A BRIEF LOOK AT OF LEADING CHANGE 1987 - 1993

1994 - 1998

1999 - 2016

2016 - present

2 I TUANZ – A brief look at 30 years of leading change In the world of technology, a year can sometimes be a very long time, let alone thirty years. But that’s exactly how long our organisation has been around. Over that time we’ve seen monumental changes in the telecommunications services that we use - starting from those early days of low speed digital services, to today’s ultra fast speeds over fibre. We’ve become mobile and now we’re heavily dependent on those wirelessly connected devices in all aspects of our lives, as well as in our businesses. Over those years of tremendous change, TUANZ has been a constant. Our organisation has continued to keep us connected and educated on the new tech and the issues of the day. We’ve been a constant advocate on behalf of users and continued to represent our members views all the way through. In this history we have not tried to be comprehensive. It would have been impossible to speak to all that have been involved over the years, but we’ve tried to give you a picture of what has happened over that time through the eyes of some of the key players. It shows how our story is a key part of the development of the tele- communications sector and how we’ve been involved every step of the way. I hope you enjoy reading about the last 30 years. It’s still an exciting time to be involved and I commend the future of TUANZ to you.

Pat O’Connell, Chair

TUANZ – A brief look at 30 years of leading change I 3 ‘Light handed regulation’, privatisation, court battles, billion dollar document leaks, media battles and re-regulation: ’s telecommunications sector has seen it all. We take a brief look back over the past 30 years of change and see how the story of TUANZ is inexplicably interlinked with that of the sector.

4 I TUANZ – A brief look at 30 years of leading change THE BEGINNING OF A USER GROUP WHO BECAME LOBBYISTS

“One must remember than New Zealand was a very different country,” “NEW ZEALAND WAS says Don Wallace of New Zealand – FORTRESS NEW not in the 1800s, but in 1985. ZEALAND. IF SOMETHING WAS MANUFACTURED IN At the time Wallace was looking after NEW ZEALAND, IT data customers for the New Zealand COULDN’T BE IMPORTED” Post Office, which had ‘an absolute – and government – monopoly’ on the DON WALLACE telecommunications market in New Zealand, as it had for 100 years. “New Zealand was Fortress New Zealand. If something was manufactured in New It was against that backdrop that Zealand, it couldn’t be imported,” TUANZ was born. Wallace recalls. The organisation had its genesis Not only was telecommunications at a Computer Society meeting in technology a different world - September 1985, when it was decided multidrop circuits were 2400 bits per that a telecommunications association second, while high speed circuits could ‘of some kind’ was needed. Wallace, hit 14,400 bits per second versus who attended that early meeting, says the 100Mb/s capability of UFB, or the idea behind the association was the 1 Gigabit being utilised by some that it would provide an opportunity for businesses these days – but so too was people using Post Office data services the business of telecommunications. to get together and learn from each Wallace recalls the Wanganui Computer other rather than it being a lobby group Centre – a database established in 1976 - something they saw no need for at for the New Zealand Police, Justice and the time. Land Transport Safety Authority. “It was very much a users’ group in a “We had it there because it was similar sense to the Burroughs User a marginal electorate. It was the Group and the IBM User Group,” worst place possible to put an online Wallace says. computer centre because the Post Office network going to Wanganui was The first AGM was held on February 26, as thin as thin could be. 1986, establishing a constitution for the association and its name, and on “And when a farmer came along and March 20th, 1987, TUANZ was officially ploughed up his field and the cable, the incorporated. Terry Ballard was the first whole of New Zealand lost its police, chairperson – yes, person, because in justice and LTSA.” what was a fairly radical step in those

