Interview with ICT Minister Amy Adams

Transcript of Q and A interview with Amy Adams by Computerworld editor Sarah Putt

So all the ones that have got it now – TVNZ, Kordia, Mediaworks, Maori TV, The NZ Racing Board and Sky TV, they’ll keep all of their provisions?

The allocation of who got which digital bands was made by the last government, so we’ve just inherited that. That was made in 2006. So if you’ve got queries about who has got what spectrum and why and why has it gone to these bands, you need to talk to them. So that was all done long before we came into office. That process was completed.

They made the allocation of who got which bands and effectively it is the ones you’ve listed although I noted in what you sent through, you talked about there being, did you refer to nine sets? There are actually 11. My understanding is there are 11 sets, each set is an 8MHz band paired and each of those 8MHZ paired sets is capable of carrying 10 standard definition channels or three high definition channels. Which gives you give you a total capacity under the 11 sets of 110 standard definition channels. So you can see we’re well under capacity. Five of those sets are directly or indirectly owned by government or government-controlled entities. So in terms of your point about what if some government of the future wanted to set up some more directly government controlled entity, the point is that there is plenty of capacity there. So there’s no shortage of capacity under that framework. But if you’ve got questions about who got what and why, direct them to the last lot.

Fair enough, six years ago. So 11 sets, five of which are government owned?

Directly or indirectly

That would be Kordia, TVNZ, Maori TV, would you count the Racing Board? I suppose you would, they’re not directly owned but we have the control under legislation.

My understanding is they [NZ Racing Board] sold their rights to a private company.

No, you’re wrong.

They had an option to take up their set and they’ve only just exercised the option, its there option.

The eleventh one is ‘other analogue commitments’, which is a set that’s reserved for that. Which falls under our control. The point being that there is plenty of capacity in those, given there’s 110 potential channels within those 11 sets.

The govt doesn’t directly control Kordia or TVNZ, they’re State Owned Enterprises, where is the direct ownership, there is none, they’re all SOEs.

The 11th one, the unallocated one, the 11th set is directly controlled.

Suffice to say, you’re confident that if a future government decided to do a TVNZ7 type arrangement...

I’m confident there is plenty of capacity sitting in the sets that are set up right now for decisions like that in the future. In terms of the decisions on why the sets are allocated the way they are now, that’s what we’ve inherited.

The point is I don’t have any concern that there is a capacity issue in terms of future flexibility.

And you are not concerned at all about government ownership of any of that capacity. Tomorrow they [government] could set up a channel.

No, I think the framework that we have at the moment in terms of the SOE model is appropriate.

Apart from that 11th set, which is government owned and can be used for a TV channel.

At the moment it is set aside for other analogue conversion commitments, which is a full set, I guess it’s a wash up set.

But there’s actually nothing directly government owned, is there?

That’s not our model, generally we do these… commercial entities are generally held through SOEs.

So you don’t have to sort out the broadcasting spectrum in order to work out what’s going on in the 700MHz spectrum?

We’ve had to clear the 700MHz spectrum from broadcasting licences but that’s all working really nicely. That’s a project that is almost now completed and then we have the digital switch off starting from September this year with the net effect that by December next year the 700MHz spectrum is completely clear and available for reallocation. My job is to ensure all the allocation methodologies are in place and completed long before that so that the companies have a good run-in window to be ready to go once the spectrum’s clear.

You’re basically waiting for the conversation with Maori to conclude before...

No not at all, there are all sorts of stuff that we are working on ahead of that.

There’s all sorts of things were looking at – band architecture, allocation methodology, whether there will be spectrum caps, how you set reserve prices, all those discussions. There’s a lot of work that has to go into designing the allocation system and structure, so all that’s happening, with different work streams going on.

Telecom says it should split evenly between the three – if you’ve got 45MHz, give them 15MHz each.

You don’t tend to spend a lot of time worrying about what the people who want to acquire want from it, because they tend to have a different set of objectives then we do - which is to ensure it goes to the best and highest value use and it will be used effectively for New Zealanders.

I listen patiently and I’ll make my own decisions.

How are you finding the industry, it’s an interesting industry, it’s very vibrant – almost a year in the role – how would you characterise it?

The telco sector is one that has gone through a period of immense regulatory upheaval and commercial upheaval, so they are a little bit battle hardened I guess from all of that. I think the main thing they are looking for is a little bit of certainty so they can get on and start to plan their business models going forward and I accept that there’s been a big period of change. They are generally very responsive to directions from the government about things that we think need to be addressing and my approach - and I’ve said this to the TCF on a number of occasions - is I would far rather work with them.

