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A system wide response

The issues the Government is looking at touch many areas, ranging from content standards to taxation to the development of creative industries. Responsibility for these areas does not sit with any single portfolio or agency, and no one government portfolio has the levers for coordinating a complete response. Ensuring our regulatory system remains healthy and responsive to convergence will require a thorough understanding of the overall system and collaboration across government and industry.

Therefore, as indicated earlier, a comprehensive cross-government work programme is under way to deal with cross-cutting issues, delivered by various departments. This section provides a road map to inform public participation in these work programmes by outlining the areas involved and work already under way or planned. Some of these work programmes form part of the Business Growth Agenda, alongside wider government initiatives. More information can be found at Business Growth Agenda section of the Ministry of Business, Innovation & Employment’s website.

Figure 5: Consumer multimedia options
Figure 5: Consumer multimedia options

Investment in fast connectivity networks

The adoption of mobile smart-devices has meant that consumers want and expect to move seamlessly between networks: from a home Wi-Fi connection over the UFB network, to mobile data on the go, using free Wi-Fi networks where available. High speed, reliable and ubiquitous connectivity is essential for the way New Zealanders work, interact and do business.

Communications networks underpin the services now demanded by consumers, and in 2013-14 total reported investment in the telecommunications industry reached $1.69 billion. It is increasingly important for applications that involve video and advanced services that improve productivity in areas such as health, education or agriculture to have a reliable and quality broadband service throughout New Zealand.

Noting the increasing importance of communications infrastructure to New Zealand’s future, the Government has consistently prioritised the upgrade of New Zealand’s communications network infrastructure through its Ultra-Fast Broadband (UFB) and Rural Broadband Initiative (RBI) programmes. Good progress is being made:

  • UFB is now available in 33 New Zealand towns and cities, the build is over half complete, and in June 2015 over 100,000 end users had connected to the network. Connections continue to be added at around 5,000-6,000 every month.
  • RBI has meant that 269,000 rural homes and businesses now have access to fixed wireless broadband, and 93,000 rural homes have access to fixed line broadband.

At 31 December 2014, New Zealand ranked 15 out of 34 OECD countries in broadband penetration – above the average, and ahead of the US, ranked 16, and Australia, ranked 21[1].  This is a change from 22nd place in June 2004.  Fibre connections are growing particularly fast, tripling in the year to June 2014, and putting New Zealand first for fibre growth in the OECD.

Investment is set to continue, with Government providing up to $210 million in additional funding to extend the UFB to 80 per cent of New Zealanders in additional towns and urban areas, and $100 million to extend the RBI to areas outside of the UFB footprint. A new Mobile Black Spot Fund of $50 million will expand mobile coverage to rural and remote areas.  Local authorities are invited to nominate areas to receive new coverage under the selection process for these programmes and to inform the Government of how broadband or mobile investment supports their regional economic development priorities.

In 2012 the Government spent $157 million clearing the 700 MHz radio spectrum band to allow the development of new 4G mobile networks. These new networks are now being rolled out across the country, with expected economic benefits for New Zealand of up to $2.4 billion over the next twenty years.

Cyber security

Connectivity, data and network-based applications are an integral part of New Zealanders’ everyday lives and critical for businesses and the workings of government. Our reliance on this technology brings with it inevitable vulnerabilities – the risk of malfunction and the increasing risk of malicious actions. Ensuring our critical communications networks are secure and resilient is essential for economic growth, international competitiveness and national security.

The Government is in the process of refreshing its existing Cyber Security Strategy (the current Strategy is from 2011). The draft Strategy takes a multi-layered approach to cyber security, involving multiple agencies, private sector inputs, and tools.  The Strategy envisions a secure New Zealand as one where New Zealanders and their businesses prosper, the harm from cyber threats and cybercrime is reduced, significant national information infrastructures are defended, and New Zealand is respected internationally as a secure place to do business and store data.  The Strategy emphasises the importance of partnership with the private sector and that cybersecurity is everyone’s responsibility. The draft Strategy includes an Action Plan that pulls together a range of new and existing initiatives to improve New Zealand’s cyber security. The Strategy refresh is a multi-agency project, led by the National Cyber Policy Office within the Department of the Prime Minister and Cabinet.

Convergence and content consultation

Social and cultural policy objectives for the multimedia and entertainment industries are currently governed under two separate statutes:

  • The Broadcasting Act 1989 establishes the broadcasting standards regime and the Broadcasting Standards Authority, and the funding agencies NZ On Air and Te M?ngai P?ho. It stipulates restrictions on broadcast advertising times and regulates the broadcasting of electoral programmes.
  • The Films, Videos, and Publications Classification Act 1993 stipulates the classification requirements which must be met for publications supplied in New Zealand.

