Red Alert

Archive for the ‘comms & IT’ Category

Beyond Chorus to the bigger picture #1

Posted by on December 19th, 2013

Who would have thought when John Key made his grand statement during the 2008 election campaign that under a National Government 75% of New Zealanders will get ultrafast broadband in their homes within 10 years; that five years later his flagship scheme would be in such deep water?

The roll-out of broadband fibre is slow. Uptake is slow. Chorus, the company charged with the bulk of the contract, is under intense scrutiny as it claims it can’t do the job it was contracted to do. The regulated price of the existing copper-based broadband is under dispute by Chorus which is demanding the government intervene and overrule the Commerce Commission’s lawful role in regulating that price according to a statutory process.

All the while the government has lurched from one reactive response to another reactive response; threatening to overturn the Commerce Commission’s lawful process, then bringing forward a review which it pretended would be of the whole broadband scheme, only to focus on just the copper price and attempt to manufacture a means to overturn the Commerce Commission.

That review is now under a legal challenge and politically the government has had to back away from its plans to legislate to over-turn the Commerce Commission because it doesn’t have the numbers. Claims the govt had no idea the Commission would regulate the copper price don’t stack up because it was Steven Joyce’s legislation and he oversaw the contract with Chorus. They have no excuse because they should have factored in the impact of a range of price changes. Either they thought they had it all under control or they completely dropped the ball.

In desperation, in September the Prime Minister claimed Chorus would go broke if the copper price dropped. Chorus denied this but became increasingly strident about its need for a bailout.

With no backing for legislation, the government was then forced to get an Ernst & Young opinion on the financial state of Chorus which showed Chorus would NOT go broke. Instead there were a range of things Chorus could and should already have done to manage its finances better.

The E&Y report spells out measures that Chorus could take to save money.

It certainly demonstrated that:
•    Chorus is NOT going broke. The report clearly shows this. Chorus has a cash flow problem and that John Key was wrong in his claim in September that Chorus may go broke if the ComCom decision stood.
•    Chorus can largely fix the problem itself. It can save money by changing its business model. Chorus can and should stop paying its dividend and raise debt, both prudent and acceptable responses. It should have been getting on with doing this already.
•    The contract does not need to be re-negotiated.
However, if Chorus is left unchecked the risks are that it could embark on what is essentially a “work to rule” strategy; slow down internet speeds, take its time to fix faults and increase its prices.

The E & Y report was solid but should be considered  interim. It is certainly not the full picture. It has two major flaws.

  1. There are strong signs E&Y have largely relied on what Chorus say without significant verification even though the Terms of Refernce required them to
  2. They have not taken into account the impact of the final Commission determined prices on both the UCLL (unbundled copper local loop) which is the access price AS WELL as the UBA (the bitstream price which is known as the copper tax). According to our information the impact of both prices could be that the copper price will rebalance to be around what it is today. The issue is the time lag in getting there and the impact on the industry.

See the next post for a breakdown on what this might mean.


Unanswered questions about Chorus

Posted by on December 9th, 2013

Update: You can put any of these questions to Amy Adams tomorrow live between 12.30 and 1.30pm on NBR’s live chat

As the Chorus debacle rolls on and the government’s role in its instability remains under scrutiny, the list of unanswered questions grows longer into how this situation has unfolded.

Questions to the Minister, to her ministry and to Chorus itself which if answered may provide illumination on how this train wreck of a situation  has come to be.

I put some of these questions to MBIE last week in the Commerce Select Committee. The answers were less than satisfactory and in some cases highly questionable. The current Minister Amy Adams, her predecessor and architect of the Chorus contract and the UFB Steven Joyce and even the Prime Minister continue to duck and dive accountability, using diversionary and reactive tactics as they try to come up with ways to keep the UFB on track and save Chorus’s bacon and their own hide.

1. Did MBIE (or it’s consultants or CFH) in 2011 calculate the likely copper price under a cost based pricing principle – if not why not?  Their own legislation created a 3 year moratorium (or regulatory holiday) on changes to copper prices.

  • What was that price or range of prices? Did they share that info with Chorus- why/why not? Did they also do calculations on the impact of averaging and the 2 year price freeze – did they share that info with Chorus – why/why not.
  • What advice went to Cabinet on this? Steven Joyce’s 23011 legislative changes to the Telco Act inserted the requirement for a move to cost-plus pricing of copper giving a three year window. What advice was provided on the impact of this change? Last Thursday MBIE officials told us in the select committee that there was some advice that copper would drop “a little bit”. How was that advice developed? And how much is “a little bit”?
  • What advice was provided to the Minister from Treasury re copper pricing/fibre. Did MBIE seek any advice from Treasury? Did the Minister? Did they offer any?

You would have thought that MBIE would have to have done the numbers on cost based copper – that  the UFB could not have been negotiated without them!  Otherwise why did the govt give a three year moratorium if it wasn’t to offset the impact of cost based copper – why wasn’t it a one year or four year moratorium – there must have been some calculations on which to base such a major decision!

2: Did any MBIE officials (including Bruce Parkes) participate in any discussions with Chorus or Mark Ratcliffe relating to the move to cost based pricing? Was the impact on Chorus discussed and what the moratorium and averaging would do in compensation?  Was there a negotiation where these things were agreed.  Was there anything in verbal discussions that could possibly have been construed by Ratcliffe  as the govt or officials saying that they would look after Chorus if the copper price ended up lower than they anticipated?