We’re lucky in New Zealand that we have a sector that is small and cohesive enough that you can talk to the sector directly. If you identify an issue that we think needs to be addressed, my preference is always to say to them first – ‘we think this is an issue, how are we going to get through it?’, and if they can come up with a solution, generally that is the most efficient way to do it, rather then us regulating over the top. But with the eventual stick that if they don’t then I’m able to regulate and I’ve made it very clear that I will.

We’re lucky that we have a sector that we can talk to that are responsive, that are very keen to work with us in a New Zealand context, I think they do that pretty well. We’ve certainly seen some interesting parallels between our telco industry and the Australian sector and the way in which they respond to different things and I think in my view we come out on the better side of that ledger. I’d rather have our industry to work with then the Australian one.

Then the IT sector is a different beast again and it’s characterised by very innovative, creative, out-of-the-box, as you would expect New Zealand companies to be. They tend to be much smaller, characterised by the ‘three guys in a garage’ as opposed to the big entity. Very agile, responsive, not restrained by what everyone else says can’t be done and as a result they are coming up with some amazing, world leading projects.

I think the one thing I try and encourage them to be more assertive with is to fly their flag because I don’t think we’re good enough at owning the space of how creative and innovative we are in the IT sector. Both in the small niche creative side of it, but also there are some very big and successful IT companies. But IT as a sector tends to fly under the radar a little bit in New Zealand.

Are you flying their flag, they’re worried about things like skills shortages.

I have a big piece of work with my colleagues in a number of areas to fly the flag, recognising that government has a role to play. One is working with Minister Chris Tremain in terms how IT companies can interact with government better and we have an ongoing conversation around that.

I have a similar piece of work with Minister Steven Joyce in terms of skills training and making sure the pipeline – to use that horrible word – is providing the skills we need coming through the system and not only at the tertiary training level, but also right through the schooling system.

I think possibly our system hasn’t been as good at that historically and possibly that’s because the people who are talking about that, the options themselves are maybe not as familiar with this as a career.

The third part of it is also working with Minister Joyce in his science and innovation portfolio. Incubator type approaches, national science challenge, innovation hubs, some of the innovation support approach through the Crown Research Institutes and the CRI interface with the Advanced Technology Institute work stream and making sure there’s a very strong digital focus. My job is to work with each of those portfolio ministers to make sure the flag is flown.

When I travelled overseas, the one I’ve done for the IT sector was through to Korea, I realised again that I had a role I could play usefully in getting into meetings and through doors that perhaps they can’t do on their own and selling that story. I was able to meet in Korea the president of Samsung Electronics and talk to him about our IT sector and it was a little bit concerning is that he seemed reasonably unaware about the NZ IT sector at all despite the fact they are using a number of NZ ICT products in their component.

I was very keen to push with him that we have this amazingly creative IT industry that isn’t looking to replicate the mass production of the Samsungs but is looking to supplement what they do. And when you think this company is making 400 million cellphone screens a year, we only need a tiny little part of that business and it’s huge. We’ve got some amazing work happening with some of our health IT specialists, particularly out of Auckland University working in Korea, on the development of health robots to work in old people’s homes. There are some neat things happening with the Natural History Museum and the real time digitising of the old archival footage.

In the international space we’re not front of mind in terms of the creativity and the talent to plug some of these gaps. So when I travel I try to push that a bit.

What about Chief Technology, we’ve got Peter Gluckman as the Chief Science Officer – what about a CTO, that would send a message to the country.

That’s fine, but if you’re just sending a message and creating a title for the sake of it. You’d have to be very clear what the role would be.

Peter Gluckman as the science advisor has been very useful because he does keep everyone focussed on the importance of science and the evidence basis for things and it is creating a different way of thinking around some of this.

One thing government is rich in is we have vast amounts of data, and in my personal view historically we haven’t been using it nearly to its full advantage in terms of understanding impacts of various policy shifts throughout the ages. There’s tremendous opportunity for some clever companies, and most of this data is freely available under our open data project, to start taking some of that data and finding clever ways to commercialise it.

One of the big growth areas is clever commercialisation of government data and turning it into some pretty cool products. Let’s look through this data archive that we’ve got and get a much better evidence based understanding in terms of what policy shifts through the years and what impact they’ve had. Immediately you’re left with how do we do that and straight away you start talking to IT companies.

In terms of a CTO, that’s something that could be developed. But we’re not just going to create the office in and of itself; we need to have a clear understanding of how it would add value. What we do have is a CIO and I guess you could say they are our go-to person but that’s much more in terms of governance positions.

What about the procurement issues?