TUANZ – A brief look at 30 years of leading change I 5 days, TUANZ had decided to be gender “We wanted to make sure that what the neutral with its titles – with Wallace users got out of all this was something as vice chairperson, and for the first they wanted,” Wallace says. year TUANZ was all about education, running seminars and holding meeting “We were quite keen on the idea of for users. there being competition. “Telecom was not as keen on the idea of there being But changes were sweeping competition,” he adds dryly. “And the New Zealand in general, and government was somewhere in telecommunications was among a the middle.” number of industries about to undergo big changes. In 1984, the Labour In 1989, in a world first, the New Government, under David Lange and Zealand telecommunications market in the age of Rogernomics, had begun was completely deregulated ending the a period of reforms and from 1986 monopoly and opening the doors for corporatisation and privatisation – new competition. along with a more hands-off approach and an emphasis on efficiency and The first of the competitors arrived profitability – was the order of the day. in 1990 in the form of the Alternative Telephone Company – better known to most by its later name, Clear IN 1989, IN A WORLD FIRST, THE Communications. NEW ZEALAND TELECOMMUNICATIONS The same year, Telecom was privatised MARKET WAS COMPLETELY with Ameritech, Bell Atlantic, Faye Richwhite and Freightways buying it DEREGULATED ENDING THE MONOPOLY for NZ$4.25 billion in what was the AND OPENING THE DOORS FOR NEW biggest business deal seen in New Zealand. Critical to this deal was a COMPETITION. contract between the government and Telecom, the Kiwi Share agreement, The State-Owned Enterprises Act 1986, was drawn up requiring free local phone which came into effect on 01 April calls as part of a fixed monthly phone 1987, saw the rental to ‘enable the Government split into three businesses and Telecom to meet its social objectives in Corporation of New Zealand created. telecommunications’ – and to allay Telecom acquired the assets of the concerns which might arise from users New Zealand Post Office and a new – about the privatisation of the company commercial – business was born. and its subsequent sale to international investors. TUANZ were suddenly thrust into the role of lobbyists as Telecom jostled For Telecom and the New Zealand to establish its stake in the market as telecommunications market in general, deregulation loomed. a new era was starting.

6 I TUANZ – A brief look at 30 years of leading change WELCOME TO THE AGE OF ‘LIGHT HANDED REGULATION’ - AND SOME EARLY COMPETITION

When the phrase ‘light handed handed regulation saw the telco sector regulation’ is used by those in New relying on the generic Commerce Act Zealand telecommunications it’s often to control any potentially monopolistic accompanied by a certain wariness or behaviour.The Act prohibits the use of a even a grimace. dominant position for anti-competitive purposes. “That’s quite a hard test in For many, it signals a time of monopoly any court of law,” Don Wallace, Chair of control of the market and government TUANZ at the time, notes. inaction. It was, nevertheless, one that would The early 1990s was the era when the quickly be put to the test. New Zealand Government was taking a hands off approach to regulation in By late 1989, calls were already being the sector. made for the Commerce Commission to investigate Telecom, with claims Many other countries provided statu- the telco was using anti-competitive tory rights of interconnection, ensuring measures after it had dramatically that new carriers are able to intercon- increased the cost of its Megaplan two nect with the incumbent provider’s net- megabit per second ISDN services, works to enable customers of one net- which other providers had been renting work to make calls to those on another off Telecom, subdividing and onselling. network. However New Zealand’s light The price increases changed the

1989 TUANZ executive

Back row: Murray Young, (Secretary) Alex McFarlane, Peter McKenzie, Don Wallace (Vice Chairman), Nicholas Egerton, Graham Griffiths, Bill Smith and Peter Cooke(Treasurer) . Middle row: Sally Motion (Administration) and Patricia Greis Kerr (Business Manager) both part time, based at Ernst & Whinney. Front: Terry Ballard

