Kiwiblog

An excellent op ed by Steven Joyce in the Herald today:

Most of us agree that for New Zealand to be successful longer term, we need more and higher-paying jobs. Jobs provide the incomes that people use to help their families get ahead. Jobs give people the income to pay taxes for the health and education services we value, and well-paying jobs are what keep more of our people making their lives in this country – and that keeps families together.

So we largely agree on the what and the why, but often the consensus unravels a bit when we get to the how. This is a little surprising because in fact the how is not that hard.

Jobs of the long-term, sustainable kind depend on businesses that provide something that people value. That is, something unique, or something of quality at a lower price than their competitors.

There is no other effective way to create long-term sustainable jobs.

And in turn those businesses depend on six key things:

1. ideas and innovation to create the business (entrepreneurs and ideas people)
2. money to build the business (capital)
3. access to raw materials (resources)
4. skilled people to work in the business
5. the public infrastructure which the business depends on (power, broadband, transport) and, 
6. most importantly, customers who want to buy the product.

So if we want more jobs, then we need to look at how to provide more capital, have better access to resources, a more skilled workforce, and good public infrastructure.

We need an environment that is encouraging to entrepreneurs and ideas people. We need to ensure we make resources available for businesses to use. We need stronger and more internationally integrated capital markets that provide money for investment. We need to ensure our people have the right skills. And we need to remember that we have a small domestic market, so our businesses will need to access world markets a lot earlier than similar businesses in countries located in larger world populations.

That doesn’t mean handouts. It just means removing more of the roadblocks that stop people from doing things.

And that’s when the problems start to arrive. The people who say “we want jobs” but then in the next breath say “but you can’t do that … you can’t build that there … you can’t expand that … you can’t explore for that there … you can’t live here … you can’t invest in property here – you just can’t do that!”

And very quickly we start limiting our options. Through the 2000s, as a country, we progressively boxed ourselves in more and more to depend on fewer and fewer industries based on what the “can’ts” said. At the end of it the government of the day was pretty much down to talking only about two of the ingredients – skills training and subsidising entrepreneurs that don’t use resources (the so-called clean-tech sector) – as the bits the “can’ts” were most comfortable with. The rest was off the table.

That attitude made it much harder to pay our way in the world and, as a result, we went into recession before the rest of the world in early 2008.

I am hoping National in their second term will stand up to the “You can’t brigade” and give us more meaningful RMA reform amongst other things.

We live in a world increasingly without borders – at least not as our grandparents knew them. People these days can base their skills, their capital and their ideas just about anywhere. They don’t have to be in New Zealand.

So when we think about the “you can’ts” we need to think about the mobility of people and money. Each time we say “you can’t” carries a cost. That doesn’t mean we should always say “yes”, but we do need to carefully weigh up the consequences of saying no.

And we should learn to stop listening to people who in the one breath chant “more jobs, more jobs” and then in the next breath say “but don’t do that, or that, or that”.

Hear hear.

Great to see a Minister sticking up for foreign investment. The Herald reports:

Not enough New Zealanders appreciate the benefits of foreign investment and economic growth, says Economic Development Minister Steven Joyce.

The reaction of too many people was “you can’t do this, you can’t do that, you can’t do the other thing”, he said, with little thought to the impact it had on potential jobs.

“The same people tend to turn around and demand more jobs one minute and then declare that they don’t want to see any things over here happen.”

Exactly.

Mr Joyce said that if people wanted more job growth, they had to take a more positive attitude to investment in the New Zealand environment, especially given the mobility of people and the mobility of capital. …

Economic growth required the use of capital, resources, skilled labour, infrastructure, innovation and a market.

“So all those things have to be managed. It’s not a case of carte blanche but every time you say ‘I don’t want that’ that shuts off another opportunity.”

Too many people see foreign investment as bad, or at best a necessary evil.

At Stuff I blog on the train blame game.

Danyl blogs:

Senior government Minister and key National Party campaign strategist Steven Joyce will be spotted to the Labour Party for the election campaign, Prime Minister John Key announced today.

The surprise announcement comes after weeks of dire polling for the Labour Party, compounded by a series of public relations fiascos. Joyce is regarded as Key’s closest advisor, and National’s strategic mastermind.

‘This will make the 2011 General Election a fair fight instead of a somewhat undemocratic cake-walk,’ Key said in his Beehive Press Conference. He added that came to the decision after speaking with Joyce, who ‘loves a challenge.’

Heh.

Joyce will work closely with senior Labour MP Trevor Mallard, who is currently running Labour’s election campaign. Joyce has insisted that the two men will work together as equals.

‘Trevor’s role will be crucial to our success’ Joyce announced in a joint press conference with Labour leader Phil Goff. ‘In light of recent information security problems, Trevor will safeguard our campaign strategy documents in a tent on the Auckland Islands.’

The Auckland’s are an unpopulated sub-Antarctic island group with no phone or internet access. ‘Everything depends on this,’ Joyce insisted, as Mallard’s tiny orange dinghy sailed out from Invercargill into fearsome three meter swells.

Well they will be safer there, than backing them up to the webserver.

In the interests of party balance, Labour has traded Joyce for Dunedin South MP Clare Curran, and she’s believed to be behind the Prime Minister’s shock announcement that he will conduct the remainder of his campaign in virtual reality environment Second Life, and prefix every single word he speaks with the letter ‘i’.

The Prime Minister’s fairy-winger avatar commented on the new strategy when he addressed an online press conference of goblins, virtual journalists and the National Party Cosplay Association this afternoon.

‘iI imay ihave imade a ihuge imistake,’ Key said.