There’s more happening in that space then I think people realise. They see the big end of town contracts that are let. My role as the IT minister is to be in his ear nagging and pestering and working on how some of this stuff can be better. We can do better in this space in terms of making our procurement easier to navigate and easier to qualify yourself up through the rankings of government contracting and I think you have to understand that if you’re a small bit player in the sector it’s pretty hard to get in. Any government agency looking to contract wants to see some history of dealings.

What about a buy kiwi made clause?

I don’t agree with that. Fundamentally it’s not my policy base and it’s not what the government believes. We believe you pick the best contract to do the work, but actually it’s also a little bit like positive discrimination. I never wanted to be chosen for a job because I was a woman; I expected to get there because I could do the job just as well as anyone else. It’s a bit the same. If we’re saying we’re going to chose a kiwi company whether or not they’re good enough - one it’s a bit dismissive, two it doesn’t encourage them to step up and be internationally competitive and three it doesn’t recognise actually the future of New Zealand is trading with the world. We can’t go back to the dark old days where we do stuff internally whether or not it’s of international standard.

What we have to do, and what agriculture has done so successfully when it lost its subsidies and lost all its free trade protections, is say ‘if we are going to compete we’ve got to compete on the world’s stage’ and I actually think New Zealand companies are not only capable of that, they’re already doing it. Why would we set up this illusion that somehow they needed a leg up in the process? They don’t and actually if you’re looking at two bidders side by side whose offering is as good as service, similar pricing points, of course the New Zealand company is going to have a natural advantage anyway because of the local base, their understanding of our cultural ways of doing things, their accessibility, their New Zealandness to do things.

I don’t think we need to start building in contractual handicapping or advantaging and I think it’s a bit insulting to suggest that the New Zealand industry needs that sort of a leg up to foot it with anyone else. What I do think we need to do is ensure our contracting is made much more approachable and user friendly, particularly in the smaller level contracts so they can get a foot in the door, qualify themselves with some smaller projects that the civil service is perhaps willing to try a little bit of an unknown on and then qualify themselves up through. I think we have to be much more open to people coming up with clever approaches and I think we’re starting to do that really well with things like the open door to innovation.

Here’s a problem we want to solve – it is very expensive process going through RFPs.

When we look at how much of the spend does go to New Zealand companies it is higher then people realise. They have this impression that it all goes offshore, which just isn’t correct. But what I’d like to see is more use of some of the smaller, niche, clever things that allow people to get an almost a win on the CV. Look at something like the development of the budget app – some little funky thing , that are a little bit different and edgy and allow them to start building the relationship. No one is going is come from a three guys in a garage and build successfully for the IRD contract, so they’ve got to build up and get capacity. The IaaS, you’ve got Revera and IBM. We’re just looking through the cloud strategy, it’s a work in progress, I accept that it hasn’t been as good as it needs, I don’t think it’s as bad as people make out but its certainly something we watch continually.

We’ve got one international cable, how do we get two – do we need two?

We’ve always said we like to see another cable, I’ve never come out and said we don’t need it. Whether it needs a NZ-US cable or an Australia-NZ cable. It’s a live issue and we’re agnostic on that and if anyone can get either up we’re interested to see it.

It was interesting to see that only five percent of the traffic going across now is NZ-US traffic anyway, so you do have to look at it and say this thing still has to make sense from a usage perspective. The fact that Pacific Fibre weren’t able to get investors over the line to build what they were proposing here does tend to suggest that the investment market doesn’t see the business case for it right now. We do have the capacity, there isn’t the pricing pressure, there isn’t monopolistic behaviour happening because if there were, that would drive the business case.

There was before Kordia starting talking about Optikor.

Prices have continually been falling but the rate card of Southern Cross Cable has been a reflection of what they’re offering in Australia and that is driven by competitive pressures. There’s always discussions floating around and I hear all sorts of things, people talking about the best options for trans-Tasman cable.

We’ve said there’s not government money available to put into build it at the moment. However, as you will be aware, we did put $91 million as a foundation customer [of Pacific Fibre] and if someone else came up with a viable project I’m sure we’d be willing to have discussions with them.

It’s all very well for people to say that the government should just write a cheque, but that’s another $400- 500 million that has to be found somewhere.

TUANZ CEO made the point that we’re in danger of becoming the world’s fastest intranet

But I don’t think we are and that’s a big íf’and that’s the point. If my view was that there was a serious capacity issue it would be an entirely different decision we’d have to make. But to sit here and add another four or five hundred million dollars to the deficit at a time when there’s actually no… I’m not saying it wouldn’t be good to have a second cable, I accept that it would but that’s a very different picture to ‘we’re an intranet’. We’re not there, that’s not the situation, and we’ll continue to monitor it. My view is that I think we will see a second cable project, be it trans-Tasman or greater, but we’ll just continue to watch it,

I get all sorts of updates, when I say updates, pieces of information flow through to me, would be probably be a better way of saying it then an update. The interesting thing was that I was looking back through the information that I’d received, literally one update said we’d be cutting the ribbon in July 2013 and the very next update we’re closing shop. So this stuff moves around fast and all over the place. I read everything that comes through and I keep an eye on it but you have to take it all with an understanding that every time you get an update, it seems to change significantly.

