WEBVTT - Government considers phasing out telco obligations in sector review

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<v Speaker 1>I'm Chelsea Daniels and this is the Front Page, a

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<v Speaker 1>daily podcast presented by.

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<v Speaker 2>The New Zealand Herald.

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<v Speaker 1>For the past month, kiwis have been able to have

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<v Speaker 1>their say on proposals to change our telecommunications sector.

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<v Speaker 2>Minister for Regulation David Seymour.

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<v Speaker 1>Has said these services are as essential as power and water,

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<v Speaker 1>and that changing the way the sector is regulated will.

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<v Speaker 2>Affect almost every kiwi.

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<v Speaker 1>Changes could include introducing a consumer code, replacing or phasing

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<v Speaker 1>out current obligation frameworks, and getting rid of obsolete rules.

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<v Speaker 2>But what does all of that actually mean?

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<v Speaker 1>And do enough New Zealanders know how these changes could

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<v Speaker 1>affect our everyday lives. Today on the front Page, Tech

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<v Speaker 1>common Bill Bennett is with us to dive into the

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<v Speaker 1>recommendations and why consumers should care about how their connectivity

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<v Speaker 1>is regulated. First off, Bill, do you think the telecommunications

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<v Speaker 1>sector's regulatory framework is fit for purpose at the moment?

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<v Speaker 3>It's pretty good. I mean it's working. In terms of competition.

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<v Speaker 3>Our market is as competitive as any market could be.

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<v Speaker 3>Compare our telecommunications market. We save a supermarket sector and

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<v Speaker 3>it's intensely competitive. It's so competitive that the companies sometimes

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<v Speaker 3>winge that. You know, it's so competitive they can't make

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<v Speaker 3>as much profit as they might make, So from that

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<v Speaker 3>point of view, it's working. From the consumer point of view,

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<v Speaker 3>it's working too, because there's a lot of things in

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<v Speaker 3>place to protect consumers and keep consumers from being exploited.

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<v Speaker 3>So from all but from those points of view, it's

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<v Speaker 3>working quite well. There are some issues that probably need

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<v Speaker 3>to be addressed, and there's a regulatory review going on

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<v Speaker 3>right now which is going.

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<v Speaker 4>Over those issues.

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<v Speaker 3>One of the problems historically is that telecommunications, like anything

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<v Speaker 3>in technology, moves quite fast, and legislation doesn't tend to

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<v Speaker 3>move very fast. But u Zeeland we have something called

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<v Speaker 3>the Telecommunications Act, and I think the Telecommunications Act goes

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<v Speaker 3>back to two thousand and one. Since two thousand and one,

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<v Speaker 3>there's been thirteen amendments, so it's amended every couple of years,

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<v Speaker 3>and a lot of those amendments along the way have

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<v Speaker 3>been to update it. So it had a really big

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<v Speaker 3>amendment about five or six years ago to get ready

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<v Speaker 3>for the fiber regime. So there's a huge set of

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<v Speaker 3>new rules coming in for fiber. Fact, the last amendment

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<v Speaker 3>I think was in March this year, so it's not

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<v Speaker 3>like it's left to just you and get out of date.

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<v Speaker 2>Why are they fiddling with it then? If it's doing

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<v Speaker 2>all right well, I.

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<v Speaker 4>Think two things.

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<v Speaker 3>One is there's a bit of ideology in that the

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<v Speaker 3>government wants to cut down on the amount of regulations

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<v Speaker 3>there are, full stop. And it's a good place to

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<v Speaker 3>start because it's although it's a very complicated set of regulations,

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<v Speaker 3>as on, the industry is relatively simple.

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<v Speaker 4>It's only a.

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<v Speaker 3>Handful of big players, so it's relatively easy to deal with.

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<v Speaker 3>It's much easier to deal with that than some of

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<v Speaker 3>the tackling some of the harder things, like say supermarkets.

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<v Speaker 3>And the other thing is is there's some pressure from

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<v Speaker 3>inside the industry to reform some of the regulation, but

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<v Speaker 3>in general there's not a lot of push from inside

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<v Speaker 3>the sector to reform things.

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<v Speaker 2>What are the most significant recommendations do you think?