I love the phrase “the Prime Minister’s fairy-winger avatar”

Michael Field at Stuff reports:

Horotiu, the taniwha potentially blocking the tracks of Auckland’s multi-billion dollar rail dream, is the latest celebrity to open a Twitter account.

The taniwha has also gone global, with London’s Daily Telegraph headlining: “‘Swamp monster’ threatens Auckland railway project”.

Drawing on a Stuff story, the Telegraph quotes Glenn Wilcox, a member of the Auckland City Council’s Maori Statutory Board, demanding protection for Horotiu.

“As kaitiaki, or guardians, they protect people, but they also get up and bite you if they do not like what you are doing,” Mr Wilcox said.

On Twitter the debate has sparked two new accounts – TaniwhaHorotiu and HorotiuTaniwha.

The first carries an early complaint that taniwha do not make an international list of mythical creatures.

The two twitter accounts have even been chatting to each other Some of the tweets have been:

• @TaniwhaHorotiu Yur a dirty faker, I’m the real Taniwha, go find your own drain bro
• @LIVENewsDesk What about hate crimes against taniwha? Lots of haters out there dissing Horotiu
• @AKcitymission Can i join youse fellas?…i’m about to be made homeless by Len Brown
• Steven Joyce has been bad mouthing my bros the Fiscal Taniwha http://bit.ly/jZcjWG

Steven Joyce’s quote was superb:

Transport Minister Steven Joyce said the project appeared to be plagued by taniwha.

“It does not massively surprise me,” he said. “Treasury found a few fiscal taniwhas as well, so it doesn’t surprise me that another one has turned up.”

I think the term “fiscal taniwha” should be adopted by Treasury for use in all future business case evaluations.

Steven Joyce has announced:

The government has today reached agreements with Telecom New Zealand and Enable Networks that will complete the roll out of ultra fast broadband (UFB) to 75% of New Zealanders where they live, work and study.

The government will partner with Enable Networks, which is 100% owned by Christchurch ratepayers through the Christchurch City Council, to build an ultra fast broadband network for Christchurch, Rangiora and surrounding areas.

The Telecom deals will see a fibre optic network built in Auckland, the eastern and lower North Island and most of the South Island.

As part of the deal, Telecom must split off its network arm, Chorus, into a completely separate company, so that all broadband retailers can compete fairly to on-sell wholesale ultra fast broadband. Chorus will maintain the Kiwishare obligations currently placed on Telecom.

Congratulations to Telecom, and commiserations to Vector and the Regional Fibre Group. Also congrats to the Minister for turning an ambitious policy into a reality.

There were pros and cons with either party winning, and I suspect the negotiations were very tough.

The major focus for many now will be on the structural separation of Telecom. This is probably going to the biggest change in the telco sector since Telecom was created out of the Post Office. The details of the separation are quite vital – Chorus needs to be totally independent from Telecom as quickly as possible.

Today’s agreements with Telecom and Enable mean the government will reach its goal of bringing ultrafast broadband to 75% of New Zealanders by 2019. The rollout will start immediately with schools, hospitals and 90% of businesses covered by 2015.

I believe the fibre rollout will change New Zealand. With fibre to the home, you will get far far more people working from home, less demand for office space, video-conferencing will be as routine as changing the channel on your TV etc.

Wholesale household prices will start at $40 or less per month for an entry level product and $60 per month for the 100 Megabit product. There are no connection charges for households.

Mr Joyce says today is a very exciting day for New Zealand.

“The future of broadband is in fibre, and taking it right to the home will bring significant gains for productivity, innovation and global reach.”

The prices seem pretty reasonable. What will be interesting is what retail services develop to use the fibre. such as combined phone/Internet/TV/movie packages.

The future is in fibre, and I do believe this will be a contributor to increased productivity and economic growth.

Chorus is going to become (for most of NZ) the provider of both copper and fibre access. It will be an infrastructure company. Over time, I’d like to see Chorus (and the other local fibre companies) move towards providing cellphone towers to retail telcos such as Vodafone, 2 degrees and Telecom. It would make a lot of sense as the LFCs will have the fibre connection for the backhauls, and it would mean each telco wouldn’t need to get consent for their own individual towers, but could just hire space on a tower for their transmitters.

I blogged back in March on the Telecommunications Bill going through Parliament, and some of the issues around it which were causing concern.

Steven Joyce has just announced:

Regulatory forbearance on wholesale prices for the ultra-fast broadband network will be replaced with contractual mechanisms that would apply if the Commerce Commission regulates prices lower than those contracted, Communications and Information Technology Minister Steven Joyce announced today.

In announcing the move, Mr Joyce says that he had listened carefully to industry concerns in regards to the plan for regulatory forbearance over the 8 ½ year build period of the contract.

“While I think their concerns are more theoretical than real, given that pretty much everybody has been happy with the very competitive prices announced by CFH to date, we have been able to find an alternative solution which will give the infrastructure builders confidence to stay committed to their low capped prices, and customers confidence that they are will continue to get the best prices over that 8½ year period.”

This is an excellent outcome, and congrats to the Minister for devising it. It retains price certainity for investors (which means we get more fibre laid for $1.5b) but also leaves in place the security of the Commerce Commission to ensure consumers are not being over-charged.

If for some reason the Commerce Commission found prices should be lower than contracturally agreed (which is unlikely but predicting the future is difficult in such a innovative industry), then the Government bears the risk as the entity that entered into the contracts with the local fibre companies.

The Minister get big kudos for making the decision. I think it is also worth handing out kudos to the various ICT groups and Opposition MPs who pressed for changes. Both Labour and ACT MPs on the Select Committee were very receptive to pushing for changes.