What’s the update with Cybersecurity?

It’s an interesting one. It sits between the prime minister and myself because there are aspects that relate to both. We have a co-joined responsibility.

The thing we’ve done recently is set up the national cybersecurity office. When I took the portfolio cyber policy was split amongst a number of agencies so some of the deliverables and the practical side came through some of the security agencies and then you had MED, as it was, doing the policy work and it was all just a little bit disjointed. What we have done is recognise that cyber policy is actually more of a central agency issue because obviously it is so diverse across so many areas. So we’ve set up a unit within Department of Prime Minister and Cabinet, called the National Cyber Policy.

The fact is that it’s a public matter, and I think that’s been a really good step because we did need to coordinate the work around that. It was, in my view, a little disconnected and I think it had to move into one of the central agencies, to give it the mana and the whole of government reach and I think that’s been a really good step forward.

While the PM has ultimate responsibility for all the security aspects I have still the responsibility for the policy work but the disconnection of those two previously was not ideal so I think this is a far better way of doing it.

Should Kordia own Orcon?

I’m not getting into that, that’s a matter for their board. That comes under the SOE minister, that’s absolutely a commercial matter. I watch it with interest because it impacts on the telco sector but I am not expressing a view on what they should do as a board.

Vodafone buying TelstraClear – any comment?

I think while that’s in front of the Commerce Commission it would be inappropriate for me to make a view on that. Given their independence it’s no appropriate for me to wade into that.

Trans-Tasman mobile roaming, are you going to regulate?

It’s been a really interesting process. Seeing the behaviour of the Australian and the New Zealand sectors while that investigation was going on was really interesting.

Trans-Tasman roaming charges are not solely a trans-Tasman issue. That’s clearly our biggest market and the obvious one to start with first, seeing that we have a close working relationship. But actually the challenges around it are inter-country regulation because we can regulate very easily in NZ. To be able to regulate in a way that protects New Zealand customers we have to be able to regulate Australian companies, which creates jurisdictional issues.

Even if we thought that the problem was solved – trans-Tasman – and I don’t think that it is, I think we have to continue to be actively monitoring it. The issue is around finding a model in which two countries can work together to address the issue. Because if New Zealand and Australia can’t make it work, I don’t think any two countries can make that work.

So this is in one sense the test bed and it’s important for both countries that we explore the ways that can best be done. And that gives us a platform to start talking to other jurisdictions. I think the clear message on this stuff is the roaming charges that we used to experience trans-Tasman, and we still experience in the rest of the world, are just not sustainable given the rate at which we travel and the rate at which we consume data.

If you start regulating between jurisdictions, that’s not going to affect things like trade treaties is it?

That depends on the terms of the trade treaties, but on the whole that’s just something that you work through case by case. The point is, first of all, is that you’ve got to have a system in which to do it, and then you’d have to go to those countries and make it work. But it starts off with a willingness from both those countries to want to do it. To the best of my knowledge I’m not aware of any trade agreements that touch on the issue of roaming charges. Although it’s an issue that is being looked at in places like the European Union, amongst their member countries and the OECD in terms of addressing whether it’s an issue.

Even Mobile Termination Rates with Vodafone, that’s got to come under scrutiny in a trade agreement?

Well potentially, it depends on the terms of the treaty.

Finally, what are you doing terms of broadband product disclosure?

My view is that technology is moving out of the ambit of just tech heads who understand this stuff. I always think of my 70-year old mother with her iPad and trying to work out her data packages. She can’t understand what she’s buying and what she’s using and how it all works and what the speed is and how to compare. Particularly as we start to get this plethora of fibre offerings in the market, I want her to say ‘which one works for me, what am I getting if I go with that one?’ I think there is room to move on that one.

Who does look after the technology/telco consumer, do we need a specific government agency?

I don’t think we need another government department. We’ve already got the Ministry of Consumer Affairs, the Fair Trading Act and the structures around that, what we’ve got to make sure is that it’s properly reflective of products as they come into the market. The Fair Trading Act wasn’t designed for things like broadband speeds and telco products. But rather then create a whole new bureaucracy; I think we just have to update the structures we have to make sure they are fit for purpose.