TUANZ – A brief look at 30 years of leading change I 7 1991 Conference - note the high speed on offer. economics of the business dramatically Jack Matthews who from 1995 was CEO for resellers and those selling the of Saturn Communications and then Tel- multiplexes to enable the circuits to straSaturn, remembers the telco sector be subdivided. of the mid-90s as ‘really the wild west with no competition regulation at all’. In what was to be the first of many legal battles in the sector, in 1991 Without regulation, he says there was the Commerce Commission began ‘very limited’ competition. “There was proceedings against Telecom alleging a view expressed to me by a senior that in raising these costs during minister that Telecom was such an 1988 and 1989, the company had important part of the New Zealand contravened section 36 of the economy that ‘what was good for Commerce Act. The slow turning of Telecom was good for New Zealand’,” the wheels of justice, however, meant Matthews says. that four years later the Commerce Commission withdrew the action after “I’m not criticising Telecom – they concluding that the time and costs simply behaved in a way that was most involved in pursuing the case to a advantageous to their shareholders,” conclusion would be greater than any he adds. But while the lack of benefits achieved, and that the case by competition created some competitive then had little relevance to the industry. challenges, Matthews says it also enabled Saturn to ‘do things that would However, Wallace defines the taking of have been more difficult in more highly action by the Commerce Commission regulated markets’. as ‘one of the seminal steps along the process of trying to define what was “The key challenge for us was to find monopolistic behaviour’. competitive strategies that took advantage of the environment, rather In the 1992 Report on Telecommunica- than use litigation as a strategy as some tions, the Commission noted: ‘Telecom others were doing.” makes the rules and other parties in the industry, by and large, play by them’. In “This lead us to a strategy of bundling what would become an ongoing theme voice, video and data on a single for the sector, the Commission’s en- network and billing system. It also quiries conclusions were subsequently made us focus on developing a brand ruled to be beyond its remit. that took advantage of our underdog position in the market.”

8 I TUANZ – A brief look at 30 years of leading change DEBATES OVER INVESTMENT AS COMPETITION MAKES LITTLE HEADWAY

Ask Roderick Deane what the defining But while Clear may have lead the early moments were in his 14 years at charge, others were also entering the Telecom – stretching from 1992 to market, including Kapiti Coast’s Kiwi 2006 – and it’s the technological Cable Company, which later became changes he pinpoints, rather than Saturn Communications and joined legislative or regulatory issues. forces with to become TelstraSaturn. “The defining moments were when mobile emerged, when it became By 1993 competition was emerging apparent mobile was going to become on the mobile front too, with BellSouth a big force, in fact the biggest force; launching. By the mid-90s, nearly 30 and when the internet emerged,” companies were fighting it out in the Deane says. New Zealand telecommunications market. “And as new competitors emerged,” he adds. “For the 14 years I was there, the For TUANZ, increased competition, big issues were around competition, while much wanted and lobbied for, mobile and internet, and regulation brought its own challenges. was a significant issue but not the overriding one.” Grant Forsysth, who took on the role of TUANZ executive director in 1993, says Appointed chief executive of Telecom the increased competition brought with in 1992 at a time when directors were it challenges for TUANZ’ user communi- unhappy with the progress of the share ty, who faced a growing set of choices. price and the pace of reforms within the company, Deane was charged with “Much of TUANZ’ role was to assist accelerating that process in the face of business users with understanding and emerging competition – in particular making the right choice,” Forsysth says. from . “We held regular events, published Clear entered the market with the information and held a large annual intention of creating a nationwide conference and exhibition that took network using fibre optic cables along over the whole of the Ellerslie Race New Zealand’s railway lines, courtesy of Course conference centre. New Zealand Rail, to provide tolls and data services. “THE INCREASED Ultimately, it set its sights on the local COMPETITION BROUGHT market and a long running inter- WITH IT CHALLENGES connection dispute with Telecom – FOR TUANZ’ USER which reportedly cost around $8 million COMMUNITY, WHO in fees and went all the way to London’s FACED A GROWING Privy Council where it was ruled that SET OF CHOICES” there hadn’t been use of its dominant position by Telecom to stifle Clear – GRANT FORSYTH became a feature of the New Zealand telecomm-unications scene for six long years.

TUANZ – A brief look at 30 years of leading change I 9 coaxial network in parts of for a proposed – but ultimately abandoned – cable television service, First Media. Come the late 90s, Telecom moved its focus to ‘high speed’ internet in the form of ADSL. While ultimately unsuitable for its First Media project, ADSL, branded as Jetstream, would become a mainstay for the company’s internet access offerings. The company also became part of the Southern Cross Cable consortium, which was laying a fibre optic cable between Australia and New Zealand and the United States. Not all of Telecom’s technology investments were successful, however. The company’s early foray into mobile saw it backing TDMA, while BellSouth was backing GSM. Telecom’s move was, says former Tele- “We also had fun hosting the best com CIO Mark Ratcliffe ‘a logical option awards black tie dinner with great to take, but it happened to be the wrong guest presenters. It was always a sell one’. Much like the VHS versus Betamax out and much looked forward to by videotape format war, GSM would ulti- the industry.” mately win the mobile network war.