  • If Bruce Parkes participated in any of these discussions was he conflicted in the sense that he was previously a senior manager in Telecom and colleague of Ratcliffe?
  • Now that Bruce Parkes has shifted out of MBIE into DPMC, what role is he playing advising the government on these matters?

3: Re Amy Adams discussion document which is now the subject of a legal challenge by smaller Telco CallPlus  – where in that discussion document are all or any of the non legislative options that the PM says are there but nobody else can find? Isn’t it the case that the discussion document only proposes options all of which require legislation?

  • Was MBIE directed by the Minister to include only legislative options in the discussion document, if not why did they not include other options as requested by industry and users?
  • Why does the Discussion Document not follow Treasury regulatory principles?
  • Now that legislation to increase copper prices is off the table, will MBIE be recommending to the Minister that the Discussion Document be pulled? (They say no, but I want that in writing from them)
  • Does MBIE acknowledge that the section 157AA review is fundamentally flawed, and will it withdraw the discussion document and conduct a new section 157AA review once the UFB is in place;

4. Re passing on costs of cheaper copper to consumers. Has MBIE advised the Minister on price pass throughs from RSPs, especially in light of both Orcon and Call Plus saying that will pass price cuts on? Is MBIE and the Minister aware that CallPlus and Orcon have both said they will pass on the savings from a fall in copper prices to consumers. Why does she deny this?

  • Has MBIE had direct discussions with RSPs on this?

5. Re the Ernst & Young report?  Will the report released publicly contain the same information as the verbal report provided to the Minister? If not why not? How will the public be able to judge whether it is a rigorous analysis?

6. When Steven Joyce signed off the deal between Chorus and Crown Fibre Holdings for the $1 billion contract for UFB was he aware that no sub contract deals had been signed and therefore no prices agreed to between Chorus and the sub-contractors including Visionstream, Transfield and Downs to rollout UFB.

  • What material impact have those subcontract deals made to Chorus’s financial position and should Crown Fibre Holdings have ensured that information was locked in before the contract was signed?

7. What advice has MBIE provided to the Minister on how the potential renegotiation of the Chorus contract is fair to other ultra-fast broadband contractors who are fulfilling their contractual obligations without the need for corporate welfare?

  • Has MBIE provided the Minister with any advice on legal issues which may arise should the contract with Chorus be further varied to provide Chorus with a better deal than that with the three local fibre companies which are quietly getting on with the job of rolling out UFB.

These are just some of the questions which need answers. Feel free to offer more in comments


The chilling effect of TICs

Posted by on October 14th, 2013

Update: The second reading of TICs is tomorrow. It seems likely the Govt will try to rush through the committee stages and third reading this week.If so, this is an extraordinary abuse of process, because there is almost no time to consider the impact of the Minister’s SOP and to undertake the debate that needs to be had. One fo the worst things about this Bill is the refusal to have meaningful and respectful discussions with the businesses which will be most affected, or to acknowledge the impact on NZ consumers. Please help to fight this Bill’s passage.

Tell Amy Adams what you think by emailing her at: Amy.Adams@parliament.govt.nz or Selwyn.Office@parliament.govt.nz. You can contact her on twitter @amyadamsMP

Amy Adams tonight released last minute amendments to the Telecommunications Interception Capability and Security Bill (TICs). The fact that she has introduced an SOP at such a late stage indicates she and her government is concerned that there are serious deficiencies with the Bill as it came back from the select committee.

However, her amendments are not substantive and appear to be window dressing. They reflect the hurried passage of this Bill, the lack of consultation with industry and the likely consequences on the privacy of Kiwi citizens and detrimental impact on NZ tech companies and their ability to innovate.

That she is introducing an SOP at all indicates that the National Govt majority on the committee did not, or would not, consider the implications of the Bill to NZ-based and internally-based tech companies.

In particular;
Amy Adams has now signalled there will be a more rigorous assessment of the costs and benefits, including the impact of the cost on the telecommunications company of requirements under the new law. In the Labour minority report we said: “Labour notes that subsequent submissions to the select committee by several network operators outlined potential significant annual operating costs and the potential capital expenditure costs. The committee did not seek advice on these supplementary submissions and the economic impact was therefore not taken into account. In our view this was negligent and irresponsible.”

The Govt’s majority select ctte refused to take account of the warnings raised by network operators of the impact on their business by this Bill. While she is now obviously acknowledging that there may well be an impact Amy Adams needs to specify exactly what a “more rigorous assessment of costs and benefits” will involve and where the Bill will reflect that.

Labour stands by our conclusion in the Minority Report that:
There are many reasons to oppose this Bill. It is ill-thought out, rushed and the government has refused to take account of core concerns raised by submitters. There has been no case made for the expanded powers of the GCSB and of Ministers.

Below is Labour’s Minority Report following the report back from the select committee. (more…)


Are we all John Key’s playthings?