So all the ones that have got it now – TVNZ, Kordia, Mediaworks, Maori TV, The NZ Racing Board and Sky TV, they’ll keep all of their provisions?

The allocation of who got which digital bands was made by the last government, so we’ve just inherited that. That was made in 2006. So if you’ve got queries about who has got what spectrum and why and why has it gone to these bands, you need to talk to them. So that was all done long before we came into office. That process was completed.

They made the allocation of who got which bands and effectively it is the ones you’ve listed although I noted in what you sent through, you talked about there being, did you refer to nine sets? There are actually 11. My understanding is there are 11 sets, each set is an 8MHz band paired and each of those 8MHZ paired sets is capable of carrying 10 standard definition channels or three high definition channels. Which gives you give you a total capacity under the 11 sets of 110 standard definition channels. So you can see we’re well under capacity. Five of those sets are directly or indirectly owned by government or government-controlled entities. So in terms of your point about what if some government of the future wanted to set up some more directly government controlled entity, the point is that there is plenty of capacity there. So there’s no shortage of capacity under that framework. But if you’ve got questions about who got what and why, direct them to the last lot.

Fair enough, six years ago. So 11 sets, five of which are government owned?

Directly or indirectly

That would be Kordia, TVNZ, Maori TV, would you count the Racing Board? I suppose you would, they’re not directly owned but we have the control under legislation.

My understanding is they [NZ Racing Board] sold their rights to a private company.

No, you’re wrong.

They had an option to take up their set and they’ve only just exercised the option, its there option.

The eleventh one is ‘other analogue commitments’, which is a set that’s reserved for that. Which falls under our control. The point being that there is plenty of capacity in those, given there’s 110 potential channels within those 11 sets.

The govt doesn’t directly control Kordia or TVNZ, they’re State Owned Enterprises, where is the direct ownership, there is none, they’re all SOEs.

The 11th one, the unallocated one, the 11th set is directly controlled.

Suffice to say, you’re confident that if a future government decided to do a TVNZ7 type arrangement...

I’m confident there is plenty of capacity sitting in the sets that are set up right now for decisions like that in the future. In terms of the decisions on why the sets are allocated the way they are now, that’s what we’ve inherited.

The point is I don’t have any concern that there is a capacity issue in terms of future flexibility.

And you are not concerned at all about government ownership of any of that capacity. Tomorrow they [government] could set up a channel.

No, I think the framework that we have at the moment in terms of the SOE model is appropriate.

Apart from that 11th set, which is government owned and can be used for a TV channel.

At the moment it is set aside for other analogue conversion commitments, which is a full set, I guess it’s a wash up set.

But there’s actually nothing directly government owned, is there?

That’s not our model, generally we do these… commercial entities are generally held through SOEs.

So you don’t have to sort out the broadcasting spectrum in order to work out what’s going on in the 700MHz spectrum?

We’ve had to clear the 700MHz spectrum from broadcasting licences but that’s all working really nicely. That’s a project that is almost now completed and then we have the digital switch off starting from September this year with the net effect that by December next year the 700MHz spectrum is completely clear and available for reallocation. My job is to ensure all the allocation methodologies are in place and completed long before that so that the companies have a good run-in window to be ready to go once the spectrum’s clear.

You’re basically waiting for the conversation with Maori to conclude before...

No not at all, there are all sorts of stuff that we are working on ahead of that.

There’s all sorts of things were looking at – band architecture, allocation methodology, whether there will be spectrum caps, how you set reserve prices, all those discussions. There’s a lot of work that has to go into designing the allocation system and structure, so all that’s happening, with different work streams going on.

Telecom says it should split evenly between the three – if you’ve got 45MHz, give them 15MHz each.

You don’t tend to spend a lot of time worrying about what the people who want to acquire want from it, because they tend to have a different set of objectives then we do - which is to ensure it goes to the best and highest value use and it will be used effectively for New Zealanders.

I listen patiently and I’ll make my own decisions.

How are you finding the industry, it’s an interesting industry, it’s very vibrant – almost a year in the role – how would you characterise it?

The telco sector is one that has gone through a period of immense regulatory upheaval and commercial upheaval, so they are a little bit battle hardened I guess from all of that. I think the main thing they are looking for is a little bit of certainty so they can get on and start to plan their business models going forward and I accept that there’s been a big period of change. They are generally very responsive to directions from the government about things that we think need to be addressing and my approach - and I’ve said this to the TCF on a number of occasions - is I would far rather work with them.