I had been concerned that all the good work the Government was doing in investing the $1.5b into fibre would get over-shadowed by the arguments over the proposed regulatory forbearance period. This decision means all eyes will now go to whom will get the contract for the 85% of areas not yet allocated.

That decision is due in a matter of days, maybe weeks. And after that then there’s going to be a lot of work for people in digging up roads, putting in trench, laying fibre etc. The combined public and private spend will probably be $4 to $5b over the next eight years or so.

As we head towards fibe connected homes, I think we will see significant changes in society – many more professionals working from home, virtual offices for some firms, video-conferencing as common as TV,  movies and TV on demand etc, mass storage on the cloud etc. It’s an exciting future.

Vernon Small writes in in the Dom Post:

I come to defend Steven Joyce, not to bury him. In the fracas over the Government’s decision to let radio companies pay for their licences over five years, rather than pay $96 million up front, he has taken more than his fair share of unfair criticism.

Oh dear. I expect Vernon will now be pilloried on certain left wing blogs.

Suggestions that Mr Joyce, the communications and information technology minister, had some sort of conflict of interest in helping out the Brent Impey-led company (that Mr Joyce established) survives only till you know that Mr Joyce and Mr Impey are . . . errr . . . not close.

Mr Impey, with Canwest, led a successful “unfriendly takeover” of MediaWorks in 2001- that is, one bitterly opposed by Mr Joyce.

I was unaware of this, and not seen this in any other media. It is a good story that adds new facts to an issue.

The minister initially opposed any deal with the commercial radio sector. To protect himself further, he also sought advice from the Cabinet Office and was told he did not have a conflict of interest. It might have been wiser politically for him to step aside anyway, but that is miles away from any wrongdoing.

Those who have never actually worked in business (like most Labour MPs) have no real idea of what does and does not constitute a conflict of interest. They think that any affiliation or association what-so-ever means you must recuse yourself. This is not so. This would see the Minister of Finance unable to own a home, or the Minister of Agriculture unable to be a farmer.

Of course, it fits Labour’s narrative of a Government pandering to the few not the many, feathering the nest of its rich mates and acting as lobby-fodder for business.

But is Labour saying it wants a hands-off approach to business, whether or not that involves job losses?

WE SHALL never know what would have happened had MediaWorks been denied the payment relief and asked to stump up the full $42m at the end of 2009 – as advertising rates were falling, the economic outlook was bleak and banks were ultra-cautious about lending.

If one or more major media companies had failed, more than 1000 jobs could have been on the line. …

Mr Joyce is also blunt about the political fallout if the Government had said “get stuffed” and one of the big companies had collapsed. Once it was known the Government had rejected a deal at commercial interest rates with all the frequencies held as collateral, ministers would have been pilloried as hard-hearted, far-right, hands-off ideologues.

Is there a single person who doesn’t think Labour wouldn’t have done exactly what Vernon writes above, and lashed the Government for destroying jobs if it had refused the deferred payment scheme, and a major broadcaster collapsed?

There’s been a number of news stories on the Government’s Telecommunications Amendment Bill, which is currently before the Finance & Expenditure Select Committee. A typical story is this one at Computerworld.

The telecommunications sector is always somewhat controversial, but this bill has attracted criticism from just about everyone – telcos, ISPs, the Commerce Commissions and user groups. This post is aimed to explain what the debate is about, and reflects my views.

It is worth noting that most of what is in the TAB is not controversial, and is generally well supported.

Three aspects which are controversial are:

1. a “regulatory holiday” for the local fibre companies until 31 December 2019.
2. “re-averaging” the costs of local loop unbundling and unbundled bitstream, which will lower the wholesale cost in rural areas but increase the wholesale cost in urban areas by around 20%
3. possible structural separation of Telecom if they win the majority of regions for fibre rollout

In this post I will leave (3) for now as that little baby is so complicated it needs its own post. I want to focus on (1) and (2) and these will apply (if passed) regardless of whether Telecom wins most of the regions for urban fibre, or the lines companies led by Vector win most of the regions.

You may ask why would the Government consider giving the future fibre companies an exemption from the normal regulatory oversight of the Commerce Commission? Well the short answer is because the companies bidding to be future fibre companies have asked for it.

Okay well companies ask for lots of things from the Government. Many companies would like to be exempt from the Commerce Commission until 2010. Why would the Government agree to this?

The answer is because then the bidders will make better bids. They value having a regulatory holiday, so they will agree to roll out more fibre for the same subsidy. It is what Sir Roger Douglas (very perceptively) said was a regulatory subsidy instead of a greater direct financual subsidy.

Now before we talk about the pros and cons of this approach, you need to know the background. In the 2008 election National pledged $1.5b towards having ultra-fast broadband rolled out to 75% of NZ over the next decade. This was a lot of money (Labour committed only $300m – 1/5th of what National did) and it was in my opinion a great policy.

Work done by the NZ Institute concluded that investing in ultra-fast broadband, would result in significantly higher economic growth, and there is evidence from other countries to back this view up.

Now the cost of rolling out fibre to 75% of NZ is hard enough to estimate, let alone what the direct commercial returns will be on doing so in ten years time. The amount of subsidy needed to achieve the 75% target was estimated at $1.5 billion, but this was an estimate. An opposition does not have the resources available to get a precise projection, and even when you do have access in Government to Treasury, even then projections can be wrong.

To some degree one was never going to know until the actual commercial negotiations conclude, whether $1.5b was enough. InternetNZ did try to get some idea of how much it would cost to reaach the goal of 75%, and what would be the best way to go about it. They (which includes me)  commissioned a report from Network Strategies, a specialist economics consulting firm, which is here.  It was published in 2008.

