Are we winning in the digital race?

TOM PULLAR-STRECKER
Last updated 08:17 05/06/2012

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Is the Government doing enough to protect the interests of consumers? Tom Pullar-Strecker surveys developments.

The Government is going in to bat for digital-age consumers despite claims of inactivity from Labour, says Communications and Information Technology Minister Amy Adams.

Impending action on trans-Tasman mobile roaming charges and new work under way to provide better information to consumers on telecommunications services are evidence the Government is sticking up for people, Adams says.

Labour communications and broadcasting spokeswoman Clare Curran last week criticised Adams' first six months in the job, saying that aside from 15 media releases announcing ultrafast broadband (UFB) was "coming to this region or that region", she had issued only three other statements – on radio spectrum, Mediaworks and the 111 service.

"It's a bit underwhelming. So far, she appears to be the minister for opening UFB cabinets," Curran said.

Adams says trans-Tasman roaming was high on the agenda when she met her Australian counterpart, Stephen Conroy, in South Korea last month.

"What you have seen is a clear commitment from both governments to ensure trans-Tasman customers don't pay more than they should."

She expects to announce within a month to six weeks what levers the Government has and "how we address them". She says she is also sticking up for telecommunications consumers through an initiative announced in February that will seek to ensure people have all the information that they need about billing, the bundling of services and how telcos manage traffic.

The head of psychology at Victoria University, Marc Wilson, says most voters probably lump touchy digital-age issues such pay-TV regulation, Kim Dotcom, copyright law, software patents and the pricing and availability of online services into one, but he is not aware of any research into the proportion of voters for whom they were important.

"I suspect if we look around the world, we probably are a little bit behind where other countries are. I am reasonably confident if we were to ask people at the next election, `Where do digital technology issues sit for you?', it is going to be way down the list."

The Australian Government appeared to tap into a 21st-century vein of popular discontent in April when it announced a House of Representatives committee would hold an inquiry into whether Australians were paying over the odds for information technology and digital products such as iTunes music, game downloads and electronic books, in what has become known in Australia as the "price gouging inquiry".

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Senator Conroy said Australian businesses and households should have access to IT software and hardware that was "fairly priced relative to other jurisdictions". A deadline of July 6 has been given for submissions.

Adams says she will watch the review with "considerable interest".

If it emerges technology prices are high and that is a result of anti-competitive practices, she would expect the Commerce Commission to step in, she says. However, if it were simply a case of the small New Zealand market being an afterthought for multinationals, she signals a reluctance to intervene.

"It might not be a good thing, but we don't have the downsides of living in other places ... The issues of borders will become less and less relevant over time in a more connected world."

Adams says she sees it as part of her role to go into bat for consumers.

"What you have to do is think about the extent to which the Government intervenes where it is appropriate and how we do it." Curran accuses Adams of brushing aside concerns about Sky Television's "fat profits" and the impact its dominance of the pay-television market could have on the uptake on UFB. But Adams says she has heard "almost nothing from the wider public" on related issues.

"What I have heard is a lot of industry players who think it is unfair they can't do `x, y or z'. It is hardly a tidal wave of concern from mum and dad New Zealanders at this stage."

Paddy Buckley, the New Zealand managing director of Australian online subscription television service Quickflix – one of the commercial parties whose interests Adams is attempting to juggle – says the Government should lead a debate about the industry's structure.

"You have got broadcasting and telecommunications on a collision course. The legislation hasn't caught up."

He says Quickflix has attracted "many thousands" of paying subscribers since it launched in New Zealand in March even though it is offering only a third of the initial 300 hours of television programming it had promised, plus movies.

Sources say Netflix, the global leader in online television, is now eyeing the New Zealand market and either it or TelstraClear could be behind lobbying, obliquely referred to by Adams.

But she says pay-television regulation cannot be viewed in isolation. "Payment for sports rights is intrinsically linked to our ability to have various professional sporting codes.

"It is a populist easy line to say we should get in there and lay down the rules and say this is how it is going to be, but in my view the Government is a fairly large, cumbersome, blunt beast ... We do have to be careful of unintended outcomes of early stage intervention while the market is very much in its formative stages."

Buckley conceded that in a more competitive market television services risked becoming "fragmented" and consumers might find they couldn't get the programming they wanted without having to buy overlapping services.

TOUCHY ISSUES

Prices: Consumer groups claimed last year that Kiwis were paying up to 50 per cent more than United States consumers for online-distributed files and software, such as films and iPhone apps. Trade negotiations: Commentator Mike O'Donnell fears parallel importing could be sacrificed as part of negotiations with the US over the Trans Pacific Partnership trade agreement. Television regulation: Australian online subscription television service Quickflix said a lack of anti-siphoning rules, which would restrict Sky's ability to buy exclusive rights to sporting events, were behind Sky's dominance of the pay-television industry and had made it harder for competitors, such as itself, to enter the market. Software patents: The Computer Society says the Government appears to have put on ice a bill that would abolish software patents. Copyright: A law change has allowed record companies to send out about 2000 "infringement notices" to people accused of pirating music online, while debate continues over the arrest of Megaupload founder Kim Dotcom.

- Stuff

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