We’re lucky in New Zealand that we have a sector that is small and cohesive enough that you can talk to the sector directly. If you identify an issue that we think needs to be addressed, my preference is always to say to them first – ‘we think this is an issue, how are we going to get through it?’, and if they can come up with a solution, generally that is the most efficient way to do it, rather then us regulating over the top. But with the eventual stick that if they don’t then I’m able to regulate and I’ve made it very clear that I will.

We’re lucky that we have a sector that we can talk to that are responsive, that are very keen to work with us in a New Zealand context, I think they do that pretty well. We’ve certainly seen some interesting parallels between our telco industry and the Australian sector and the way in which they respond to different things and I think in my view we come out on the better side of that ledger. I’d rather have our industry to work with then the Australian one.

Then the IT sector is a different beast again and it’s characterised by very innovative, creative, out-of-the-box, as you would expect New Zealand companies to be. They tend to be much smaller, characterised by the ‘three guys in a garage’ as opposed to the big entity. Very agile, responsive, not restrained by what everyone else says can’t be done and as a result they are coming up with some amazing, world leading projects.

I think the one thing I try and encourage them to be more assertive with is to fly their flag because I don’t think we’re good enough at owning the space of how creative and innovative we are in the IT sector. Both in the small niche creative side of it, but also there are some very big and successful IT companies. But IT as a sector tends to fly under the radar a little bit in New Zealand.

Are you flying their flag, they’re worried about things like skills shortages.

I have a big piece of work with my colleagues in a number of areas to fly the flag, recognising that government has a role to play. One is working with Minister Chris Tremain in terms how IT companies can interact with government better and we have an ongoing conversation around that.

I have a similar piece of work with Minister Steven Joyce in terms of skills training and making sure the pipeline – to use that horrible word – is providing the skills we need coming through the system and not only at the tertiary training level, but also right through the schooling system.

I think possibly our system hasn’t been as good at that historically and possibly that’s because the people who are talking about that, the options themselves are maybe not as familiar with this as a career.

The third part of it is also working with Minister Joyce in his science and innovation portfolio. Incubator type approaches, national science challenge, innovation hubs, some of the innovation support approach through the Crown Research Institutes and the CRI interface with the Advanced Technology Institute work stream and making sure there’s a very strong digital focus. My job is to work with each of those portfolio ministers to make sure the flag is flown.

When I travelled overseas, the one I’ve done for the IT sector was through to Korea, I realised again that I had a role I could play usefully in getting into meetings and through doors that perhaps they can’t do on their own and selling that story. I was able to meet in Korea the president of Samsung Electronics and talk to him about our IT sector and it was a little bit concerning is that he seemed reasonably unaware about the NZ IT sector at all despite the fact they are using a number of NZ ICT products in their component.

I was very keen to push with him that we have this amazingly creative IT industry that isn’t looking to replicate the mass production of the Samsungs but is looking to supplement what they do. And when you think this company is making 400 million cellphone screens a year, we only need a tiny little part of that business and it’s huge. We’ve got some amazing work happening with some of our health IT specialists, particularly out of Auckland University working in Korea, on the development of health robots to work in old people’s homes. There are some neat things happening with the Natural History Museum and the real time digitising of the old archival footage.

In the international space we’re not front of mind in terms of the creativity and the talent to plug some of these gaps. So when I travel I try to push that a bit.

What about Chief Technology, we’ve got Peter Gluckman as the Chief Science Officer – what about a CTO, that would send a message to the country.

That’s fine, but if you’re just sending a message and creating a title for the sake of it. You’d have to be very clear what the role would be.

Peter Gluckman as the science advisor has been very useful because he does keep everyone focussed on the importance of science and the evidence basis for things and it is creating a different way of thinking around some of this.

One thing government is rich in is we have vast amounts of data, and in my personal view historically we haven’t been using it nearly to its full advantage in terms of understanding impacts of various policy shifts throughout the ages. There’s tremendous opportunity for some clever companies, and most of this data is freely available under our open data project, to start taking some of that data and finding clever ways to commercialise it.

One of the big growth areas is clever commercialisation of government data and turning it into some pretty cool products. Let’s look through this data archive that we’ve got and get a much better evidence based understanding in terms of what policy shifts through the years and what impact they’ve had. Immediately you’re left with how do we do that and straight away you start talking to IT companies.

In terms of a CTO, that’s something that could be developed. But we’re not just going to create the office in and of itself; we need to have a clear understanding of how it would add value. What we do have is a CIO and I guess you could say they are our go-to person but that’s much more in terms of governance positions.

What about the procurement issues?

There’s more happening in that space then I think people realise. They see the big end of town contracts that are let. My role as the IT minister is to be in his ear nagging and pestering and working on how some of this stuff can be better. We can do better in this space in terms of making our procurement easier to navigate and easier to qualify yourself up through the rankings of government contracting and I think you have to understand that if you’re a small bit player in the sector it’s pretty hard to get in. Any government agency looking to contract wants to see some history of dealings.