Neither the standards provisions of the Broadcasting Act nor the labelling provisions of the Classification Act directly address content delivered through online transmission methods. There are, therefore, areas where distinctions between different platforms are present in legislation, and where questions arise:

  • Content classification and standards: the differing standards and classification regimes for conventional, linear broadcasting, online content, and films and DVDs; the question of what sort of regime should apply to the new on-demand services
  • Election programmes: inconsistencies between the provisions in the Broadcasting Act and Electoral Act; the question of whether a media neutral regime can or should be established in the Broadcasting Act (as it is in the Electoral Act 1993)
  • Advertising restrictions: the differing treatment of television and radio, in which restrictions apply to some public holidays and Sunday mornings (in the case of television), compared to other media; the question of how to maintain places in the television schedules for minority interest content if the restrictions are removed or modified
  • Policy tools for supporting local content: among possible ways of supporting desired local content, New Zealand focuses on contestable funding, owning and mandating public broadcasters, and providing spectrum and funding for regional and community broadcasting. In the light of convergence it may be timely to take a fresh look at the range of tools available to government.

The Government has initiated a convergence and content consultation, including a discussion paper, “Content Regulation in a Converged World”, to consider these issues. This review focuses on existing rules contained in the Broadcasting Act and the Films, Videos, and Publications Classification Act and considers whether the rules apply consistently across all platforms, highlights instances where this is not the case and poses the question of whether in each case distinctions between platforms remain appropriate. The objective of the review is to ensure legislation is consistent and platform neutral, in order to provide an even and fair playing field for sector participants, as well as clarity for consumers. As in other areas of policy, it is important that legislation does not steer the market, but incentivises innovation and competition.

In relation to election programmes, a standard process for reviewing electoral legislation is through the routine Justice and Electoral Select Committee inquiry following each general election. The 2014 election inquiry has received several submissions regarding Part 6 of the Broadcasting Act.  In reviewing the convergence aspects of Part 6 of the Broadcasting Act the Government will also take into account any recommendations the inquiry may make on these provisions.

The review of content regulation is being led by the Ministry for Culture and Heritage in conjunction with the Department of Internal Affairs and the Ministry of Justice.

The consultation period closes on 16 October 2015 and submissions can be sent to convergence@mch.govt.nz or in writing to:

Media Policy Team
Ministry for Culture and Heritage
PO Box 5364
Wellington 6145
New Zealand

Spectrum management

Radio spectrum is both a scarce resource and a key input in the provision of a range of communications services, including mobile voice and data networks, broadcast television and radio services. New Zealand’s spectrum management regime is set out under the Radiocommunications Act 1989. A review of the spectrum management commenced in July 2014 and is currently ongoing.

The current spectrum management regime was designed to be technology and service neutral: licences and management rights issued under the regime are not restricted to a given technology or platform. As such, the Government considers that the regime itself currently presents no barriers to convergence.

Notwithstanding the compatibility of the existing spectrum management framework with convergence, the Government has identified two spectrum-related issues relating to competition regulation that do have convergence implications. The Government considers these issues can be best addressed as part of the ongoing review of the regulatory framework for telecommunications, discussed below.

Review of the framework for telecommunications

The establishment and operation of telecommunications networks within New Zealand is regulated under the Telecommunications Act 2001. The main purpose of the Act is to promote economic competition for the benefit of the end user.

The Government commenced a review of the Telecommunications Act 2001 in August 2013. This review is ongoing. The overriding objective of the review is to ensure that the Act continues to serve to promote competition, innovation and investment for the benefit of end users, in a way that is sufficiently flexible to cater to the ever changing digital environment.

The review will consider six broad issues with relevance to convergence:

  • New Zealand’s communications regulatory systems may need to change to address the reality of a converged sector, and to regulate consistently across networks and content;
  • our regulatory systems may be unable to cope with the pace of change in technology and markets (for example, in addressing new issues like net neutrality);
  • jurisdictional issues are arising due to the global nature of the internet, resulting in potentially inconsistent treatment of the same services;
  • communications regulation was designed for a different era and may not be fit for today’s competitive environment;
  • significant uncertainty has been generated from the operation of the telecommunications regulatory regime in recent years, and needs to be minimised; and
  • we need to maintain and build on competition in mobile markets.

