Minutes of Public Policy Committee - 5 June 2008

Present: (Auckland) David Farrar (Chair), Rick Shera, Michael Wallmannsberger. (Teleconference) Hamish MacEwan, Simon Riley, Doug Mercer.

In attendance: Jordan Carter, Richard Wood.

Apologies: Judy Speight, Sam Sargeant, Pete Macaulay, Keith Davidson.

Opened: 10.00am

1. Minutes of Last Meeting – 1 May 2008

Minutes of last meeting adopted as a true and accurate record.

2. Action Points / Matters Arising from the Previous Minutes

AP – SMS Interception letter – needs a time frame around it – by mid-June

AP – Follow up on paper on wireless interception and other issues

AP – No longer invite David Skilling to PubPol

AP – David Farrar still to do legal jurisdiction

3. Fibre RFP

A series of questions were raised on Members list:

* Is a further study needed? What will it add?

David gave some background on the Broadband RFP document:

Originally the advice received was to do a peer review of the Skilling proposal. This was prior to National’s broadband announcement. A proposal was then put forward on what the project would become. There was unanimous consent to have Doug Mercer work on an RFP document looking at broadband strategy options. Council sign-off is required before it goes out. This approach is trying to achieve the same goal as what members wanted.

Hamish asked whether there is any need for us to stir the pot further. This is yet another report in an environment where InternetNZ is going to get bang for very little buck as someone with an agnostic view. It will be hard to fulfill the RFP requirements of not having a political view on things. If it comes to Council he will need a lot of persuasion.

Doug said there was a great need to drag the broadband issue off the level of slogans and bring it into something practical.

Simon questioned whether the statements in the press release aligned with the RFP. Also the RFP seems to be duplicating a lot of the work that the NZI report has already done.

There was differing views about the quality of the press release in reflecting the RFP and in achieving its purpose.

There was further discussion about the point of the RFP, about not waiting until the election, and starting some quality analysis now. It was noted that in a politically charged environment Labour is saying something apparently different from National. What we are doing could be very useful to either Government after the election. That is the basis on which we should be recommending it to Council. We wouldn’t be saying one party is right, it is about the issues with each process.

We will see lot of noise between the parties arguing they have the best approach. What this research will provide is a picture of what is best for NZ. The output as framed by the RFP will be useful and will give people a basis to judge the parties proposals.

Rick commented that from what he heard at the Broadband Investment Forum there was expressed a crying need for such a study, showing a way forward for New Zealand and InternetNZ is independently and ideally positioned to do it.

Discussion turned to whether the NZI report already achieved the desired result. Simon noted that the whole point of the NZI was to create a strawman for people do critique. No one has dismissed it, neither the Govt nor National. So there is a plan for NZ Inc.

David noted it is a very good proposal for NZ inc but it only suggests this is the best way forward, but not how do you do it. People want to see some research on how.

Rick noted the primary target of the NZI report was to get broadband fibre to be on the table. It only outlined one approach and there is another alternative, and that is Labour’s policy, which is about revenue expenditure.

Simon said NZI should have done another report looking at various models and options prior to choosing fibreco. There is a gap in their work as it doesn’t look at the spectrum of policy options.

* Why did the RFP referred to a NZ Broadband Network and not a more federated approach.

Agreement that the language should be more neutral

AP. Doug and staff to make it clearer that it wasn’t meant to be referring to one network.

* Use of the term “next generation broadband”.

It sounds like fibre to the node or telecom’s network. How about the term fibre-speed broadband?

AP. Doug and staff to reconsider terminology

* Absence of demand side driver data.

If we have the govt as the biggest user, employer, then that would be a large part of the answer to driving it. This will come out in the FibreCo analysis.

Simon noted that modeling in the US is that the cost of fibre to the home shows no business model. That is current industry thinking. The issue needs to be addressed. Should there be some modeling?

David noted that the RFP does include an economic analysis.