What about a buy kiwi made clause?

I don’t agree with that. Fundamentally it’s not my policy base and it’s not what the government believes. We believe you pick the best contract to do the work, but actually it’s also a little bit like positive discrimination. I never wanted to be chosen for a job because I was a woman; I expected to get there because I could do the job just as well as anyone else. It’s a bit the same. If we’re saying we’re going to chose a kiwi company whether or not they’re good enough - one it’s a bit dismissive, two it doesn’t encourage them to step up and be internationally competitive and three it doesn’t recognise actually the future of New Zealand is trading with the world. We can’t go back to the dark old days where we do stuff internally whether or not it’s of international standard.

What we have to do, and what agriculture has done so successfully when it lost its subsidies and lost all its free trade protections, is say ‘if we are going to compete we’ve got to compete on the world’s stage’ and I actually think New Zealand companies are not only capable of that, they’re already doing it. Why would we set up this illusion that somehow they needed a leg up in the process? They don’t and actually if you’re looking at two bidders side by side whose offering is as good as service, similar pricing points, of course the New Zealand company is going to have a natural advantage anyway because of the local base, their understanding of our cultural ways of doing things, their accessibility, their New Zealandness to do things.

I don’t think we need to start building in contractual handicapping or advantaging and I think it’s a bit insulting to suggest that the New Zealand industry needs that sort of a leg up to foot it with anyone else. What I do think we need to do is ensure our contracting is made much more approachable and user friendly, particularly in the smaller level contracts so they can get a foot in the door, qualify themselves with some smaller projects that the civil service is perhaps willing to try a little bit of an unknown on and then qualify themselves up through. I think we have to be much more open to people coming up with clever approaches and I think we’re starting to do that really well with things like the open door to innovation.

Here’s a problem we want to solve – it is very expensive process going through RFPs.

When we look at how much of the spend does go to New Zealand companies it is higher then people realise. They have this impression that it all goes offshore, which just isn’t correct. But what I’d like to see is more use of some of the smaller, niche, clever things that allow people to get an almost a win on the CV. Look at something like the development of the budget app – some little funky thing , that are a little bit different and edgy and allow them to start building the relationship. No one is going is come from a three guys in a garage and build successfully for the IRD contract, so they’ve got to build up and get capacity. The IaaS, you’ve got Revera and IBM. We’re just looking through the cloud strategy, it’s a work in progress, I accept that it hasn’t been as good as it needs, I don’t think it’s as bad as people make out but its certainly something we watch continually.

We’ve got one international cable, how do we get two – do we need two?

We’ve always said we like to see another cable, I’ve never come out and said we don’t need it. Whether it needs a NZ-US cable or an Australia-NZ cable. It’s a live issue and we’re agnostic on that and if anyone can get either up we’re interested to see it.

It was interesting to see that only five percent of the traffic going across now is NZ-US traffic anyway, so you do have to look at it and say this thing still has to make sense from a usage perspective. The fact that Pacific Fibre weren’t able to get investors over the line to build what they were proposing here does tend to suggest that the investment market doesn’t see the business case for it right now. We do have the capacity, there isn’t the pricing pressure, there isn’t monopolistic behaviour happening because if there were, that would drive the business case.

There was before Kordia starting talking about Optikor.

Prices have continually been falling but the rate card of Southern Cross Cable has been a reflection of what they’re offering in Australia and that is driven by competitive pressures. There’s always discussions floating around and I hear all sorts of things, people talking about the best options for trans-Tasman cable.

We’ve said there’s not government money available to put into build it at the moment. However, as you will be aware, we did put $91 million as a foundation customer [of Pacific Fibre] and if someone else came up with a viable project I’m sure we’d be willing to have discussions with them.

It’s all very well for people to say that the government should just write a cheque, but that’s another $400- 500 million that has to be found somewhere.

TUANZ CEO made the point that we’re in danger of becoming the world’s fastest intranet

But I don’t think we are and that’s a big íf’and that’s the point. If my view was that there was a serious capacity issue it would be an entirely different decision we’d have to make. But to sit here and add another four or five hundred million dollars to the deficit at a time when there’s actually no… I’m not saying it wouldn’t be good to have a second cable, I accept that it would but that’s a very different picture to ‘we’re an intranet’. We’re not there, that’s not the situation, and we’ll continue to monitor it. My view is that I think we will see a second cable project, be it trans-Tasman or greater, but we’ll just continue to watch it,

I get all sorts of updates, when I say updates, pieces of information flow through to me, would be probably be a better way of saying it then an update. The interesting thing was that I was looking back through the information that I’d received, literally one update said we’d be cutting the ribbon in July 2013 and the very next update we’re closing shop. So this stuff moves around fast and all over the place. I read everything that comes through and I keep an eye on it but you have to take it all with an understanding that every time you get an update, it seems to change significantly.