Rod Deane says a key focus for Telecom, says Ratcliffe, ‘got themselves Telecom, given the earlier deregulation in trouble having a network for which and the subsequent encouraging of people weren’t manufacturing handsets competition, became how to become at a time when handsets became really, more competitive. “To do that we had really important’. to not only get our cost structure down, As the person who would ultimately but we had to really try and enter the become responsible for the copper modern world in terms of upgrading network as CEO of Chorus, Ratcliffe our own infrastructure and technology,” says while organisations like TUANZ he says. were publically pushing the line that “It’s easy to forget now what a huge Telecom underinvested in the network undertaking that was. There were many for years ‘it is hard to know if that was years when Telecom was the largest or wasn’t true’. “It certainly didn’t feel capital expenditure company in New like it when we were there,” he says. Zealand after the government. “And we’re a large, sparsely populated In 1996 internet demand – and pricing country. It’s really hard to upgrade the pressures in traditional markets most outlying parts of the infrastructure. where Telecom now had burgeoning There’s no economic rationale for competition from multiple companies doing it.” such as iHug and CLEAR– saw Telecom However, if rationale was required, it launch its own internet service provider, would soon be coming in the form of Xtra. The same year, the company government action. began constructing a hybrid fibre-

10 I TUANZ – A brief look at 30 years of leading change IT’S JUST NOT WORKING

By the late 1990s, TUANZ along with He told the industry it had until late many other players in the industry felt 1999 to come up with a solution to it was clear that New Zealand’s number portability, or he would pioneering hands-off deregulation of regulate. It was the start of extensive – the industry wasn’t working. and often heated – discussion between New Zealand’s telcos with number Ernie Newman recalls that when he portability introduced in April 2007, took up the role of TUANZ chief following a ruling by the Commerce executive in January 1999 TUANZ Commission. wasn’t making much progress on the regulatory front. Much to Telecom By then, the government had changed, boss Roderick Deane’s annoyance, it with Labour coming to power in 1999, would become a key focus for the and Paul Swain was Communications industry body. Minister. It heralded ‘a total change in the paradigm’ Newman says. “It took about a year before we actually managed to get onto the agenda of public awareness the notion that all was not well with telecommunications in ONCE WE ESTABLISHED AWARENESS THAT ALL New Zealand,” Newman says. “Once we WAS NOT WELL WITH established that, everything took off TELECOMMUNICATIONS from that point.” IN NEW ZEALAND, It would be a period of high activity for EVERYTHING TOOK OFF. TUANZ, with on average, one major campaign a year including number ERNIE NEWMAN portability, the wholesale access regime – the requirement that Telecom sell its services to competitors at regulated Pre-election, TUANZ had lobbied Swain prices – local loop unbundling, mobile about the need for fundamental change colocation, mobile roaming and mobile and in its election manifesto Labour termination rates. promised an inquiry into the telecomm- unications regulatory framework. A key catalyst in driving awareness of the issues within telecommunications True to his word, in 2000 Swain sector to a wider audience was number commissioned the Fletcher enquiry, portability. Something taken for granted which ultimately lead to industry- today, it was a sore point in the late specific regulation in the form of the 1990s, when moving carriers meant Telecomm-unications Act 2001 and the changing phone numbers. For creation of the role of Telecomm- businesses in particular it was a huge unications Commissioner. A process barrier to changing telco provider and was also included in the Act to establish for consumers it tended to lock you into whether or not a service should be one mobile provider. regulated. Number portability was, Newman says, Newman dubs the Fletcher enquiry ‘the first issue that [Communications ‘probably the single biggest turning Minister] Maurice Williamson took point’ in New Zealand seriously’. telecommunications.