Simon suggested the budget applied won’t cover the level of analysis that would be required. There is an issue of focus.

Doug said he had the same concerns and that is why it is split into a first stage process. The first stage looks at what is out there, and then we’re in a better position to see what is achievable in the report proper. If it is possible to do an in-depth analysis then we can.
David noted that NZI may have data they haven’t published.

Rick commented that at the broadband investment forum there was discussion about how to find out enough information from all the players to make good assessments and that needs to be thought through as part of the first stage. Perhaps some sort of black box arrangement that does not disclose.

Simon commented that stage 1 comes across as a wide open discovery process but it could be more tightly worded around being a review component in stage one more tightly working out what can be done in stage 2.

* Question about report not being influenced by political parties.

It was noted that the way that was derived was trying to say that we shouldn’t assume the options on the table are the only approaches. They have to be taken into account but they shouldn’t define what we should explore.

AP. Doug and staff to reword using “constrained” rather than “influenced”.

Simon said his assumptions were it would include a peer review of fibreco and of both the political party announcements as well as other models.

* Disclosures of interest

There needs to be something in the RFP about disclosing interest from the contractor.

The group then did a page-by-page work through the RFP document:

AP. Changes as follows:

Pg 4.

Objective – can we make sure that it is clear somewhere that they can use partners or contractors.

Pg 5.

Content – add any areas where further analsys is required.

Stage One – put some meat in what we want it to cover and include the process

Stage Two – becomes more an analysis side.

Principles :

1- Network to be referred to as infrastructure. Open access must have open access on some or all of the network? Relate it to ensuring competition? There is a big debate on open access. We need not to prejudge on this issue. Remove open access, change to wording about having a pro-competitive network that will enable competent service providers to compete.

4 – it doesn’t capture the transformational nature of broadband, too much focus on consumer, not enough on business. Three approaches - could define the services, give a bandwidth target, or specify technology type.

We want to end the bandwidth constraint, which means setting a bandwidth minimum that is effectively unconstrained.

Change to a description that said it is effectively unconstrained for requirements for the foreseeable future.

Pg 6.

Scope:

Take the final point after the numbered points out.

20 - Change from mention to review

Simon says the scope list looks like half a million dollars of work. What do we really want out of this in terms of election campaign and post election work.

Change first line to what “may be included” in the scope of the report.

4 - Should refer to the reliability of the network.

10 - Delete

Pg 9

4.4 – add subcontractors

There was discussion about work required, timing and budget

AP. Richard, Doug, Simon and David Farrar meet to finalise document on Monday 9th at 11am at InternetNZ

AP. Put to council on Friday 13^th as part of exec directors report with resolution: Committee recommends to council a budget cap of $120,000 ex GST as per fibre campaign budget.

(Doug left meeting)

4. Broadband Investment Fund

Rick updated the meeting following the Broadband Investment Forum, The political parties aren’t that far apart, even though in public they are. There was feedback in terms of timing. The broadband investment fund seems to be annual, some people submitted a rolling process would be better.

David noted the submission is due in June, do we need a tiger team?

Simon reported from a meeting where Reg made a presentation. They’ve had some push back already and because of time constraints, he’s appears to be prepared to look at a two tiered approach in terms of people making application.s A number of councils have already prepared applications so could possibly skip the first stage.

Jordan noted he has been tasked with coordinating a paper for the next DDC meeting coordinating with LGNZ and TUANZ on the criteria.

AP. Form a tiger team of Richard, Jordan, David, Simon and anyone else who wants to come to meet on Thursday 12 June at 12pm.

Simon asked what is value of Broadband Investment Forum and does it intend to continue? Rick noted there is no plan to have a further meeting at this point.

Jordan noted that National appears to have a contradiction in its announcements between abolishing BIF or doubling the original Broadband Challenge fund. David noted that National’s policy as per John Key is to find the best way forward, while Maurice seems to be indicating a more definite approach.