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<v Speaker 3>Well, at the review that's coming along at the moment,

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<v Speaker 3>they haven't got recommendations yet. They've just asked for input

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<v Speaker 3>from the industry and from various for the groups. I

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<v Speaker 3>think they're due to report this Thursday on that input

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<v Speaker 3>from the industry and from stakeholders. There's I don't think

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<v Speaker 3>there are actual recommendations at mom where there are topics

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<v Speaker 3>that they're looking at, and one of the things they're

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<v Speaker 3>looking at, for example, is whether the rules around fiber,

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<v Speaker 3>for example, are up to date. What they are, you know,

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<v Speaker 3>it pretty much is, but there are some there are

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<v Speaker 3>some kind of historic things in there that maybe we

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<v Speaker 3>don't need anymore, Like a lot of the rules that

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<v Speaker 3>are around to do with copper networks or the copper

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<v Speaker 3>networks are going out there. But by twenty thirty the

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<v Speaker 3>copper networks will be completely closed and we're down to

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<v Speaker 3>perhaps one hundred and twenty thousand people that are relying

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<v Speaker 3>on copy to day, which isn't very much in the

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<v Speaker 3>bigger scheme of things. So there's a lot of fussing

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<v Speaker 3>over things that no longer really apply. It's a bit

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<v Speaker 3>like the old thing with the London taxes having to

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<v Speaker 3>carry a bale of hay on the top of the

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<v Speaker 3>horses long after the horses are gone and the taxes

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<v Speaker 3>rulled cars.

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<v Speaker 1>Tell me what is the telecommunications service obligations and why

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<v Speaker 1>should it be phased out or replaced?

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<v Speaker 2>I know that that's something that they're looking at.

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<v Speaker 3>Yeah, look when when it's a historic thing. Telecom originally

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<v Speaker 3>was the post office, and it was government owned. It

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<v Speaker 3>was state controlled, and it was run as a public service,

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<v Speaker 3>and it had public service obligations. And some of the

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<v Speaker 3>things were like remote places would get a telephone box

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<v Speaker 3>and a telephone line and they didn't have to pay

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<v Speaker 3>more for it. So even if you were in the

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<v Speaker 3>middle of nowhere, you had some kind of telecommunications. The

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<v Speaker 3>industry was seen as it was you know, i'd go

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<v Speaker 3>back one hundred years. It was seen as a nation

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<v Speaker 3>building exercise to have all that in place, so that

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<v Speaker 3>you know, a cowcocky on a farm in the middle

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<v Speaker 3>of nowhere could ring home for the weekend or whatever

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<v Speaker 3>from a coin box. Then around about the late eighties

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<v Speaker 3>it got privatized. Telecom got privatized and it got bought

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<v Speaker 3>out by at the time some overseas interests, and the

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<v Speaker 3>obligations were put in place so that the things that

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<v Speaker 3>had been social goods that were around forever until then

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<v Speaker 3>continued after privatization and then when competitors came in that

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<v Speaker 3>the idea was the things that keep happening, and some

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<v Speaker 3>of those things are still important today, like one one

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<v Speaker 3>one calling, for example, is part of that, and there's

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<v Speaker 3>a service for it's a relay service for people that

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<v Speaker 3>are hard of hearing, so that you don't need to

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<v Speaker 3>listen to.

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<v Speaker 4>A voice call.

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<v Speaker 3>There are other ways of getting the information for those people,

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<v Speaker 3>and that's all paid for by the government, but it

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<v Speaker 3>has to be provided by the industry. So what we're

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<v Speaker 3>what the TSO is really all about. It's about getting

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<v Speaker 3>private companies to continue those services, and there's money for that,

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<v Speaker 3>some government money, and some of it comes from a

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<v Speaker 3>levee which is charged on the industry, and the industry

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<v Speaker 3>currently pays ten million dollars a year. The amount of

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<v Speaker 3>the company pays is based on how much money they make,

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<v Speaker 3>so Spark would pay the most, and I think Corus

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<v Speaker 3>pays the second most. Then it's one and two degrees

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<v Speaker 3>and so on, and those four companies probably pay about

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<v Speaker 3>ninety eighty five ninety percent of the levy, and all

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<v Speaker 3>the smaller ones to pay a small amount. But the

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<v Speaker 3>money that comes in from that is used to do

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<v Speaker 3>things like subsidized rural calling, subsidized services that are necessary, and.

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<v Speaker 4>That's really what it's about.

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<v Speaker 3>The thing is is that it was essential when telecom

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<v Speaker 3>was privatized for those things to carry on. It's not

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<v Speaker 3>so important today when you've got mobile phones and satellite

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<v Speaker 3>communications in remote places and so on, and alternative options.

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<v Speaker 4>But there's a there's a second area of concern, and.