TUANZ – A brief look at 30 years of leading change I 11 “That was the point at which the broadband and internet access. establishment could no longer turn its “It was in that area particularly where a back on the concept of regulation. range of different plans, speeds, data It was forced to recognise that in the caps and so forth of a competitive modern world, network industries need nature, was emerging.” some kind of regulatory oversight,” he says. In 2004 Associate Information Technology Minister David Cunliffe “What Hugh Fletcher and his team did released a draft Digital Strategy, was expose the fallacy of [the argument proposing new ‘bold’ directions for ICT that regulation was for the left wing and in New Zealand – and the Government’s competition would emerge by natural ICT investments. Noting that we live in forces if the government stayed out of a time of ‘rapid and unparalleled’ the way] and demonstrated where technological change, Cunliffe said the there is a network industry where every strategy was about enabling all New player has to share a degree of Zealanders to realise the benefits that common systems and interfaces, change offered. Broadband was a key competition requires regulatory focus for the strategy. intervention in order to emerge. The industry has never looked back since A 2005 Government review of the sec- then,” he says. tor also focused on the broadband mar- ket and highlighted concerns at a lack An early area of focus under the new of improvement in New Zealand’s per- regime was addressing the ongoing formance in the OECD in regards to interconnection disputes. broadband penetration. The review also Interconnection charges became suggested there was a lack of effective regulated and ‘there started to be some competition in the telecommunications kind of level playing field’, Newman market which ultimately lead to amend- says. “We were also starting to see a ments in 2006 to the Telecommunica- viable business model for the next level of operator, so companies like CallPlus started to become significant players. “All of a sudden, competition between smaller and bigger operators was possible.” For end users too, the new act brought changes on the fixed line front, as providers jostled for attention with specials and new choices in plans. “Telecommunications all of a sudden became a product where you would see specials and a bit of discounting and some choices in terms of plans and so on,” Newman says. “Remember that while this was going on, the internet was really starting to blossom too and the telecommunications industry that for most people had been about voice calls all of a sudden became about

12 I TUANZ – A brief look at 30 years of leading change Paul Swain and team. Including TUANZ Chair, Judy Speight. tions Act, giving greater power to the the conclusion seemed so out of sync Commerce Commission for regulating with the rest of the report. The late- the sector including introducing unbun- 2003 report sparked one of TUANZ’ dled local loop as a regulated service. most successful campaigns, he says. Local loop unbundling was happening “Once we picked ourselves up off the across Europe, notes Newman. “It had floor, we started a massive campaign to actually reached a point where the only get right around parliament.” two countries in the OECD that hadn’t unbundled the local loop were New The campaign included the publication Zealand and Mexico.” of a booklet titled ‘Why Paul Swain Should Ignore the Commerce Newman recalls only too clearly the Commission Report and Unbundle’, release of a long awaited report from which was sent to every MP and every the Commerce Commission on opinion leader TUANZ could reach. “A the topic. few weeks later, Swain announced he was rejecting the Commission’s “It was released, and I was flipping recommendation and the local loop through this thing and everything was would be unbundled,” Newman says. pointing to yes, we’re going to recommend unbundling, until we got to The joy was shortlived however, with the last page and it said ‘we the decision over-ruled. It would be two recommend you not unbundle’. “The more years before unbundling would be conclusion was completely at odds with given the green light – in a budget 2006 the build up and the argument.” announcement of a stocktake hastily brought forward several weeks after the Newman says he never did fully leaking of a Cabinet paper detailing the establish what had happened and why