There is a cocktail function organised by FX Network in Auckland that Jordan is attending and there may or may not be more detail. A meeting with Maurice would be worthwhile.

AP. Staff to arrange a meeting with Maurice in the week June 16

5. Rural Broadband Working Party

Jordan noted it is in hiatus because we had a framework but it has now been blown out of the water a bit with the uncertainty.

6. Broadband Applications round table

No specific proposal, it’s more an idea.

AP. Jordan and Simon to come up with a proposal for Broadband Applications round table.

7. Copyright

Rick reported. There was a very good meeting with ISPs and rightsholders. There is an extension with MED for making a submission on notice and takedown process. There is broad agreement with music industry on what the issues are. The key issue being what happens if ISPs get it wrong in terminating offenders on the request of rightsholders. If we can get regulations from MED it will be ideal. This may prescribe a code of practice.

8. Internet Code of Practice

Campbell Gardiner called in to present on this:

The ICOP has been languishing on our project list for some time, the entire history of the organisation. We are wanting to make a last ditch attempt to resuscitate it. Nothing was done while TCF did its Customer Complaints Code. TelstraClear wasn’t so interested, but Telecom showed more interest.

It was noted that TCL was previously one of the strongest supporters of it. Campbell has cut out parts on complaint handling due to the CCC dealing with it.

David gave his feedback: The first is that having deleted any complaint handling procedure it’s not clear on what basis the signatories could expel one of their members for breaches. So we could remedy to make the criteria that they are being pinged in other processes. And secondly the need for unanimous consent needs to exclude the signatory complained about.

He said we should polish it up, offer it up, but not aggressively push it. There is a CCC with the TCF and the world hasn’t ended.

Jordan noted that the copyright situation may require a code.

David noted growing number of codes. It seems almost too late to have one overriding code.

The TCF may be the better vehicle for a coyright code but InternetNZ should be involved in that. Codes are one of the TCF’s chief reasons for existence.

Michael asked what was the objective of the ICOP. David responded the objective for the codes was self regulation including to create positive view as a branding.

The risk of continuing was considered in terms of the potential of not finishing but it was felt we should make one last effort.

It was suggested this go on next PPC for a finessing walk through. ISPANZ is also looking at it today as well.

Simon noted TCF is not likely to get involved. The TCF would need to be convinced of the reason and copyright could provide that but with something more generic it is harder ask to get them involved.

It could came back to life because the op sep regulation allows the minister to regulate if industry doesn’t do it.

AP. Revise ICOP at next PPC if ISPANZ shows any interest, otherwise close it off.

9. Updates/Issues:

TSO response to govt comments.

David Cunliffe said in a press release he wants a more radical look at the TSO.

Jordan is going to review our submission and see if there is anything further we can easily do.

AP. Jordan to establish if anything further we can easily do re TSO.

Operational Separation

Rick noted that Minister made it quite clear that structural separation is completely off the table. It would only ever come on the table if the op sep undertakings were breached or proved inadequate.

Also because the minister, ministry and telecom had worked so closely together the relationship was so good that to raise the issue would be a mark of bad faith.

Cyberlaw fellowship

All on task.

10. Any Other Business

Political Debate

There are issues of communications, broadband, fibre – we should be thinking of approaching senior journalists, not necessarily tech journalists. We also need to look at production levels. A partnership with a serious media organisation would be good.

If we want to get TVNZ7 to broadcast a debate then that is one thing, else we could hold the debate. Prime is another option.

AP. Richard, Staff/David, need a group to brainstorm possible panel and structures.

Meeting Closed: 12.15pm

Date of next meeting: TBC

Signed as a true and correct record:

…………………………………………………

David Farrar, Member, Chair

Draft Author: Richard Wood

Draft Reviewer: Jordan Carter

Draft to PPC: 9 June 2008

Amended:

Adopted: