system to get a decision reviewed if you get told a site is blocked, and you think it should not be.

Mr Beagle said he favoured providing optional clean feeds for users, but believed Governments would be tempted to expand the blacklist in reaction to events.

I am against any filter being compulsory for ISPs. And I agree user level decisions are best. But personally I am pretty relaxed about individual ISPs making a decision about whether or not they would use the DIA filter – so long as they do so transparently and inform customers they have done so. Some ISPs may even use it as a marketing tool that they provide a slightly “safer” environment, while other ISPs may choose not to take part, and use the fact they are unfiltered as a marketing tool.

What would I do if my ISP, choose to use the DIA filter? So long as it was restricted to child porn sites only, and so long as there was some sort of external review (such as the Office of the Auditor-General), I would stay with that ISP.

Some ISPs could even choose to provide it as an option for customers to select as a preference, but I understand that require a bit more than just a line of code.

We do know fibre-optic cable is at the centre of Joyce’s rewiring plan and the mechanism to get there is the much-vaunted public-private partnership.

So far so good. But just who does Joyce plan to partner with? And will he be seduced by Telecom’s wiles?

There’s no doubt Telecom would love to bed Joyce. Such a tryst – Telecom building, operating and no doubt, wanting to own, the new wires – would secure the firm’s monopoly dynasty forever.

I think Mr Barton needs to take less Viagra before he writes his column

But it’s also clear such a dalliance would be a terrible mistake. Not to mention a betrayal of voter trust and a very poor return on taxpayers’ money.

And getting the maximum return on the Government’s investment is crucial.

If Joyce is still uncertain about what to do, he should re-read the very fine piece of analysis prepared for Internet New Zealand by Network Strategies. There, in glorious return on investment detail, is a simple answer to who the Government should partner with instead of Telecom – electricity lines companies.

Why? Because if New Zealand wants to rewire its aged telecommunications to a fibre-optic future, the electricity lines companies are the cheapest, most efficient way to do it.
Plenty of power poles and ducting are already going by our homes, already with resource consent, making it much easier to string or trench fibre to our doorsteps. How much cheaper? Without the lines companies, Network Strategies estimates a fibre network will cost $5 billion.

With the lines companies on board, the cost drops to $3 billion – making the Government’s $1.5 billion investment look like a very realistic sum to fulfil its election promise.

A $2 billion difference is far from insignificant. I am of course on the Board of Internet New Zealand, but we were as surprised as anyone I think that the research turned up such a massive price difference.

There are other reasons why this is very good idea. Most of the 27 lines companies in New Zealand are owned by consumer trusts – an ownership structure that tends to be sympathetic to longer payback periods and fits well with local initiatives that recognise the importance of broadband to a region’s economic and social wellbeing. And some, such as Vector and Counties Power, are already providing fibre to homes or businesses.

And even more importantly, lines companies do not tend to be in the business of providing services over their lines – they are an access provide rather than a service provider. This is actually crucial as you then avoid a vertically integrated monopoly, and then multiple service providers can comptere and offer different packages over the fibre.

But there are two problems. The first is what such a network would do to Telecom’s share price. There’s no doubt it would have an unsettling effect. But if the new wires are “open access”, it’s hard to see how Telecom can complain too much.

Open access means companies get equal access to the infrastructure on non-discriminatory terms and conditions, so all comers are offered the same wholesale products or services at the same price and equivalent conditions. In other words, consumers get choice and Telecom competes for business with everyone else, probably getting a whole lot more efficient in the process.

The impact on Telecom is a real issue – not just in terms of share price, but also their fibre to the cabinet plans. Would they continue? Would they sell Chorus if the line companies get the nod to build the fibre to the home network? Could there be a win-win – maybe some partnership with lines companies and Telecom/Chorus? So many issues, which is why a decision should not be rushed.

Radio NZ did a piece this morning:

The Australian government plans to force Australian ISPs to filter out more than a thousand websites with content including child pornography, excessive violence, crime and drug information as well as promoting terrorism.

The policy, dubbed the ‘Great Aussie Firewall’, has been met with a storm of criticism across the Tasman.

Internet New Zealand board member David Farrar says much of the banned content is traded over peer-to-peer networks which won’t be caught by filters.

He says the filters will also cause a sharp fall in download speeds for Australian users.

Internet Service Providers Association of New Zealand president Jamie Baddeley said the policy is insane and unworkable.

But he says it is symptomatic of pressure coming on ISPs to do more to police the internet.

One can also listen to the full item, at the bottom of the linked page. Jordan Cater is also interviewed.

I’ve also just been interview by TV3 for their 6 pm news tonight on the same issue.

I commented that luckily in NZ we have far smarter MPs, and I doubt more than a handful here would back some sort of compulsory government filter.

Also put in a plug for Netsafe, who provide really great resources for those worried about Internet safety.

The report is 150 pages of detailed models and costings. It was done by Network Strategies, who are an independent leading firm of telecommunication economists.

There are lots of technical details on whether one should build just layer zero or layer one infrastructure, whether it should be GPON or Ethernet or even peer to peer. The techos will find that part interesting.