Posted by on July 2nd, 2013

Despite a consistent chorus from lawyers, civil rights organisations, telecommunications companies, and many others arguing that John Key’s new GCSB legislation (and the accompanying telecommunications interception bill) will increase the GCSB powers and sanction its role as a domestic spy agency, this is what the Prime Minister had to say in answer to question from me last week in parliament:

Intelligence Agencies—Sharing of Information on New Zealanders

10.CLARE CURRAN (Labour—Dunedin South) to the Prime Minister: Does he stand by his statement of 11 June 2013 that “I can assure the House that we do not use our partners to circumvent New Zealand laws”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Clare Curran: How can he justify his statement this week that his new laws will not expand the Government Communications Security Bureau’s powers when three telecommunications network companies, an international service provider, and the New Zealand Law Society all told a select committee today that these powers will be expanded and that they do not support this?

Rt Hon JOHN KEY: Because it is correct.

Clare Curran: How can he continue to deny the expansion of the Government Communications Security Bureau’s powers through his new legislation when the major New Zealand – based telecommunications companies, which invest millions of dollars into our local economy, told the select committee today that this will have a chilling effect on their investment and development in new networks?

Rt Hon JOHN KEY: I think the member is showing her ignorance by confusing the Telecommunications (Interception Capability and Security) Bill with the Government Communications Security Bureau and Related Legislation Amendment Bill.

Clare Curran: Are there comparable protections in his new legislation for the privacy and rights of New Zealand citizens and businesses alongside the expansion of the bureau’s powers to become a domestic spy agency?

Rt Hon JOHN KEY: I reject the member’s premise.

Clare Curran: Given the revelations last week that the Government Communications Headquarters—the British equivalent of the bureau—is attaching intercept probes on to transatlantic fibre-optic cables where they land on British shores, does the bureau intercept the Southern Cross cable or any other transoceanic system that connects New Zealand’s internet to the rest of the world?

Rt Hon JOHN KEY: I do not believe it is in the national interest to talk about those matters.

Clare Curran: Is he aware of the concern raised in Google’s submission to the select committee that requiring global internet companies based outside New Zealand to undertake interception may put them in conflict with statutory privacy and confidentiality obligations in other countries—in other words, enforcing his law might force companies such as Google to break other laws?

Rt Hon JOHN KEY: The member should direct her question to the Minister responsible. She is getting terribly confused between the Telecommunications (Interception Capability and Security) Bill and the Government Communications Security Bureau and Related Legislation Amendment Bill.

I wasn’t confused at all. Both pieces of legislation are intimately linked. As John Key knows. Tomorrow will be interesting


Too close for comfort: is the GCSB spying on us?

Posted by on June 9th, 2013

Stunning revelations that the US equivalent of the GCSB has been routinely monitoring US citizens phone calls, texts and activity on social media impacts on directly on Kiwis with two new laws being hurriedly pushed through out parliament.

Reports say the US National Security Agency (NSA) is collecting metadata on tens of millions of US citizens on phone calls. And it has now been confirmed  that NSA also uses a program called PRISM to access extensive user content  held by Google, Facebook, Microsoft, and Apple: although targeted at non-US citizens, it includes content for US citizens too.

The Government must allow more time for submissions to allow citizens and organisations and the telecommunications and IT industry more time to consider the implications and make submissions.

John Key must front the public (as Barack Obama is doing in the US and David Cameron is being pushed to do  in the UK) to tell New Zealanders whether information about their communications is routinely able to be accessed by the GCSB NOW, and just exactly what extra powers they will have under the new laws which will impact on the privacy and freedoms of us all.

The government would have us believe this is an over reaction. If you don’t believe me read this summary of what has been revealed since last Thursday. And then read this piece by a Kiwi Lawyer who has grasped the implications for New Zealand.

Submissions on both the Government Communications Security Bureau and Related Legislation Bill and the Telecommunications (Interception Capability and Security) Bill are due next Thursday 13 June.

The submission period must be extended to give New Zealanders more time to consider the implications of both bills which will give the GCSB and other agencies more powers to undertake surveillance on New Zealand citizens through all forms of communications as a matter of course.

That is far too short a period of time for such critical pieces of legislation. Both bills are being hurried through the House and the ability of citizens concerned about civil rights and personal privacy has been removed with one of the Bills to be considered behind closed doors with no public discussion.

This is simply intolerable in a democracy where  New Zealanders have ultimate power over the way they are governed.

 

 

 


The law (of NZ) according to Kafka

Posted by on May 21st, 2013

The world’s gone mad! I hear that a lot. Now I’m starting to believe it.

In our own parliament there are a series of laws being introduced (under urgency) which are not able to be properly scrutinised because the advice from officials about their impact is apparently too sensitive for us mere mortals to behold. The long term ramifications of this are not good for our rights as citizens; our privacy and our ability to trust our government.

Andrew Geddis has written eloquently about this, in particular with regard to a  law passed at the weekend which laid out the (deeply inadequate) terms upon which carers could be paid to care for severely disabled family members. The basis of the legislation  is highly questionable but the ability to debate that and any legal risks has been curtailed by the removal (or redaction) of this important official advice from the publicly released Regulatory Impact Statement (or RIS). Keith Ng at Public Address said much the same thing only in less words and in more colourful language.

There has been a growing and disturbing pattern emerging in this government to blatantly redact important information from publicly available documents. The removal of important information from a Regulatory Impact Statement reaches new heights however as it effectively nobbles the Opposition members of parliament in being able to debate and vote on the law in our parliament.