The report concluded that the cost of fibre to 75% of NZ was around $3.3b if one utilised existing utility companies for at least half of it, and that the government’s contribution would need to be around $1.75b. So the $1.5b was a pretty good estimate, but may be not quite enough.

So this takes us back to why the Government is seeking to legislate a regulatory holiday – it makes it more attractive to its potential commercial partners, and helps close the gap. So the motivation is good – to save the taxpayer money.

However that does not mean it is the right decision. If there is a funding gap between the 75% target and what you can achieve with $1.5b, I would rather it be dealt with directly, not indirectly by way of regulatory holiday. Options are to increase the $1.55b on offer, or to reduce the coverage area from say 75% to 70% or push out the timeframe from say 10 years to 12 years etc.

The concern over the regulatory holiday is that whomever wins the contract, will be exempt from the Commerce Commission regulating access to their services until 2010. The Government will be relying just on the contracts they had to regulate the price, However this places Crown Fibre Holdings in the unenviable dual role of being an investor and a regulator. Also 2020 is almost nine years away, and that is a lifetime in the Internet world. The costs and prices of fibre and data may have changed massively in that time. Many people are very nervous about what could happen in the next nine years. This is partly because of the lessons from the past with Telecom (note again they may not be the fibre companies).

Now the Minister has pointed out that as the local fibre companies can not be owned by a company that will provide retail services over them, then it is less likely there will be a need for regulation, as the fibre companies should operate on an open access platform to all providers. But a lot of devil is in the detail. For example you could have Chorus (if they win) saying it will operate a volume discount scheme that only Telecom Retail will qualify for due to its size.

The Minister also says that as the fibre products will be competing against the regulated copper and that the challenge will be ensuring uptake, which will keep prices down also. I suspect Steven is right on the prices – but from my thinking why remove the safety net of the Commerce Commission, in case you’re not.

Now the other major change is that the calculation of costs and hence prices for the current copper based broadband services is to change from deaveraged to reaveraged. At present the costs and prices reflect the fact it is cheaper in urban areas than rural areas. The Government is proposing to legislate to change this, which means the price of broadband over copper will increase in urban areas. The estimate I have seen is by 20%.

So again why would you do this? The answer is the same. It means those bidding for the fibre contracts will be motivated to invest more money into them. Because if the price of broadband over copper increases, then you can be confident that more customers will switch over to broadband over fibre.

So again the rationale is quite understandable, but again that does not mean it is necessairly a good thing. It means people in urban NZ will pay higher prices than they should for broadband over copper for the next six years or so. Should the Government be effectively tilting the playing field to favour fibre over copper?  Again I’m in favour of tilting the field by way of Government subsidy, but not in favour of tilting the field by interfering with a regulatory regime that actually has worked very well in the last few years.

As I said, in a separate post, I’ll cover the possible structural separation of Telecom, and how this may result in a really great outcome or a really lousy outcome, depending on how the structural separation is done. And the consequences of getting it wrong will reverbate for a couple of decades. This is not something to rush.

Dave Burgess in the Dom post reports:

Intoducing legislation to reduce or cap the number of taxis in Wellington would be a move back to the bad old days of the 1970s and 1980s and will not happen, Transport Minister Steven Joyce says.

The Government’s position goes against that held by Wellington Mayor Celia Wade-Brown, who has said that limiting taxi numbers was an area for lobbying the New Zealand Transport Agency, which issues taxi licences.

The Taxi Federation also supported a cap on the 1237 taxis licensed for Wellington.

“The Taxi Federation regularly is nostalgic for the good old days and periodically says it wants to restrict the number of taxis,” Mr Joyce said. “I notice they never volunteer to reduce the numbers in their own fleets.”

A good point, and nice to see the Minister resisting a step back in time.

The lack of action in cutting cab numbers may disappoint a significant number of Wellingtonians, if a poll on dompost.co.nz is anything to go by. Three- quarters of the 664 respondents said they believed there were too many taxis in the city.

“At different times there can be too many, but I notice that whenever you are looking for a cab you are never too worried about the number of taxis,” Mr Joyce said.

“You get more concerned if you aren’t looking for a cab and you see them around.”

Also often you don’t just want any old cab, but one from a company you trust. Some taxi firms are very much a matter of using only as a last resort.

No Right Turn has breathlessly labeled as corruption the Government’s announcement of the first ultra-fast broadband contracts.

Why? He blogged:

So, what does this look like by electorates? UFB will be rolled out to:

• Whangarei, held by National’s Phil Heatley, with a majority of 14,663;
• Hamilton East, held by National’s David Bennett with a majority of 8,820;
• Hamilton West, held by National’s Tim Macindoe, with a majority of 1,618;
• Taupo, held by National’s Louise Upston, with a majority of 6,445;
• Taranaki-King Country, held by National’s Shane Ardern, with a majority of 15,618;
• Tauranga, held by National’s Simon Bridges, with a majority of 11,742;
• New Plymouth, held by National’s Jonathan Young, with a majority of 105;
• Whanganui, held by National’s Chester Borrows, with a majority of 6,333.

So, the first thing to note is that only National-held electorates get broadband; those with Labour MPs need not apply (sorry, you voted for the wrong person and so must be punished). The second thing to note is the targeting of marginal seats New Plymouth and Hamilton West. It’d be interesting if someone who knew about IT policy used the OIA to delve into National’s rollout decision, but from here it looks like pure pork-barrel politics. And I don’t like it one bit.

Idiot/Savant is like the boy who cries wolf. He slanders so many people as corrupt, that it becomes a meaningless label. Basically it just all comes over as hysterical rants.

His idiocy was picked up and blogged by Clare Curran, but even Clare worked out what weak ground he and she were on, and later did updates backing away “before David Farrar at Kiwiblog has a go”.

I will indeed have a go at such gross stupidity, and even worse effectively slander. Where do I start.

1. National holds every single seat outside the four main cities (which due to their size are more complex decisions) except for Palmerston North. So I guess the first contracts should have gone to Tasmania, to stop them including National held seats.
2. Six of the eight seats listed are very safe seats with majorities over 5,000
3. This is not a case of some areas getting funding, and some not getting funding. All medium to large urban areas will be getting fibre to the home. This is purely an announcement of the first two contracts. Other contracts will be announced in the near future – the difference between being announced first and second is absolutely minimal.
4. Ever heard of MMP?

Clare initially blogged:

Steven Joyce is a crafty fellow. But even he will overplay his hand one of these days.

Then later as she realised every non metro seat bar Palmie is national held:

Oh and before David Farrar at Kiwiblog has a go and points out that Labour holds only Palmerston North of the general electorates outside the metropolitan centres, that’s true. But it would have been smart for the government to think about this. Instead it doesn’t look so good.

So Steven in the one blog post goes from the too crafty manipulator of funding to National seats to being not very smart for not thinking about the look. He can’t win can he!

Frankly I am sure Steven didn’t spend one second thinking about electorate boundaries with the contracts, and am personally very pleased with that.

Oh and here’s one for the conspiracy nutters. 25% of NZers will not be covered by the UFB initiative. And pretty much 100% of them live in National held seats. So 100% of people in Labour seats will get UFB and only around 65% of people in National sears. Yes, obviously pork barrel politics.

Steven Joyce has announced:

The cities of Hamilton, Tauranga, Whangarei, New Plymouth and Wanganui will be among the first to benefit from the government’s rollout of ultra-fast broadband (UFB), says the Minister for Communications and Information Technology Steven Joyce.

Crown Fibre Holdings has concluded negotiations with two partner companies, following shareholding ministers’ approval of the deals over the weekend.

The partners are:

• Northpower Limited
• and Ultra Fast Fibre Limited, owned by WEL Networks,

The new companies will rollout fibre in Whangarei, Hamilton, Cambridge, Te Awamutu, Tauranga, New Plymouth, Wanganui, Hawera and Tokoroa.

Northpower will commence its roll out in Whangarei before Christmas with Ultra Fast Fibre expected to begin laying fibre early in 2011.  Both companies will have completed their rollouts by 2015.

These joint ventures represent nearly 16 per cent of UFB premises and a combined value of more than $200 million.

This is excellent news. It shows the regional approach has worked, in preference to one nation-wide contract.good to see there will be some fibre laid before the end of the year.

There was some suspicion that Northpower and WEL would not end up with the contracts, despite being announced as preferred bidders. People speculated that Telecom might grab it away from them in a negotiation for a nation-wide contract.

So good to see there will be some fibre laid by the end of the year.

CFH will shortly announce a list of parties with whom it will next elect to negotiate with in the remaining 25 UFB regions.

All eyes are on this.

My view is that Telecom/Chorus will be successful if their price is the same or close to the Regional Fibre Group – say within a couple of hundred million. There are long-term benefits to getting Telecom to structurally separate, and having Chorus as a stand alone infrastructure company.

But it is possible the Regional Fibre Group will have undercut Telecom. They have certain cost advantages such as current ducts and poles and resource consents. Over 70% of the cost of fibre is digging up the road, and the less of that you have to do, the cheaper you do it.

In an ideal world I’d have Telecom sell Chorus to the Regional Fibre Group – then you’d have an integrated infrastructure provider. However I’m not sure Vector and co could afford to buy it!

Tracy Watkins at Stuff reports:

Parliament’s Speaker Lockwood Smith has confirmed he will stand down from his Rodney seat at the next election and seek to be returned to Parliament on National’s list instead.

The move follows months of speculation that Dr Smith would not seek re-selection in the blue-ribbon seat because of the constraints of his role as Speaker.

Dr Smith said he would continue to help his constituents and push the major roading projects in the electorate, “but as Speaker I have found it to be a little more difficult to be involved in political debate”.

“By my seeking a place on the National Party List, I feel that no matter what the future may hold for me the people of Rodney will be able to select a new member better able to voice their views in wider political debate.”

Lockwood has been a very popular MP in Rodney, and they will be sad to see him go. He will probably romp in at the top of the National Party list also. Lockwood frequently forces Ministers to ask questions they don’t want to, but this doesn’t dampen his popularity in the party. To the contrary he gets treated as a rock star at conferences, with delegates lining up to say how wonderful it is to have a Speaker who holds the Government to account -even if it is their Government.

I would not be entirely surprised is Sir Lockwood ends up in a diplomatic role towards the end of the next Parliament (if National is in Government again).

The selection for Rodney will be interesting. Steven Joyce lives in the electorate and is a popular person in the party (chairing winning campaigns does that). However there is no guarantee that there won’t be many strong candidates seeking the nomination and Steven I suspect will want to be careful he does not do a Phil Twyford and go for a nomination, and fail to gain it

I’m in Rotorua for the NZ Computer Society 50th anniversary conference.

Steven Joyce spoke on how Governments are not good at innovation – tried that in an experiment known as the Soviet Union. Said innovation happens in all the companies and firms that are represented at this conference, and the Government’ job is to try and facilitate a supportive environment.

He said that copper has done better than anyone expected, but fibre is the future. The current investment in copper is about catching up with the rest of the world, while the planned investment in fibre is designed to give NZ a competitive advantage – an advantage that the NZ Institute says could be worth over $2b a year in extra GDP.

While most focus is on the $1.5b urban fibre project, Joyce said he considers the rural broadband situation is more urgent as around half our rural citizens still can only get dial-up. I thought this was ironic as the speed at the conference hotel had slowed down to dial-up also!

I missed most of Paul Matthews response, as both the wireless and mobile Internet connections were frozen so had to reboot my laptop.

Conference Chair Liz Eastwood is doing a show and tell of technology from the past – the slide show projectors we used to use to show off our holidays, and the telex machines etc etc. You do forget how much the world has changed!

Steven Joyce has announced:

The Minister for Communications and Information Technology, Steven Joyce, has accepted a Commerce Commission recommendation to regulate mobile termination rates.

He says regulation will improve competition in the mobile market and result in lower prices for mobile phone users.

Mobile termination rates are the wholesale prices charged by a mobile network operator (such as Telecom, Vodafone and 2degrees) for providing services to customers from other network operators.

Under Section 19 of the Telecommunications Act the Minister is required to make the decision that best gives, or is likely to best give, effect to the purpose of Part 2 of the Act – that is, to promote competition for the long-term benefit of end-users of telecommunications services.

Mr Joyce says he considers that accepting the Commission’s recommendation meets this test and in this case will lead to lower mobile termination rates and more competitive mobile pricing plans for consumers.

This is no surprise at all – but still a welcome decision. I believe it will lead to more competition and better pricing plans. The current MTRs act as a price floor and deter competition.

Consumers in Auckland should be choosing their mobile phone provider on the quality and price of the services they offer. Instead far too many have been forced into choosing a provider based on  the fact most of their friends are with that provider, and they can’t afford to be on another network.

Imagine if one had to choose your ISP, based on whom you send and receive most of your e-mails from. Imagine having to pay say 5c an e-mail if it was to someone on a different ISP.

The Herald reports:

The Government has decided not to lower the blood-alcohol limit for drink driving for the moment.

It had been considering lowering the legal blood-alcohol limit from from 80 milligrams of alcohol per 100 millilitres of blood to 50 milligrams. But Transport Minister Steven Joyce said today that the Government will first do some New Zealand-specific research on the level of risk posed by drivers with a blood alcohol limit between 0.05 and 0.08.

I am so pleased about this. I am not 100% opposed to a reduction in the BAC limit, but have strongly submitted that there was not enough research to justify a change.

I have previously blogged at how there was only one driver aged over 25 killed in a road accident who had a BAC between 0.05 and 0.08. What we don’t know is how many people do actually drive with a BAC between 0.05 and 0.08, and hence what the cost of a law change would be measured against the benefits.

The Government has also announced:

• A zero drink drive limit for recidivist drink drivers.
• A zero drink drive limit for drivers under 20 years of age.
• Much tougher penalties for serious offences causing death and drink driving causing death.
• The introduction of alcohol interlocks for repeat drink-drivers.

The zero limit for recidivist drink drivers is a very good idea, as are the alcohol interlocks. Far better to prevent an accident, than punish someone afterwards with sensible targeting of recidivist offenders.

I’m pleased to see the Government exercise independent judgement on this issue, and not just do everything that the (taxpayer funded) lobby groups demand.

The Dom Post reports:

Saturday postal deliveries may be axed or posties may call only every second day as NZ Post looks to keep its mail business profitable in the face of people switching to email.

In a letter to State Owned Enterprises Minister Simon Power, obtained under the Official Information Act, chairman Jim Bolger said the NZ Post board was looking at several options, including “reducing the number of days that mail is delivered”.

Mr Bolger said yesterday that deliveries every second day were an option. “Personally I don’t think you could rule that out”, but that was not a NZ Post position. “There is only one message – mail volumes are going down worldwide. Digital technology is replacing hard copy.”

However, a spokeswoman for Communications Minister Steven Joyce, who must approve a change in delivery days, said no option had yet been presented to him. “He would take a lot of convincing.”

I think canning Saturday deliveries is a no brainer, and even going to deliveries on Monday, Wednesday and Friday only is worth considering. I really doubt there are many people who need to get their mail every day.

Most houses did not receive a piece of mail every day and some got only one letter a week.

Would be interesting to see exact stats on that, but they sound right to me.

Postal Workers Union advocate Graeme Clarke said an end to Saturday deliveries would be popular among the 1200 posties he represented – provided they were paid the same.

What world does Mr Clarke live in? Why on earth would anyone expect to continue to be paid to work six days a week, when in fact they only work five?

Engineering, Printing and Manufacturing secretary Andrew Little, representing 4500 NZ Post workers including 2000 posties, was not opposed to five-day-a-week deliveries in principle. Deliveries every second day would be another matter.

Good to see Andrew not entirely opposed. I think deliveries three times a week is also worth looking at – it could significantly reduce the cost of postage. Remember the purpose of having a postal system is not to create jobs, but to provide an efficient and effective communication service.

Issues of bag weights and pay would need to be discussed.

If bags are heavier, then could be fair enough to look at an increase in hourly rates to compensate. However that is very different to Mr Clarke just saying we should be paid the same for working one day a week less.

Steven Joyce has announced:

Communications and Information Technology Minister Steven Joyce today released a discussion document on trans-Tasman mobile roaming.

The discussion document has also been released in Australia by Mr Joyce’s counterpart – Broadband, Communications and the Digital Economy Minister Senator Stephen Conroy.

The document is at MED.

The document sets out three preliminary conclusions for New Zealanders roaming in Australia and Australians roaming in New Zealand:

1. the features offered and the quality of service are reasonable
2. the transparency of prices appears to be inadequate and consumer awareness of prices seems low
3. the prices themselves seem relatively high.

Can’t disagree with 1 – roaming works really well in Australia (and in fact in most countries.

I’ve previously blogged about the outrageously high prices. Vodafone has recently announced a reduction, which is good.

No 2 is for me, the most important. People need to be told upfront about the cost of roaming data. Some of the possible measures proposed are:

Centralised website. A website where, for example, a customer is able to select all the domestic operators from his or her home country and see, on a single page, the best (lowest) rates that they each charge for trans-Tasman roaming (for postpaid and prepaid, and for each visited network).

I doubt this will achieve much as people don’t tend to decide on a carrier based on their international roaming rates.

Personalised SMS on arrival. Operators send their customers one or more personalised SMS when they arrive in a destination, indicating the price they will be charged when roaming (for voice, SMS and data23). To avoid unwanted SMS, this could be an opt-in service, or a ‘pull’ (one that requires the customer to send an SMS first) rather than a ‘push’ service.

This generally happens with Vodafone, which is good. I think it should be mandatory for all networks to send you a message alerting you to the roaming rates in a country.

SMS after use. In some countries, such as the United States it is common for operators to send an SMS to a domestic customer each time they complete a communication, to indicate the price of the communication and (in the case of prepaid users) the remaining account balance. This could involve either a ‘pull’ or a ‘push’ service.

The initial SMS is often received when you have landed at the airport and are pretty distracted. Having an SMS arrive after say the first MB of data would also be useful. I wouldn’t mandate it to occur after every use, but if people after 1 MB get a message saying “You have already incurred $30 of charges” it would be effective.

Billing caps. Postpaid users, in particular, are vulnerable to unexpectedly high bills for roaming, even though many operators now make a practice (both on their websites and in their retail outlets) of warning customers of the prices involved, especially for data roaming. Billing cap systems may present a solution, implemented on either an opt-in or opt-out basis.

Also potentially useful, so long as those who do not want to keep using mobile data etc can easily say they wish to exceed the billing cap.

The discussion document also looks at some price regulation options – both at wholesale or retail level.I would rather avoid price regulation, and focus on enhanced transparency.

This is a discussion document, so you can have your say by e-mailing submissions to MED.

The Herald reports:

The Transport Minister is pushing for security cameras in all city taxis and the taxi federation hopes they will be in place by the middle of next year.

Steven Joyce announced this morning that he would put to Cabinet the recommendation in May.

The move follows recent attacks on taxi drivers: on Saturday, two men held a knife to an Auckland cabbie’s throat for $30 in coins, and in January driver Hiren Mohini was stabbed to death in Mt Eden for a $15.20 fare.

Many Auckland cabbies have since said that they are now scared to work at night.

NZ Taxi Federation executive director Tim Reddish said the federation had been pushing for a Government mandate for security cameras for three years.

“We’re just delighted to achieve our objective and the fact that it will save lives,” Mr Reddish said.

If the recommendations gets through Cabinet, he expects the first cameras would be installed toward the end of the year and be complete by the middle of 2011, Mr Reddish said.

He expected a 24-hour distress alarm – that would let cabbies call for help – would also be part of the new legislation.

I’m confused.

The taxi federation say they are delighted and have been advocating cameras for years, as a safety measure.

So why haven’t they just gone ahead and done it themselves?

Why in God’s name do we need a special law for this?

It is a good idea to get the support of the Minister, sure. But why not just have the Minister write a letter to all taxi companies saying he supports cameras in cars.

Mr Joyce said the industry would pay for the cameras – a cost expected to increase fares by about 30 cents.

So why would individual taxi firms not decide to do this for themselves, without coercion? Wouldn’t drivers be demanding cameras be placed in their cars if the cost averages out to only 30c a trip.

And even if a few companies don’t implement cameras, then their drivers can choose to work for another company.

It’s sad that the NZ Taxi Federation thinks it needs a law passed, to be able to put security cameras into cars. Why don’t they just get on and do it.

The Herald reports:

Mallard cleverly tricked National MPs into not objecting to leave for a motion congratulating Tertiary Education Minister Steven Joyce for getting his degree some two decades ago.

It was very amusing. The Govt did drop the ball on this one, and Labour deserved their fun.

The actual motion moved was to congratulate Steven Joyce on getting his degree conferred 21 years after he started it.

The Dim-Post is in fine form with its version of the Government’s mining policy:

• Amendment to Crown Minerals Act prohibits Energy Minister Gerry Brownlee from yelling ‘I’d like to open up her schedule four’ whenever an attractive aide enters the Cabinet room.

• Streamlined process for mining consents to make it easier for everyday New Zealanders to operate their own open pit cast mines or surgically excavate their back yards.

• State Services Commission enquiry to find out who keeps adding ‘unobtanium’ to the list of rare minerals detected in Mt Aspiring.

• $4 million dollars for extensive exploration of Coromandal focusing on area where Gerry Brownlee lost his beloved teddy-bear ‘Mister Wookie’ while on a day walk as a child.

The Mister Wookie one especially just cracks me up.

The National had it première episode today, interviewing Steven Joyce. They don’t have TV3 on Bintan Island, but I have got a copy of the transcript, which is interesting:

DUNCAN I mean Phil Goff and the Labour Party attacked you this week and they quoted Groucho Marx saying ‘of you these are my principles and if you don’t like them I have others’. I mean that’s the argument about you that you don’t stand for anything except the popularity in the polls.

STEVEN Oh I don’t think that’s fair, I mean I’ve got some pretty – you know some views of my own which are built from my background and from my family background, my father was a small businessman and I started out as a small businessman, and we grew it a bit, but those things have always been in my background but at the same time politics is about actually what people want you to do, and what people are prepared to accept.