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<v Speaker 3>It's what's called the digital divide, as a divide between

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<v Speaker 3>rich p and poor people. And poor people have difficulty

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<v Speaker 3>paying for some of these services, and they certainly have

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<v Speaker 3>difficulty paying for things like computers and so on to

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<v Speaker 3>use digital services. But there's also a rural digital divide

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<v Speaker 3>that is that services don't reach everywhere. The fiber network

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<v Speaker 3>goes to eighty seven percent of the country, but that

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<v Speaker 3>leaves thirteen percent which is off the fiber network, and

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<v Speaker 3>some of those people are still dependent on copper lines,

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<v Speaker 3>and that's kind of got to be looked after.

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<v Speaker 4>Buy everyone.

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<v Speaker 3>It's a sort of society problem, not an industry problem, and.

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<v Speaker 4>That's what it's about.

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<v Speaker 3>And it's as you say, it's likely to be phased out,

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<v Speaker 3>given that we're moving to a world where everyone everything's

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<v Speaker 3>on mobile, the copper network's gone, and if you're really

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<v Speaker 3>stuck out in the whats you can use satellite.

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<v Speaker 1>So is there a fear though that if we get

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<v Speaker 1>rid of all of the rules and regulations, that's say,

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<v Speaker 1>a town with a population of ten could be left

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<v Speaker 1>out and left off the map because they're not then

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<v Speaker 1>you know, seen as profitable for those big companies to

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<v Speaker 1>install those networks.

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<v Speaker 4>Yeah, yeah, that's absolutely right.

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<v Speaker 3>And but back in the day of when it was

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<v Speaker 3>a public service, public service. I talked to the people

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<v Speaker 3>who ran Telecom back in the eighties. I've been around

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<v Speaker 3>this business for a long time, and I remember someone

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<v Speaker 3>telling me that there was a phone line to the

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<v Speaker 3>Wronger Wrong a lodge which is right at the bottom

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<v Speaker 3>of the wire rapper on the coast, and it was

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<v Speaker 3>the longest single stretch of copper copper wiring in the

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<v Speaker 3>network at the times. The head of Telecom the time

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<v Speaker 3>told me that it costs literally costs millions every year

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<v Speaker 3>for that line to exist. But that was being subsidized

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<v Speaker 3>by all the people in Karori in places like that

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<v Speaker 3>where you know where they live next to each other

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<v Speaker 3>and right close to an exchange and it costs nothing

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<v Speaker 3>to connect their lines, So that that kind of cross

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<v Speaker 3>substy was there, and it's not there in a commercial era.

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<v Speaker 3>That's that would be true, excepted is there in some

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<v Speaker 3>ways because the fiber network build has been subsidized and

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<v Speaker 3>the fiber network going into rural towns has been paid

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<v Speaker 3>for by various government projects over the years. During the lockdowns,

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<v Speaker 3>there was a big rural development budget was a lot

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<v Speaker 3>of that money was spent on sending viber into those

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<v Speaker 3>regional areas.

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<v Speaker 1>If we don't have those kind of obligations in place, though,

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<v Speaker 1>do we run the risk of, you know, having some

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<v Speaker 1>towns and some people who live rurally just cut off

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<v Speaker 1>the map. I mean, I know that three G is

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<v Speaker 1>being phased out, and I don't know if you've tried

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<v Speaker 1>to drive the length of the country, but there are

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<v Speaker 1>definitely some pretty large dark spots in between there we

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<v Speaker 1>can't get internet absolutely.

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<v Speaker 3>And again some of that TDL money, that levee money

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<v Speaker 3>has been spent on something called the Rural Connectivity Group,

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<v Speaker 3>which is it's basically the three main tailcoats that Spark

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<v Speaker 3>two degrees and one in a joint venture and they

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<v Speaker 3>built town was along remote roads and Chorus puts fiber

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<v Speaker 3>between some of the tech Most of the towers have

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<v Speaker 3>fiber to them and it goes to place. It's like

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<v Speaker 3>Milford Sound. There's there's a fiber now that goes into

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<v Speaker 3>Milford Sound and there's there's phone towls all along that road,

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<v Speaker 3>you know, and that's a pretty remote road. But we're

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<v Speaker 3>not there with one hundred percent coverage for sure, but

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<v Speaker 3>we improved, it's massively improved, and that those builds are

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<v Speaker 3>generally paid for by governments or by the.

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<v Speaker 4>Row from the levee.

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<v Speaker 5>At the end of last year, Octas was here with

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<v Speaker 5>a twelve million dollar fine over people not being able.

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<v Speaker 4>To connect to triple zero.