The Disability Bill was the third Bill introduced into the House within a week which removed large tracts of critical information and advice from the Regulatory Impact Statement. I say “critical information and advice”, but we can only assume it was important and critical because we simply don’t know, as it has been removed from the public eye.

The passing of these laws are therefore unable to occur with the full knowledge of their impact on our supposedly democratic and open society.

The first was a Bill which allows the Government Communications Security Bureau (GCSB)  to assist the SIS, Police and Defence Force to spy on New Zealand citizens and residents, as long as it has the approval of the Prime Minister of the day.  Its Regulatory Impact Statement doesn’t even pretend to contain any real analysis of the risks for human rights, free speech and individual privacy. It boldly says there has been no consultation with the public. The hearings on this bill are very short and will be heard by a special select committee of party leaders. The likelihood is remote of all party leaders being available to hear submissions and then pay the required attention  to ensure good law-making about such an important and controversial matter in such a short time.

The second (which is linked to the first) is the Telecommunications (Interception Capability and Security) Bill which allow the GCSB and the Government extraordinary powers to intervene in a Telco network; from how it is designed, to how it operates in NZ. Should you be charged, then some evidence against you may be too secret (for you) to even hear. This Bill has two Regulatory Impact Statements: here and here. Both are heavily redacted.

In particular, look at page 9 of the  New Framework for network security which sets out the risks of the legislation: Unfortunately, the public is not allowed to know what most of those risks are because they are withheld. The period during which the public can provide submissions has been shortened from six weeks to five. We are now in week two. I urge everyone with an interest in our telecommunications frameworks and in robust democracy to submit.

It’s stranger than fiction. And immensely disturbing for our so-called Open Nation. Consider this:

In Franz Kafka’s The Trial; a man is arrested and prosecuted by a remote, inaccessible authority, with the nature of his crime revealed to neither him nor the reader.

His guilt is assumed, the bureaucracy running it (the remote inaccessible authority) is vast with many levels, and everything is secret, from the charge, to the rules of the court, to the authority behind the courts – even the identity of the judges at the higher levels.

Under the passing of these two laws, this could be our new reality. How did we get to this place? And what are we going to do about it?

 


Should notification of data breaches be mandatory?

Posted by on April 3rd, 2013

The Privacy Commissioner Marie Shroff last week told us that public trust is being eroded by government sector breaches. She said  government agencies have huge databases of information which the public is forced to provide, and in return they need to look after that information properly and that public sector agencies needed to have stronger controls in place when handling spread sheets of personal information.

Last year she warned us that the public sector can’t afford to be complacent. It’s quite clear that agencies holding large amounts of personal information need to place greater value on that information asset. They need to develop strong leadership and a culture of respect for privacy, as well as day to day policies and practices to provide trustworthy stewardship of our personal information at every level of the organisation. There has been far too little focus on the fact that there are real people behind the masses of information that government agencies hold.

Data breach notification isn’t currently required by law, but the Law Commission recently recommended that it should be made compulsory where breaches put people at risk. That would bring New Zealand law into line with practice overseas.

The private sector has warned repeatedly that New Zealand has a major problem with information security, and a strategy released late last year by a group of  IT security professionals said that although technological innovation is high within the New Zealand market, the national spend on educating, training, and developing skilled technical personnel is surprisingly low, creating an imbalance and directly contributing to the fragility and vulnerability of our nation’s IT systems. If that is not a significant warning, I do not know what is.

Last week the chief executive officer of the  Institute of IT Professionals, Paul Matthews, said that the Earthquake Commission had failed Security 101 and that it was  mickey mouse stuff that such sensitive information could be sent so easily to an outside person.

We are daily finding out about more data breaches, which indicates that they are commonplace.

The solutions aren’t off the shelf, but the Government’s refusal to treat the breaches as systemic, requiring the highest attention is very concerning.

The reason for many breaches will no doubt lie in the way each department and agencies IT systems have grown. Privacy and security systems are unlikely to have been built into these systems from the very beginning. Many issues can be resolved through training people using the systems in simple procedures to protect data. IT solutions exists to provide password protected spreadsheets being sent out as attachments and sometimes to prevent email attachments fullstop.

An across government response is required with a Chief Technology Officer with clout responsible to the Prime Minister. Our approach to information security is 20th century and inexcusable. I fear the public service is ill resourced to deal with the ongoing breaches we have faced and will face.

Instead, we have a Prime Minister who shrugs his shoulders and dismisses the breaches as “inevitable, human error and a trade-off”. He may rue those remarks.

NB: have attempted to contact Threat Toons for copyright permission. But have repeatedly been blocked from accessing their site. Might be the title. Happy to continue trying


Where is our digital ambition?

Posted by on January 30th, 2013

Why aren’t we defining intellectual property as an integral part of our economy?

Our future prosperity will be carved out by backing the talent of businesses working in high tech. Kiwi businesses. A thriving manufacturing sector is at the heart of Labour’s vision. A weightless economy is integral to that.

The manufacturing inquiry is integral. So is getting our Patent laws right. Quantifying the strength of our Intellectual property sector might kick start us to realise our own worth.