TUANZ – A brief look at 30 years of leading change I 13 proposal and approving regulation. For Craig Young, who at the time was in- The Telecommunications Stocktake volved in representing TELSTRACLEAR in agreed to amend the Telecommuni- these issues, the unbundling of Tele- cations Act, introducing local loop com’s copper network was a key mile- unbundling in Telecom exchanges and stone in New Zealand telecommunica- cabinets, along with changes to the tions, and one that would ultimately lead regulated unbundled bitstream to the structural separation of Telecom. services. The paper also recommended that a structural separation of Telecom “As much as a regulatory shift, the un- into a wholesale and retail business ‘to bundling of Telecom’s copper network, remove incentives to impede access to whilst maybe not as successful commer- its network for competitors, be kept cially as it might have been, the change under review in case there are on-going brought was a big shift in the approach difficulties with implementation of the Telecom had to take to those sorts of Government’s broadband objectives’. assets and services,” Young says. “Before then, you couldn’t really get ac- “BEFORE THEN, YOU COULDN’T cess into Telecom’s infrastructure and estate in their exchanges. Then over- REALLY GET ACCESS INTO TELECOM’S night, suddenly these people who had INFRASTRUCTURE AND ESTATE IN maintained and looked after the assets on behalf of Telecom had to let other THEIR EXCHANGES. THEN OVERNIGHT, people in to put their equipment in.” SUDDENLY THESE PEOPLE WHO HAD Young says the change also heralded the MAINTAINED AND LOOKED AFTER THE first step in creating a wholesaler ‘who ASSETS ON BEHALF OF TELECOM HAD actually wanted to sell services and had the right incentives in place’. In 2007, TO LET OTHER PEOPLE IN TO PUT Telecom opened its first phone THEIR EQUIPMENT IN.” exchanges to rivals in the first steps to opening the local loop up. The leak wiped around $2 billion off That would ultimately lead to the next Telecom’s value and prompted an big step, Young says: UFB, and with it, investigation and the firing of the the structural separation of Telecom messenger. into two discrete businesses.

14 I TUANZ – A brief look at 30 years of leading change FIBRE AND FULL SEPARATION

For much of New Zealand pre the mid thinking about the opportunities not to 2000s, fibre may well have been just do the things we do today a little something we were told to eat more faster, but to actually change the way of. The 2008 elections changed that, we do things dramatically.” pushing fibre into the general public In 2008, TUANZ’ work paid off. At a consciousness more than ever before. Chamber of Commerce TUANZ, under Ernie Newman as CEO, luncheon, John Key as leader of the had been pushing for improved access opposition, announced plans for a UFB networks for a number of years, arguing programme, recalls Ernie Newman. for fibre to the home and working “That galvanised Labour to do the strongly behind the scenes to encourage same thing.” any new government to take a stand. National won the election, and the Paul Brislen, TUANZ chief executive UFB project kicked off. The UFB project from 2010 to 2014, recalls TUANZ’s came with a condition for Telecom, enthusiasm for ubiquitous broadband in however. In order for it to be a partner the early 2000s, gathering those in the in the UFB project it was required to industry together for forums to discuss structurally separate into a wholesale future uses and how they could network business and a retail/mobile transform New Zealand. business. Operational separation had commenced in 2008, with then Communications THERE IS A and IT minister David Cunliffe dubbing PROBLEM WHEN A March 31, 2008 ‘Separation Day’ after GOVERNMENT WANTS declaring a ‘robust’ plan for the TO BE AN INVESTOR separation had been approved. IN A SECTOR AND THE REGULATOR. The operational separation, into three business units – network (Chorus), PAUL BRISLEN wholesale (Telecom Wholesale) and retail (Telecom Retail) – had been a priority for the Labour Government, “We brainstormed ideas about what we with Cunliffe saying at the time that the could do with it and how it would move would increase competition, change things in all the different innovation and investment to deliver business sectors,” Brislen, who at the a more effective telecommunications time was working in tourism, says. sector to benefit all of New Zealand. “We came up with a whole lot of ideas Mark Ratcliffe, who was Telecom CIO like Facebook [-style networks], virtual from 1991 and later Chorus chief reality googles and whole bunch of executive, is more direct. “It was a other things that have slowly come to punishment for Telecom for bad be. And it’s coming to fruition now behaviour,” he says. “It was the view of because we have a network like UFB the Clark government that Telecom had and it is at a relatively good price.” acted anti-competitively, that they weren’t encouraging competition and “But those early meetings were a really particularly that they were stifling the good catalyst for getting people uptake of broadband in New Zealand.”