With respect to convergence, the Government has identified several gaps and inconsistencies. These are:

  • The exclusion of broadcasting networks from the scope of the Act: The Act regulates all electronic communications network infrastructure and transmission services in New Zealand, except those relating to the broadcasting sector. This exclusion appears increasingly arbitrary, given the convergence of broadcasting and telecommunications more broadly.
  • Uncertainty relating to spectrum caps: Currently, the Government may set spectrum caps prior to a spectrum auction. This means that where a bidder wins spectrum that acquisition is subject to the Commerce Act and may require approval by the Commerce Commission. That approval may not be forthcoming, frustrating the intent of the Government’s auction. At present this process is not managed by legislation. The details of the new system are yet to be developed.
  • A need for more robust undertakings relating to use of radio spectrum: The Government believes there is a need for clearer and more robust tools to manage ongoing compliance with radio spectrum acquisition conditions by purchasers. At present this is not managed by legislation.

This review is being led by the Ministry of Business, Innovation and Employment. Consultation on the review is to be carried out shortly. Submissions can be sent to telcoreview@mbie.govt.nz or writing to:

Telecommunications Review Team
Communications Policy
Ministry of Business, Innovation & Employment
PO Box 1473
Wellington 6140
New Zealand

GST: Cross-border services, intangibles and goods

The collection of GST is provided for under the Goods and Services Tax Act 1985. When GST was introduced in 1986, New Zealand consumers purchased few services from offshore and online digital products were not yet available. The growth of e-commerce means the volume of services and intangibles on which GST is not collected is becoming increasingly significant. This raises the question of whether the existing tax rules will remain suitable and sustainable in the future. In particular, concerns have been raised about the impact that the uneven GST treatment may have on the competitiveness of domestic providers and on future tax revenues.

The Inland Revenue Department is consulting on the possible application of GST to cross-border supplies of services, intangibles and goods. The consultation document requests feedback on various proposals. This consultation period closes on 25 September 2015 and submissions can be sent to policy.webmaster@ird.govt.nz or writing to:

GST: Cross-border services, intangibles and goods
C/- Deputy Commissioner Policy and Strategy
Inland Revenue Department
PO Box 2198
Wellington 6140
New Zealand

Study of the creative sector use of the copyright and designs regimes

Connectedness to markets and weightless trade are particularly important for New Zealand given our physical location. The digital economy provides new opportunities for New Zealand firms to increase their weightless exports, and our intellectual property settings need to facilitate this.

The convergence of communications technologies is changing how the creative sector disseminates its products to consumers in New Zealand and abroad. Together with technological developments facilitating the creation, dissemination and consumption of creative works, this has lowered the entry barriers for people trying to provide their creative works to end users, enlarging the category of people who can effectively participate as creators or distributors. It has also posed new challenges for people seeking to protect the works they disseminate digitally. These opportunities and challenges are changing how the sector operates – including how creative works are created, disseminated, used, shared, protected and commercialised, as well as the contractual rules that govern their dissemination and use.

The Government accordingly considers it timely to study how copyright and designs are being used in the creative sector. How this use is impacted by convergence and the digital economy will be considered as part of the study. Information from the study would provide an evidence base to inform any future legislative reform.

The Ministry for Business, Innovation and Employment will lead the study, in consultation with the Ministry for Culture and Heritage. The primary focus will be on those creating and commercialising intellectual property.  It will aim to produce a narrative about the use of copyright and designs in the creative sector, and the print, film and television, music, software, gaming, and design industries alongside other industries that make up the creative sector.

Data Futures Partnership

The Data Futures Forum in 2014 highlighted some opportunities and challenges concerning our data future.  It saw huge opportunities for the reuse of government data and big data for analytics, and noted that value is increased when we also have inclusion, trust and greater control. Existing legislation and frameworks are being challenged as data collection increases and technology develops, but in the Forum’s view legislation needs to be flexible and light-handed to maintain relevance and support innovation.

In February 2015, the Government endorsed the principles of value, inclusion, trust and control as a foundation for data use in New Zealand, and in August 2015 agreed to establish a Data Futures Partnership. The Partnership is a cross-sector group of influential people working together to drive behavioural change across the data-use ecosystem and promote high-trust and high-value data use for all New Zealanders. Development of the Partnership proposal was led by the Treasury and Statistics New Zealand. Work is now turning to establishment and appointment of the Partnership. Members of the Partnership will be largely non-government and able to provide a useful outside-in perspective on relevant government programmes. The Partnership Working Group will report to the lead Ministers of Finance, Justice, and Statistics.


[1] http://www.oecd.org/sti/broadband/oecdbroadbandportal.htm

 

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