But the real “big news” in the report is that it may be billions of dollars cheaper to build a fibre network through existing utility (electricity lines) companies, than through expanding current telco networks.

The major cost of fibre deployment is the cost of placing it. And lines companies already have networks of ducts plus overhead cables, and very importantly resource consents. If 50% of fibre deployment can be done using existing utility infrastructure (and some estimate as much as 70% could be done this way), then the total cost is projected to reduce from $5 billion to $3 billion and the cost to the Government from almost $4 billion to under $2 billion.

Now this is only one report, but hopefully a useful contributor to the debate over how to best achieve the Government’s goal of ultra high-speed broadband to 75% of NZ. But one reason I am quite enthusiatic about the path it suggests, is because it makes vertically integrated monopolies far less likely. You see none of the electricity lines companies offer telco services (such as Internet access, TV, phone). They would operate any fibre network on open access principles to all telco providers at a standard wholesale cost (estimated to be around $40/month). In one sense very similar to how Citylink have operated – they just provide the fibre, and let ISPs offer the services over it.

This actually has the potential to reverse much of the regulation in the telco sector. If there is infrastructure competition or separation, then you probably don’t need Telecom (for example) to be giving competitors access to its networks. Regulation is what I call a necessary evil. If one can get the infrastructure setup in a way so there is less regulation, that is a good thing.

There are literally dozens of big questions facing the industry and the Government, in working out a way foward. This report does not seek to answer them – it is a first step. Issues such as national vs regional, ownership, existing investment plans, the role of Chorus, RMA issues, funding, are all very significant ones.

It is going to be a very exciting time over the next few months, as the Government’s plans get finalised. Some people are sceptics, but I think there will be significant economic and environmental benefits to NZ if we get a fibre network in place ahead of most other countries.

The good news is the Government seems to be listening. IT Brief reports:

The government has bowed to unprecedented ICT industry pressure, announcing a four-month moratorium on Section 92A of its new Copyright (New Technologies) Amendment Act.

Communications minister David Cunliffe revealed the back-down during the InternetNZ TVNZ7 Internet Debate held on Tuesday night, saying the delay would give the industry and content providers time to come up with an alternative approach to controlling copyright on the internet.

The debate incidentially went really well I thought. Possibly could have been a bit shorter, but we had a good mixture of politics and policy. There was some generally good natured sparring that kept it interesting, but also some useful and interesting policy discussions around broadband, copyright, filtering etc.

From a technical point of view it was pretty seamless as we took questions from journalists, from the studio audience, from the online chat channel and also video questions through Skype. The InternetNZ staff and TVNZ staff and contractors did very well making it happen. Several people said they would like to see more debates with that interactive format.

Damien, Russell and Fran were all good at challenging the MPs, quite aggressively at times.

The funninest part for me was Maurice WIlliamson saying he had no idea why he voted for the new copyright law, as it is such a stupid law. I thought Maurice did very well, but in fact all four MPs did well with strengths in different areas.

You can view the video of the whole thing at debate.net.nz.

Anyway back to copyright. The Dominion Post also reports:

Paul Moreno, a spokesman for Justice Minister Judith Tizard, said a delay to regulations required to put the cut-off clause into force was being considered, and that the delay might be “endless”.

“Judith is of the mind that Internet access is almost a human right now, similar to water and electricity.”

But Ms Tizard then appeared to toughen her stance, stressing that the Government was concerned to protect copyright holders.

And it is important to protect copyright holders. But look at the gap between the possible interpretations:

Ms Tizard would not say whether the intention was that the cut-off threat should apply only to people who had been repeatedly convicted of copyright offences, or to those who had been accused of infringements by bodies such as the Recording Industry Association – indicating it had been left deliberately unclear.

“The intention of this provision is to provide a framework for the ISP industry and rights holders to develop an efficient and effective mechanism that is workable for both parties.”

Telecommunications Carriers Forum chief executive Ralph Chivers said if the former definition was used, that might be one solution.

But Recording Industry Association chief executive Campbell Smith said that would not be acceptable as it would require copyright holders to sue infringers to prove their guilt. “That is just impractical and ridiculous. I don’t think that is what was intended.”

Instead, ISPs should cut off customers who infringed copyright after notifications from rights holders, he said.

Losing your Internet access on the basis of unproven accusations is not a goer for me.

It is a fully interactive debate and you can ask questions online, vote for the party (via website or text) with the best policies and have fun discussing it in a chat channel.

The MPs taking part are David Cunliffe, Maurice Williamson, Rodney Hide and Metira Turei.

The two journalists on the panel are Fran O’Sullivan and Russell Brown. The moderator was to be Sean Plunket but he has been replaced by Damien Christie.

The Herald reports on why Sean will not be doing the debate. Despite it being as small and un threatening as you can get, the Radio NZ Chief Executive refused permission for Sean to do it. This has led to Sean announcing he is planning to leave Radio NZ and is looking for a new job after 11 years there.

Damien will do a very good job, but I am annoyed Radio NZ has refused to let Sean do the debate – are they not meant to support public good broadcasting? I suggested Sean as the moderator, and never had any idea that it could lead to problems with Rado NZ.  Some questions should be asked about whether Radio NZ are being too precious here.