TUANZ – A brief look at 30 years of leading change I 15 Despite advocating within Telecom for “It took a lot of persuading that it was the separation of the company so it the right thing to do for shareholders could participate in the UFB project, because when you looked at the two Ratcliffe is dubious of the value of the options economically, it was more operational separation model with its valuable to separate than it was to local loop unbundling. compete with somebody else over building a network with government “I don’t think it made a jot of difference to money.” competition in New Zealand. It incurred an enormous amount of money to The structural separation and Telecom’s unbundle the local loop and separate involvement in the UFB project, also Telecom into three pieces for no real came with new pricing rules for UBA – change or outcomes for anybody,” he or unbundled bitstream access – says. “Arguably prices went down for pricing, which moved from retail minus customers, but whether that was the pricing to cost-based pricing. Chorus result of operational separation or not were given three years warning of the is really hard to tell.” pricing change, scheduled to come into effect in 2014. TUANZ and others in the industry would argue that the timing for the The 2012 draft pricing and the November unbundling of the copper network was 2013 determination, which set the price too late, and the introduction of a large considerably lower than the earlier price, number of active fibre to the node sparked another contentious period in cabinets make unbundling difficult to New Zealand telecommunications. While achieve in scale. The fact was, however, the rest of the sector cheered the new that a small percentage of lines were pricing, Chorus said it ‘significantly actually unbundled. underestimated’ the true value of Chorus’ network. Trying to persuade Telecom to participate in the UFB tendering The National Government announced it process ‘wasn’t easy’, Ratcliffe notes. was going to intervene with a review of “They were always reluctant the Telecommunications Act suggesting participants because the outcome was UBA pricing not be set by the if we win, we had to be prepared to cut Commerce Commission. It would be the the company into two and that wasn’t biggest, most public, fight for TUANZ something Telecom initially wanted to during Paul Brislen’s tenure as chief do,” he says. executive from 2010 to 2014. “For me it wasn’t a fight about the money as about allowing the Commerce Commission to do their job, which was to set the price independent of govern- ment, and making sure that indepen- dence was maintained,” Brislen says. Craig Young, who took on the role of TUANZ chief executive in 2014, says TUANZ has always been a firm believer in an independent regulator to set the price. “What happened in this case is that those on the user side saw the independence being challenged by the government deciding they would

16 I TUANZ – A brief look at 30 years of leading change implement some changes to perhaps (TUANZ) hoped, so that’s just the way it help one of their UFB partners,” goes,” Young says. Young says. “We can’t really complain about the Adds Brislen: “I really do think there is a process, in the end we got what we problem when a government wants to wanted by allowing the regulator to do be an investor in a sector and the their job. We certainly weren’t happy regulator, even a quasi regulator like with the outcome, but that’s what the way it was proposing to deal with happens with an independent regulator the problem. – you put your best case forward and they take the information and away “And in the end they did set the price they go.” and they didn’t set it as low as we

FUTURE FORWARD

However, New Zealand’s key telco sector players are incredibly buoyant ONCE YOU START about the future of the sector – and REGULATING PARTS what it will provide New Zealand with. OF THE MARKET, YOU While most agree there’s still work to HAVE TO KEEP ON TOP do – and all have differing ideas of what OF IT. YOU CAN’T LET that work entails – many believe the IT GET AWAY. industry is in the best position it’s ever been in. CRAIG YOUNG For TUANZ under its current CEO, Craig Young, the focus remains on driving working every two or three years . New Zealand telecommunications “In some ways it’s a never ending story forward to ensure New Zealand in many respects, because once you can make the most of the digitally start regulating parts of the market, you connected world and encouraging have to keep on top of it. You can’t let it New Zealand to be one of the top 10 g e t a w a y.” countries for business usage of ICT according to the World Economic In February 2017, the New Zealand Forum global network readiness index Government released a further by 2020. discussion document looking at how the regulatory framework will apply While the big hairy issues in NZ from 2020. The document sets out final telecommunications may appear to views on the approach to UFB fibre have been resolved – until new ones services and new proposals for copper flare up - and the access market is now services to see copper de-regulated strongly regulated, Young says there will and the Telecommunications Service always be ongoing discussion around Obligation removed where UFB or other the pricing of that regulated network. fibre is available. “We hope to be in a position by 2020 But it’s not just broadband and fibre the Government will have regulations changing the Kiwi telecommunications in place to price the new fibre access market. Young says with there will be networks, but even then we’ll see issues to be resolved around spectrum reviews of how those regulations are as we move into 5G mobile networks.