What’s the update with Cybersecurity?

It’s an interesting one. It sits between the prime minister and myself because there are aspects that relate to both. We have a co-joined responsibility.

The thing we’ve done recently is set up the national cybersecurity office. When I took the portfolio cyber policy was split amongst a number of agencies so some of the deliverables and the practical side came through some of the security agencies and then you had MED, as it was, doing the policy work and it was all just a little bit disjointed. What we have done is recognise that cyber policy is actually more of a central agency issue because obviously it is so diverse across so many areas. So we’ve set up a unit within Department of Prime Minister and Cabinet, called the National Cyber Policy.

The fact is that it’s a public matter, and I think that’s been a really good step because we did need to coordinate the work around that. It was, in my view, a little disconnected and I think it had to move into one of the central agencies, to give it the mana and the whole of government reach and I think that’s been a really good step forward.

While the PM has ultimate responsibility for all the security aspects I have still the responsibility for the policy work but the disconnection of those two previously was not ideal so I think this is a far better way of doing it.

Should Kordia own Orcon?

I’m not getting into that, that’s a matter for their board. That comes under the SOE minister, that’s absolutely a commercial matter. I watch it with interest because it impacts on the telco sector but I am not expressing a view on what they should do as a board.

Vodafone buying TelstraClear – any comment?

I think while that’s in front of the Commerce Commission it would be inappropriate for me to make a view on that. Given their independence it’s no appropriate for me to wade into that.

Trans-Tasman mobile roaming, are you going to regulate?

It’s been a really interesting process. Seeing the behaviour of the Australian and the New Zealand sectors while that investigation was going on was really interesting.

Trans-Tasman roaming charges are not solely a trans-Tasman issue. That’s clearly our biggest market and the obvious one to start with first, seeing that we have a close working relationship. But actually the challenges around it are inter-country regulation because we can regulate very easily in NZ. To be able to regulate in a way that protects New Zealand customers we have to be able to regulate Australian companies, which creates jurisdictional issues.

Even if we thought that the problem was solved – trans-Tasman – and I don’t think that it is, I think we have to continue to be actively monitoring it. The issue is around finding a model in which two countries can work together to address the issue. Because if New Zealand and Australia can’t make it work, I don’t think any two countries can make that work.

So this is in one sense the test bed and it’s important for both countries that we explore the ways that can best be done. And that gives us a platform to start talking to other jurisdictions. I think the clear message on this stuff is the roaming charges that we used to experience trans-Tasman, and we still experience in the rest of the world, are just not sustainable given the rate at which we travel and the rate at which we consume data.

If you start regulating between jurisdictions, that’s not going to affect things like trade treaties is it?

That depends on the terms of the trade treaties, but on the whole that’s just something that you work through case by case. The point is, first of all, is that you’ve got to have a system in which to do it, and then you’d have to go to those countries and make it work. But it starts off with a willingness from both those countries to want to do it. To the best of my knowledge I’m not aware of any trade agreements that touch on the issue of roaming charges. Although it’s an issue that is being looked at in places like the European Union, amongst their member countries and the OECD in terms of addressing whether it’s an issue.

Even Mobile Termination Rates with Vodafone, that’s got to come under scrutiny in a trade agreement?

Well potentially, it depends on the terms of the treaty.

Finally, what are you doing terms of broadband product disclosure?

My view is that technology is moving out of the ambit of just tech heads who understand this stuff. I always think of my 70-year old mother with her iPad and trying to work out her data packages. She can’t understand what she’s buying and what she’s using and how it all works and what the speed is and how to compare. Particularly as we start to get this plethora of fibre offerings in the market, I want her to say ‘which one works for me, what am I getting if I go with that one?’ I think there is room to move on that one.

Who does look after the technology/telco consumer, do we need a specific government agency?

I don’t think we need another government department. We’ve already got the Ministry of Consumer Affairs, the Fair Trading Act and the structures around that, what we’ve got to make sure is that it’s properly reflective of products as they come into the market. The Fair Trading Act wasn’t designed for things like broadband speeds and telco products. But rather then create a whole new bureaucracy; I think we just have to update the structures we have to make sure they are fit for purpose.

Comments

Comments are now closed

20 things that could happen when there’s no web monitoring software...

READ THIS ARTICLE
DO NOT SHOW THIS BOX AGAIN [ x ]