Abstract:
Between 2000 and 2011, changes in government policy significantly increased the
role of the state in telecommunications markets in New Zealand. In both regulatory
and investment activities, the historic approach of liberal market regulation was
transformed into active intervention. This changed approach aimed at speeding
access to high-speed broadband services. There was a remarkable lack of political
debate between the major political parties as to the objective being sought, or
direction of policy towards greater intervention in order to achieve it.
This research outlines in broad terms the background to the debates underpinning
policy change, and the history of New Zealand’s approach. It outlines in detail the
key policy changes made. In the regulatory domain, four key changes are discussed.
These are: the implementation of sector-specific legislation (Telecommunications
Act 2001); the decision not to unbundle the copper local loop (2004); amendments to
the Telecommunications Act strengthening the regulator and imposing ‘operational
separation’ of Telecom (2006); and the ‘structural separation’ of Telecom and the
debate on regulatory forbearance (2011). By the end of the case period, these
changes meant that generic competition law had been replaced by sector-specific
legislation, a specialist regulator with broad powers to monitor and regulate the
industry, and a leading solution to discrimination issues with the complete ownership
separation of network and services in copper and fibre-optic telecommunications
networks.
In the investment domain, five key stages are discussed. These are: Project PROBE
(2001-4), the Broadband Challenge (2005), the Broadband Investment Fund (2008),
the Ultra-Fast Broadband Initiative (2009) and the Rural Broadband Initiative
(2009). Together these saw public spending on telecommunications infrastructure
rise from nothing in 2000, to a combined package in the two final (and current)
initiatives of around $1.6bn of public funds. This money combines with private
investment to deliver fibre-optic broadband infrastructure to three-quarters of homes,
and significant improvements to the availability of higher-speed broadband in rural
and remote parts of New Zealand. Increasing levels of government intervention in these markets was an opportunity for
considerable political contest. Instead the case period 2000-2011 is characterised by
similarities rather than differences between National and Labour. The thesis
suggests that an explanation for this similarity arose from the perceived importance
of high-speed broadband infrastructure for New Zealand’s economic prospects, and a
shared analysis by Labour and National that market provision would not suffice.
This imperative defeated temptations to politicise the project.