TUANZ – A brief look at 30 years of leading change I 17 “We’re going to be talking about what’s “If you go right back to when we started the fair allocation of increasingly 30 years ago, that was the thing people important radio spectrum, and TUANZ met about – they wanted to talk about has always argued that spectrum how they could use these things that shouldn’t be allocated just on a were coming out – and we can continue commercial base. to play a really strong role in that space.” “There’s the need to ensure some And while TUANZ is continuing to help spectrum is able to be used by smaller New Zealand make the most of a digitally and more innovative players to deliver connected world, it’s also working to services that might not have been bring fresh blood up through the delivered otherwise.” industry, ensuring a vibrant future for the sector. “In rural New Zealand we’re going to need to use every tool we have to With that in mind, TUANZ relaunched make sure we can provide decent the FLINT (Future Leaders In connectivity and not leave that part of Technology) programme for those at New Zealand behind,” Young says. the beginning of their careers. The programme aims to enable future “It’s going to be a mix of pushing fibre leaders to develop knowledge and be out further then using wireless as much exposed to industry leaders and ideas as we can and then satellite where so they too, can step up into senior needed, but we always want the latest roles with communication technology and greatest for New Zealand.” responsibility. Ensuring strong competition in the rural market is also a crucial aspect, though it’s one Young says is a more tricky issue. “In urban markets there are a significant number of retail service providers for UFB. It’s easier to provide services off that network and to become a retail service provider. We’d FLINT gathering like to find a way for rural New Zealand to have some equivalent level of “They’re our future leaders and we competition so they’re not just getting need to invest in them now and get connectivity, but actually connectivity them thinking about how they’re going at a competitive price.” to help New Zealand make the most For TUANZ the resolution of many of the technology they see coming of the recent big issues means it can through,” Young says. “And from what return to more of an education focus as I already see with the people getting it seeks to encourage local businesses involved in the group, there’s some real to use technology to improve New energy about the future of the sector.” Zealand’s economic prosperity. “In 20 years time, I’ll be sitting in a “At present we’ve got what we wanted, rest home – and they’ll be the decision which was investment in the new makers, so we’ve got to invest in our networks, now we need to encourage future, now.” people to use it and to help them understand what the future is and what they should be looking at for their businesses,” Young says.

18 I TUANZ – A brief look at 30 years of leading change ANNA GUENTHER ALLAN FROST CEO - PLEDGEME GROUP MANAGER - ORGANISATIONS SUPPORT, NZTA

IAN PROUDFOOT DAWIE OLIVIER PARTNER & GLOBAL HEAD OF AGRIBUSINESS - KPMG CHIEF INFORMATION OFFICER TECHNOLOGY - WESTPAC

CRAIG YOUNG DR CLAIRE BARBER CEO - TUANZ GM OF CHANGE & TECHNOLOGY - SPARK

2020 PROJECT

Thirty years ago a group of New Zealanders saw the need to bring users’ voices into the centre of the telecommunications industry, and to challenge both providers and government to modernise an outdated but essential enabler of our economic growth. Today TUANZ remains committed to representing the users of telecommunications in New Zealand in an era of unprecedented digital opportunity. This history marks those thirty years of change in the communications technology market and the key role that TUANZ played in it but now it;s time to look to the future. To help us do that we have kicked off our 2020 Project which is all about what will the needs of businesses be for technology beyond 2020. We’ve begun by inter- viewing 6 industry leaders throughout New Zealand to get their insights into what they believe we need from the telecommunications industry, in 2020 and beyond. You can see these video interviews on our website under Our 2020 Project or on our YouTube channel. We look forward to continuing this conversation with New Zealand about how we can make the most of our digitally connected world.

TUANZ – A brief look at 30 years of leading change I 19 P O Box 302 469 North Harbour This history is AUCKLAND 0751 supported by Phone: +64 4 815 8178 Email: [email protected] tuanz.org.nz