Here is my speech tonight in the debate on the Prime Minister’s speech. The hands off, leave it to the market approach  of this government has failed all over the world. It’s clearly failing in New Zealand.

 

 

 


US Virgin

Posted by on September 19th, 2012

Tomorrow I take my first trip to the US. I am enormously privileged to be part of a group of people from multiple nations who will consider the importance of intellectual property rights in the global trade and business communities.

For some of you that might sound deadly dull. For me, it’s the opportunity of a lifetime to have look at the impact of technology on how we live our lives and how our new economy is emerging. And how a thinker, a policy maker and legislator from New Zealand might be able to absorb information, get a few ideas, have a few arguments and come up with some concepts that could add value to New Zealand.

I am sponsored by the US State Department.

I will post some thoughts along the way.


Who influenced Craig Foss to change the patents bill against our Kiwi software industry?

Posted by on September 13th, 2012

The debate in the second reading of the Patents Bill yesterday afternoon was intense.

At the heart of it was why Commerce Minister Craig Foss had made, what on the face of it, seemed like an ill-conceived decision to change the wording of a key clause which will affect our local software industry adversely. By moving away from a position which blankly said a software  program could not be patented, he has qualified this hugely by adding the following:

..prevents anything from being an invention for the purposes of this Act only to the extent that a patent or an application relates to a computer program as such

The “as such” change opens to the door to big multinational corporates being able to take advantage of an ambiguous clause to dominate and stifle smaller innovative software developers in court.

Foss claims it won’t. Labour, the Greens and NZ First claim it will. We don’t know what the Maori Party, John Banks and Peter Dunne think yet. I hope they’ll look at it carefully and listen to local developers.

The Kiwi software industry certainly thinks it will affect them badly. They put together a petition and in just 4 or five days with almost 1100 signatures asking the Minister to reconsider. And it might be worth noting that among the 1100 signatories are some of our biggest software innovators; Jade, Orion Health and Xero (PS: Xero didn’t sign, but their head of design did).

Now it emerges that, despite the on record commitments of previous Commerce Minister Simon Power since 2010 that the recommendation by the Commerce Select Committee to exclude software from patentability would stand, there were backroom meetings with the multinationals from the moment the Bill was reported back to the House, pressuring the Minister and officials to change their minds and open the door to software patentability.

Somehow the language used in Craig Foss’s amendment  is precisely that requested by those lobbyists. This “as such” language both undermines the software exclusion to the point where software is, in fact, patentable, while at the same time it’s asserted to be the best language to implement a software exclusion? One of those positions is false. We know – and the pro-software patent lobby’s support for it is ample verification – that the “as such” wording will rapidly be used to circumvent the software patent exclusion.

Here’s the evidence. A blog post by NZICT, which represents those multinationals, including Microsoft and IBM specifically, requested that the Ministry of Economic Development change its language to that used by the European Patent Convention “because that language can easily be circumvented” and in effect undoes the software patent exclusion. The NZICT Group (claimed to have) had assurances from the MED that it was never the ministry’s intention to ban software from patentability in any case.

Note: this blog post has since been taken off the NZICT website. I wonder why?

Labour yesterday tabled this blog post in the House during the debate and raised questions about how this backroom deal was done and why the select committee’s intent had been circumvented and hijackedby the multinational’s agenda against the interests of our local software development industry.

It’s worth noting that the main MED actor in all of this is Rory McLeod, who is also the main IP negotiator on behalf of MFAT in the TPPA negotiations. Coincidence? I think not.

What does the government think it’s doing stifling our most important innovators. This is bloody ridiculous.

The Foss amendment now provides the pro-patent multinational lobby with exactly what they specifically requested in June 2010.

Yet somehow Foss and MED are trying to sell this as the most certain way to ensure a software patent exclusion. It can’t be both.

The Kiwi software developers vehemently oppose the Foss amendment because they believe that they will be vulnerable to multinational corporate patent suits on software inventions. This has proven the case in the European jurisdiction.  There are hundreds of comments on the petition website from Kiwi software developers about this.

I have been contacted directly  in the last few days by a Canadian software company which has planned to relocate to NZ because of the patent ban on software because it was a better environment in which to innovate.

I was told late last week about a synthetic biology start up which is a co-investment of $170m between NZ and Taiwan. It came about because NZ was seen as being proactive for digital start ups because of this Patent Bill sitting on our books.

In the US over the last 20 years, its been estimated that the cost to the US economy of patent litigation is half a trillion dollars. We don’t want the US system because it’s all about patenting this and that and patenting trolls who trawl the planet looking for inventions they can pretend to have ownership over. We don’t want the European system as it stands either. It’s the European system whose ambiguous “as such” has resulted in 30 years of expensive litigation, and has resulted in most software being patentable despite that being contrary to the spirit of the legislation.

What we want is a law that’s as clear and unambiguous as we can make it. That protects our innovators and allows the physical invention to be patented (such as a washing machine) but keeps the software code which runs the washing machine protected by copyright and not by patent.

The moment the prospect of patent litigation looms on the horizon, there’s only one group who benefits and that’s patent lawyers who can tie companies up in the courts for years. The big corporates don’t mind as they are protecting their market share and stifling competition.

Copyright adequately protects software development.