I like the “started out as a small businessman”, which is correct, and rather modest.

STEVEN Well currently the polytech sector next year will lose about 70 million dollars across the sector from what it’s had previously, so that was announced in Budget 2009, the polytechs are aware of that, they’re working through that, we’ve don’t a lot of work on polytech governance, the next couple of weeks I’ll be announcing 80 new government appointments to polytech councils, and what I’m seeing is somebody new in the portfolio, is that the people in polytechs are being very reasonable, they understand what the challenges are and certainly in this last 12 month period, 2009, they’ve responded by improving the performance of those polytechs.

Normally appointments are staggered, but of course under the new governance model, there are 80 initial appointments to be made. It will be interesting to see who gets appointed.

DUNCAN Just on to your portfolio, another portfolio KiwiRail is it true that they want about a billion dollars or perhaps more over ten years from the government?

STEVEN I think they’d take as much as we could give them.

Heh. So true.

DUNCAN Do you want KiwiRail, do you want to hang on to it?

STEVEN Oh look I think the price that was paid by the previous government, and I’ve said it before, it was nuts, it was over the top, and what we have said we’d make the best of it, it’s an asset that is a sunk economic asset for New Zealand, the options are not do something with it and watch it run down and fall to bits over time, the other option given we’ve got a lot of freight growth coming over the next 20 years, is to put some investment in, but we’ve gotta be very careful about the way we do it.

We can’t sell it, as no one would buy it!

DUNCAN We understand that Jim Bolger won’t be rolled over as the Chairman of KiwiRail from June, is that correct?

STEVEN The governance of KiwiRail is the responsibility for my good friend Mr Power, but we are looking at refreshing the governance.

DUNCAN So Jim Bolger will be removed as Chairman?

STEVEN My understanding is that we’re looking at renewing the governance but that’s for Simon to announce.

That sounds like curtains for Jim, to me.

DUNCAN Do you want to be the Prime Minister?

STEVEN No.

DUNCAN Do you want to be a Finance Minister?

STEVEN No.

Well that is pretty concise.

Then there was the panel with Stephen Parker, Deborah Hill-Cone and Vernon Small. I am glad to see that the panel on The Nation is not just talking heads like on Q+A, but actually get to interview the guest.

I also like the fact that the panelists are basically journalists or political commentators, rather than other politicians. It annoys me when I see the PM get interview on Q+A, and the co-leader of the Green Party is a panelist reviewing what he said.

I am a fan of Q+A, but have always said I don’t like the way they have done the panel.

STEVEN Well I worry about some of the level 1 to 3 courses, which are the lower level courses where perhaps as many as 100 people are enrolled at the start of the year and yet somehow at the end of the year or the end of the course there’s only 30 left, and you pay 100% up front and some institutions are brilliant with pastoral care, others see it not really as their role, i.e. you know our job is to teach them and if they don’t turn up that’s their problem, and I think we’d like to see them take a bit more interest in the pastoral care, those that aren’t doing so.

I never realised the non completion rate was so high for so many courses.

The Herald has a profile on Steven Joyce, including some quotes from me.Some interesting background I didn’t know about:

Joyce was born and grew up in New Plymouth, attending Francis Douglas Memorial College, then Kapiti College.

His father, a Four Square grocer, was from Eltham and his mother came from Kaponga before moving to Stratford. Joyce says his father was a middle-distance runner, who would run from Eltham to Stratford to visit his mother and run back again.

Joyce was raised a Catholic, and went to church every Sunday until he left home. Now he says he is “not really” religious.

I can normally spot the lapsed Catholics!

The Herald reports:

The Government intends imposing a zero alcohol level on drivers under 20, Transport Minister Steven Joyce has confirmed.

He said today it was part of a package aimed at reducing the road death toll, which was 60 per cent per capita higher than Australia’s.

Mr Joyce said the zero alcohol level for drivers under 20 still had to be signed off by the Cabinet.

“I think it is likely to get through,” he said on Radio New Zealand.

Heh, I doubt Steven would be announcing it unless he knew it would get through

“We do need to take a systematic approach to the issues around young people dying on our roads.”

At present teenage drivers have a 30mg alcohol limit.

Mr Joyce said there would also be proposals in the package covering drivers up to age 24.

I am supportive of a zero blood alcohol limit for under 20 year old drivers.

The current limit of 30mg sends out a mixed message. It is close to a de facto zero limit (a couple of quick drinks could put you over) but it means that the message is you can drink a bit and drive.

For teenagers, whose crash stats are appalling, a simple message does better – simply if you are the driver, you should not drink at all.

The Herald reports:

Tertiary students who fail more than half their courses may lose their student loans as the Government moves to crack down on abuse.

Only 50 per cent of domestic students who started studying for bachelor’s degrees in New Zealand in 2004 finished their degrees within five years – suggesting that up to half of the country’s 145,000 bachelor’s students will fail or drop out.

Student allowances are chopped if students failed more than half of their courses in the previous year, but there is no requirement to pass courses to keep getting student loans.

I can see this changing very soon. However I think one will want some ability to access loans if say a student drops out, enters the workforce, but a few years later wants to return to finish their degree.

Mr Joyce pointed to research showing 41.5 per cent of New Zealand’s tertiary education budget went into student loans and allowances, compared with an OECD average of only 17.6 per cent.

He told the Weekend Herald he wanted to shift funding to pay for more tuition places. “I’d like to see more money going into actually training EFTSs (equivalent fulltime students) and I’m looking around for opportunities to deliver that in 2011,” he said.

The budget will be interesting.