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<v Speaker 5>Now it has happened again, and only this time at

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<v Speaker 5>least three people have died. What is next, brobdis If

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<v Speaker 5>your network fails on a triple zero call, your phone

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<v Speaker 5>is meant to switch over to a different network to

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<v Speaker 5>get through. This is a mechanism Intelgoes must have in

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<v Speaker 5>place as for this act. And in this instance it's

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<v Speaker 5>clear that even the backup plans failed. Customers warning signs

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<v Speaker 5>were there in twenty twenty three, and now Australia's Communications

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<v Speaker 5>Minister says the telco giant will face significant consequences.

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<v Speaker 1>Now we've seen in Australia recently exactly how reliant we

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<v Speaker 1>are on our telco sectors. Australian officials have promised that

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<v Speaker 1>Optus will face significant consequences over a system's outage and

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<v Speaker 1>it's linked to multiple deaths. The incident left hundreds of

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<v Speaker 1>people across more than half of the country unable to

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<v Speaker 1>call emergency services for thirteen hours.

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<v Speaker 2>At least three people died as a result. Could something

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<v Speaker 2>similar happen here?

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<v Speaker 3>Yes, but no, And by that I mean it's complicated.

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<v Speaker 3>But look, when cyclone Gabrielle came through, people were cut

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<v Speaker 3>off for a long periods of time. The networks are

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<v Speaker 3>quite resilient, but they're not resilient enough, and Gabrielle exposed that.

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<v Speaker 3>Up until Gabrielle, we thought that if you had a

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<v Speaker 3>handful of cables going into an area like I think

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<v Speaker 3>it's Hawk's Bay that was worst affected towns like Wairoa

0:13:09.840 --> 0:13:13.280
<v Speaker 3>in Hawks Bay, they had a handful of lines going

0:13:13.280 --> 0:13:16.720
<v Speaker 3>into those places, but the lines went across bridges and

0:13:16.760 --> 0:13:19.280
<v Speaker 3>the bridges were wiped out and a couple of lines,

0:13:19.320 --> 0:13:21.959
<v Speaker 3>And it turns out that having tours three lines in

0:13:22.080 --> 0:13:22.600
<v Speaker 3>isn't enough.

0:13:22.640 --> 0:13:23.280
<v Speaker 4>You need more.

0:13:23.920 --> 0:13:27.000
<v Speaker 3>So we're building resilience into the network and we've been

0:13:27.040 --> 0:13:28.960
<v Speaker 3>doing a lot of work on that since Gabrielle and

0:13:28.960 --> 0:13:31.320
<v Speaker 3>Gabrielle's it was quite a wake up call for that.

0:13:31.880 --> 0:13:35.160
<v Speaker 3>But the other thing is is that increasingly we can

0:13:35.240 --> 0:13:38.280
<v Speaker 3>use satellites to go around that as well. So if

0:13:38.520 --> 0:13:40.839
<v Speaker 3>an area if part of the country's cut off because

0:13:40.920 --> 0:13:44.760
<v Speaker 3>the main links are down, satellite can fill in the gaps.

0:13:44.760 --> 0:13:50.400
<v Speaker 3>And you probably won't be able to stream Netflix in

0:13:50.480 --> 0:13:53.640
<v Speaker 3>high definition if you're in one of those areas time,

0:13:53.679 --> 0:13:55.120
<v Speaker 3>but you will be able to make voice calls, and

0:13:55.160 --> 0:13:57.840
<v Speaker 3>you will be able to make basic email calls and

0:13:57.880 --> 0:14:01.880
<v Speaker 3>send text messages and on. So it's less likely in

0:14:01.920 --> 0:14:04.400
<v Speaker 3>New Zealand because we do have more resilience. But the

0:14:04.520 --> 0:14:09.320
<v Speaker 3>interesting thing about that Australian episode was that the answer

0:14:09.320 --> 0:14:10.960
<v Speaker 3>to it, the government sees the answer to it, and

0:14:11.000 --> 0:14:14.800
<v Speaker 3>the industry sees the answer to that as fixing the regulations,

0:14:14.960 --> 0:14:16.520
<v Speaker 3>which is back to what we were talking about in

0:14:16.559 --> 0:14:19.240
<v Speaker 3>the first place, about those regular all those regulations that

0:14:19.240 --> 0:14:21.240
<v Speaker 3>they're in place for a purpose. They're not there just

0:14:21.640 --> 0:14:24.880
<v Speaker 3>because you know, pureaucrats enjoy imposing rules on the industry.

0:14:25.120 --> 0:14:25.320
<v Speaker 2>Right.

0:14:25.400 --> 0:14:29.760
<v Speaker 1>So if the Australia is looking at more regulations and

0:14:29.840 --> 0:14:31.960
<v Speaker 1>we're looking at scaling them.