Software is lines of code, like music is lines of notes, or books are lines of text. Software is a collection of mathematical equations. In order to create new software you have to build on existing software.

Everyone – including National – has accepted that software patents should be excluded – I don’t think that’s being re-litigated here. What we need to take National to task for is the fact that the way they have chosen to implement the software exclusion won’t, in fact, work. Moreover, it appears that they’re consciously adopting the means for implementing it which fundamentally undermines their stated goal.

How can they claim, with a straight face, that the wording of the bill requested by the pro-software patents lobby – because it effectively reverses the exclusion – is the best way to exclude software patents? The same language can’t achieve both ends. It appears that, either due to incompetence or malice, the Minister and/or his advisors have adopted language which fundamentally undermines their stated aim of excluding software patents.

As I said in my speech in the House yesterday (9 minutes into this clip), we need to encourage our innovators not stifle them. Labour hopes the government will work that out before this Bill passes.

Patents exists purely to provide an incentive for inventors to create for the greater good. Patents categorically DO NOT exist “to protect an inventor’s investment”.  Given that the software industry has spoken decisively about the language it wants to use to implement the broadly supported ban on software patents, why not accept that these people have done their homework.

Given that they are the ones who will have to live with this legislation from day to day, let’s accept that the kiwi software industry has offered better language for the software patent exclusion than the pro-software patent lobby’s preferred language proposed by Foss’ ill-advised SOP.

That’s why I moved an amendment this week to follow this statement:

10A(1) A computer program is not an invention for the purposes of this Act.

My amendment simply says

10A(2): Subsection (1) does not prevent an invention that makes use of an embedded computer program from being patentable.

This means a computer software program is not patentable. Fullstop.

Two observations:

  • Comms and IT Minister Amy Adams claims her portfolio has nothing to do with software and patents. Extraordinary as she claims to represent the software and IT industry.
  • David Farrar on Kiwiblog has been very silent. Would love to know what he thinks

How serious is the digital divide?

Posted by on July 25th, 2012

Have been sitting in the Education  Select Ctte for the last month or so, hearing submissions  on an inquiry into 21st century learning environment and digital literacy.

Am increasingly concerned at the consistent message to us that there is:

1. A digital divide in NZ where some schools have much better connectivity, access to technology and children are taught in an environment which incorporates the digital world, compared with schools that don’t have much of either.

2. This divide is growing, not lessening as broadband rolls out slowly to schools, prioritising higher decile areas. That the digital learning environment is not consistently supported across schools.

There have been some great examples of schools that are early adopters, have talented and committed staff which are driving change in how technology is used and the way teachers teach. But it’s not consistent.

It’s becoming clear that the learning environment and the digital environment are intertwined. Our kids need digital skills for their futures. There are however some significant barriers to this occuring.

Quantifying NZ’s digital divide is critical.


Asking the questions

Posted by on June 18th, 2012

You might remember a couple of months ago there was a flurry of public scrutiny on the National Government’s stonewalling on what it knew about the Chinese company Huawei’s involvement in the roll-out of ultra-fast broadband.

The Australian Govt had blocked Huawei from bidding for contracts to supply services to its massive ultrafast broadband scheme claiming issues of national security. In contrast, the NZ Govt turned a blind eye to Huawei’s involvement here. And refused to comment. Much.

Then a few weeks’ ago, Economic Development Minister Steven Joyce announced a whole of govt deal to save money on mobile phone costs across multiple departments. It included the involvement of 2 Degrees, NZ’s reputable third mobile phone provider, but which has equipment and services provided by Huawei.

Meanwhile, in the US Senate last week, questions continued to be raised about Huawei. Please explain letters have been written to Huawei’s CEO and Chair.

I think it’s valid to continue to ask the questions of the New Zealand Govt. Here’s what I asked Amy Adams (the current ICT Minister) in parliament last week:

Clare Curran: Is she aware of concerns raised by members of the United States House of Representatives Intelligence Committee this week regarding the possible national security threat posed by the potential expansion of Huawei into the US telecommunications infrastructure; if so, has she received any reports about the national security implications of the all-of-Government mobile phone procurement contract recently signed by Steven Joyce, which includes services provided by Huawei?

Hon AMY ADAMS: As that member is well aware, we do not comment on matters of national security, but I can assure her that we take network security very seriously.

Clare Curran: I seek leave to table an article published on 13 June in Computerworld , titled “US lawmakers quiz ZTE, Huawei over spying concerns”.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Clare Curran: I seek leave to table a media release by representatives from the US intelligence committee about concerns about the investigation of Huawei and ZTE.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Clare Curran: I seek leave to table the correspondence between the US House of Representatives select committee on intelligence, and the chairman and senior vice-president of Huawei Technologies.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

  • Document, by leave, laid on the Table of the House.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You would have heard the Minister’s answer. She said: “we do not comment on issues of national security”. However, the very point that the member is asking about is that given Steven Joyce has signed a document that says it is not a matter of national security, why, then, can the Minister not answer the question? Mr Joyce and National have assured us that Huawei’s involvement is not a matter of national security. Therefore, why can the Minister not answer the question she has been asked?

(more…)


Amy Adams scorecard… part 2

Posted by on May 21st, 2012

It’s been almost six months since the election and Amy Adams being appointed Communications and IT Minister following on from Steven Joyce.

Yesterday I posted on Adams’ activities since being made Minister. Opening ultrafast broadband (UFB) cabinets around the country has been a major activity. It hasn’t yet translated into people connecting to broadband. This is likely to become a serious risk for the government next year when the rubber meets the road on just how many people are connected to fibre.

Enthusiastic PR launches are one thing. But when it comes to addressing the serious competition issues which will impact on the uptake of the UFB by consumers, arguably one of the biggest issues in her portfolio, Adams has taken curiously contradictory views.

Back in February, at a Commerce Commission-organised conference , an issues paper on demand for faster broadband, entitled “Content and Willingness to Pay.” said bundled pay TV services had been a key factor in speeding fast broadband uptake overseas.

Much of the conference focussed on the role played by  Sky TV which has made its MySky (and pending TVNZ joint venture) igloo boxes fibre-capable. But, as as has been reported, with its satellite business bringing in fat profits, there’s little motivation for it to provide content-over-fiber – at a price that would get households jumping to upgrade from copper. In the meantime, it was argued by many, Sky’s deals with internet service providers were a barrier to allowing other content providers fair access to the New Zealand consumer.

At that time Adams brushed aside concerns and  poured cold water on the prospect of regulation mimicking her predecessor Steven Joyce and saying:

While I will be closely monitoring issues that might limit uptake or the effective implementation of faster broadband, I expect industry to show leadership in resolving such issues.

Where that does not occur, I’m more than prepared to step in, but I’m also aware that regulation can be a blunt tool. It is my view that in most cases, industry-driven solutions are better for industry and customers, and are more enduring. One such example is content.

… I will signal now that I’m cautious about reaching for regulation as a solution at this stage when it is still too early, in my view, to anticipate how the competitive content market will look in a UFB environment.

There have also been calls for a single regulator for broadcasting and telecommunications to deal with issues of this kind, but I’m equally sceptical about the benefits of shaking up the regulatory structure to deal with an issue that has yet to form into a clear shape and which the markets may yet solve. The Prime Minister has used the expression of it being a solution in search of a problem and I share that view.

Last week the Commerce Commission gave the green light for Sky and TVNZ to progress the Igloo joint venture,  which has been described as Sky Light. But it also interestingly announced a surprise investigation into Sky TV’s content partnerships with internet service providers.

Cuirously Adams had this to say on Twitter:

ComCom inquiring into Sky’s control of content market. Always my view that was within their jurisdiction so good to see will be looked at.

I wasn’t the only one to scratch my head over this statement. Not only did it contradict her earlier statements which were that it was no business of the regulator to look into the content market. But she delivered the view on Twitter with no other accompanying statement. Changed her tune?

Tom Pullar Strecker writes in the DomPost about this today. It could be that the government has finally woken up to the fact it has been on the wrong side of this issue. It could be that Adams doesn’t understand the implications of what she said. Seems a bit confused at best.

It’s more likely she’s under instructions from Steven Joyce to change her tune because he sees the writing on the wall for regulatory change.


Amy Adams scorecard… part 1

Posted by on May 20th, 2012

It’s been almost six months since the election and Amy Adams being appointed Communications and IT Minister following on from Steven Joyce.

One of the first things she did in her portfolio was to refuse to release much of the Briefing to the Incoming Minister from her department, MED. The industry, the public and the opposition were refused access to the whole of her proposed actions and workplan for the first six months of this year. I took a complaint to the Ombudsman which, because of their enormous workload, has taken sometime to process.

I am hopeful we’ll soon get to see some of that workplan. In the meantime, here’s an appraisal.

Since 10 February 2012,  Amy Adams has issued 15 releases announcing the ultrafast broadband is coming to this region or that region; there will be exciting new broadband services in rural NZ, etc etc…

However, when I asked the Ministry before the Commerce Select Committee recently  just how many schools had been actually connected to ultrafast broadband, the answer was” around 34″. Amy Adams doesn’t seem to have been up to much except travelling around the country announcing that ultrafast broadband is coming.

When you look a little closer, it’s going to be quite a while before most places see anything change. Her announcements are merely PR exercises to make it appear that Steven Joyce’s great broadband scheme is on track. The big test will be how many people actually connect because they can a) afford it and b) it’s worth their while to make the change due to interesting new content and services.

Many schools I speak to are deeply sceptical because of the cost involved in making the transition which is largely being foisted onto their operating budgets and the resourcing of teachers and students through ICT training and access to digital devices.

In the last six months, Adams has made just three other announcements. One around spectrum, one on Mediaworks and one on the 111 service. It’s a bit underwhelming. So far, she appears to be the Minister for opening UFB cabinets.


The internet. The new frontier

Posted by on April 1st, 2012

Vanity Fair on who should/could control the internet and whether it’s even possible to. Affects all of us. Great graphic. Worth a read.

World War 3.0

TWO FUTURES? Privacy, piracy, security, sovereignty—the divisions on these issues reflect an even deeper split between those who want tight control and those who want unfettered freedom.