0:14:31.840 --> 0:14:36.120
<v Speaker 3>Back, yes, yes, there's an element of truth in that.

0:14:36.640 --> 0:14:40.160
<v Speaker 3>We've probably my guess is is that the review is

0:14:40.320 --> 0:14:43.160
<v Speaker 3>not going to scale them back that much. There'll be

0:14:43.200 --> 0:14:45.520
<v Speaker 3>some tinkering, There'll be some things that go. There's probably

0:14:45.560 --> 0:14:47.720
<v Speaker 3>a couple of things which are past their cell by date,

0:14:48.200 --> 0:14:51.000
<v Speaker 3>like the rules around copper and so on. But in general,

0:14:51.280 --> 0:14:54.960
<v Speaker 3>I think we have and it's widely understood and even

0:14:55.040 --> 0:14:58.040
<v Speaker 3>within the industry it's widely understood. We have actually very

0:14:58.080 --> 0:14:59.920
<v Speaker 3>good regulations in this area.

0:15:00.200 --> 0:15:02.760
<v Speaker 1>In terms of I mean you see something like the

0:15:03.000 --> 0:15:07.480
<v Speaker 1>you know, have your say for the Telecommunications sector regulate

0:15:07.720 --> 0:15:10.680
<v Speaker 1>regulatory framework and your every day key, we would just

0:15:10.680 --> 0:15:12.600
<v Speaker 1>look at that and turn the page.

0:15:12.320 --> 0:15:16.160
<v Speaker 2>Right, Why should every day key we care about this?

0:15:16.840 --> 0:15:20.200
<v Speaker 4>There are people that are organized to do that. So,

0:15:20.320 --> 0:15:24.400
<v Speaker 4>for example, in rural areas, there are groups that lobby

0:15:24.560 --> 0:15:26.560
<v Speaker 4>for rural telecommunications.

0:15:26.640 --> 0:15:29.720
<v Speaker 3>I was that there's a Connecting a Toroa summit which

0:15:29.800 --> 0:15:32.080
<v Speaker 3>was in Hamilton earlier this year, which was run by

0:15:32.080 --> 0:15:34.800
<v Speaker 3>two ants now two ants is that is used to

0:15:34.840 --> 0:15:38.400
<v Speaker 3>be the Telecommunications Users Group of New Zealander, but it's

0:15:38.400 --> 0:15:43.040
<v Speaker 3>now the Technology Users of New Zealand. They advocate on

0:15:43.160 --> 0:15:46.720
<v Speaker 3>behalf of users and they would and so they were

0:15:46.800 --> 0:15:49.720
<v Speaker 3>put in submissions to things like that, but also things

0:15:49.760 --> 0:15:53.359
<v Speaker 3>like the Young Rural Doctors would put in a submission

0:15:53.560 --> 0:15:57.200
<v Speaker 3>and Federated Farmers would put in, you know, put in submissions,

0:15:57.280 --> 0:16:00.800
<v Speaker 3>and there are rural women's groups and so on which

0:16:01.080 --> 0:16:05.560
<v Speaker 3>submit so you so rather than having to read this

0:16:05.600 --> 0:16:08.960
<v Speaker 3>stuff yourself and get on top of what can be

0:16:09.080 --> 0:16:12.880
<v Speaker 3>quite complicated sets of rules and so on, you know,

0:16:13.000 --> 0:16:15.360
<v Speaker 3>go and talk to your Go and talk to one

0:16:15.400 --> 0:16:17.400
<v Speaker 3>of those organizations that would represent you.

0:16:17.840 --> 0:16:20.200
<v Speaker 2>Thanks for joining us, Bill, You're welcome.

0:16:24.160 --> 0:16:27.360
<v Speaker 1>That's it for this episode of the Front Page. You

0:16:27.400 --> 0:16:31.280
<v Speaker 1>can read more about today's stories and extensive news coverage

0:16:31.320 --> 0:16:35.400
<v Speaker 1>at NZDHERLD, dot co dot MZ. The Front Page is

0:16:35.480 --> 0:16:38.880
<v Speaker 1>produced by Jane Ye and Richard Martin, who is also

0:16:39.080 --> 0:16:43.560
<v Speaker 1>our editor. I'm Chelsea Daniels. Subscribe to the Front Page

0:16:43.600 --> 0:16:45.760
<v Speaker 1>on iHeartRadio or wherever you get your.

0:16:45.640 --> 0:16:50.280
<v Speaker 2>Podcasts, and tune in tomorrow for another look behind the headlines.

0:17:00.080 --> 0:17:00.240
<v Speaker 3>Yeah,