When the Internet was created, decades ago, one thing was inevitable: the war today over how (or whether) to control it, and who should have that power. Battle lines have been drawn between repressive regimes and Western democracies, corporations and customers, hackers and law enforcement. Looking toward a year-end negotiation in Dubai, where 193 nations will gather to revise a U.N. treaty concerning the Internet, Michael Joseph Gross lays out the stakes in a conflict that could split the virtual world as we know it.

Stephen Doyle
Read the rest here

Huawei. Australia takes action. New Zealand says no issue here. Why?

Posted by on March 30th, 2012

This morning it has been revealed in the Australia/NZ tech publication Comms Day that:

The Australian Government has begun secret talks with carriers on proposals to enhance the security of Australia’s telecom infrastructure which would, in part, mandate a penalty-backed requirement on operators to secure their networks against external threats and require risk assessments of key infrastructure upgrades, modifications and procurement decisions.

CommsDay also understands that the government is highly concerned by the offshore dissemination of Australian citizens’ private data and calling information for use by customer service centres in locations such as India, Sri Lanka and the Philippines. This could lead to a requirement for all data to be housed onshore. The recent discussions likely explain the timing of the revelation last Saturday that Huawei Technologies would be barred from supplying the National Broadband Network.

In recent weeks, representatives of major Australian operators were called to a confidential roundtable meeting with government officials from the Departments of Attorney-General and Broadband, Communications and Digital Economy to discuss the proposed measures. These include a notification process of infrastructure purchase decisions and upgrade or modifications to networks which may have national security implications. Infrastructure builds would potentially be subject to scrutiny or what is termed “risk assessment” under the arrangements with a key focus on details regarding suppliers. Existing infrastructure may also be subject to the reporting process.

The Prime Minister, the ICT Minister Amy Adams and her predecessor Steven Joyce are directly accountable for the actions and inaction of New Zealand to respond to warnings and advice from our security agencies.

The security and integrity of our telecommunications and new broadband infrastructure is a matter of utmost national importance. Cyber security is the new frontier and all countries take it extremely seriously. Despite the lip service paid to it by our government, it appears they have ignored advice and this may have the potential to undermine and compromise our infrastructure.

There are questions to be answered. John Key and Amy Adams must answer whether they received advice comparable to the advice given to Australia, when they received that advice and what actions they have taken since. Steven Joyce is also accountable in his former role as ICT Minister.

I am not party to the advice. But as the Opposition spokesperson for Communications and IT I am raising what I think are valid questions. Why has our approach to this issue been so markedly different to Australia’s? Surely alarm bells must be ringing in the government. What are they doing about it?

Yesterday I would have asked this question in the House to the Acting Prime Minister had Winston Peters not chosen to withdraw his question given John Key was not present.

Does he agree with The Australian newspaper’s Foreign editor Greg Sheridan who said today that if David Irvine, the head of ASIO, Australia’s intelligence service, and who is a former Australian ambassador to China,  had authorised a judgement to be cautious on Huawei, then it was certainly sound. And if so, did he receive the same advice and why hasn’t he acted on it?

It’s worth reading Greg Sheridan’s piece.

Paul Maley’s piece in The Australian is also worth reading . He revealed yesterday that:

BRITAIN’S intelligence services were forced to erect a costly, resource-intensive auditing structure to ensure Huawei did not steal secrets after the Chinese telco was allowed to take part in a British broadband project.

Given that New Zealand defence analyst Paul Buchanan has made some very strong statements in recent days about the importance of these issues the Prime Minister needs to answer this:

When did he become aware of what defence analyst Paul Buchanan has described as the “collective view of the security community”  in the US, Britain and Australia that Huawei is almost certainly a front for Chinese intelligence services, and  what actions has he taken as a result of hearing this view?

Today, Australian PM Julia Gillard is reported as sticking up for Australia’s national interest. I wonder what ours is doing?

“I’ve stood up for Australia’s interest. I know the opposition is standing up for the interests of a Chinese company,” she said while in Sydney for an announcement on the NBN.

“We’ve made the decision in the national interest. Any suggestions this is in breach of our trade obligations is simply untrue.

“We’ve got a strong, robust relationship with China. We are deeply engaged at every level, we have a strong economic relationship, we have increasing ties at every level — diplomatic ties, multilateral ties, and you will continue to see our relationship with China strengthen and grow.”


Fingers in her ears

Posted by on March 29th, 2012

Is Amy Adams just doing what she’s told or does she have her fingers stuck firmly in her ears?

Perhaps she just genuinely doesn’t want to know the reasons for Australia refusing to allow Huawei to tender for its massive broadband supply contract because that would give her a massive headache and require her to do something about it.

The new ICT Minister  had this to say today:

The Minister responsible for overseeing the roll-out of ultra-fast broadband in New Zealand says it would not be appropriate for her to ask Australian authorities why they banned a Chinese company from working on an Australian project due to security fears, despite that company having won contracts to install broadband infrastructure here.

Read the rest here and watch how she says the same thing over and over again.


Does the Commerce Commission have what it takes?

Posted by on March 27th, 2012

Twelve days ago the Commerce Commission announced an investigation, under Section 47 of the Commerce Act, as to whether the new pay TV platform Igloo, a deal between TVNZ and Sky, breaches merger rules.

It was, on the face of it, a show of independence from our competition watchdog, which states its core purpose as achieving the best possible outcomes in competitive and regulated markets for the long-term benefit of New Zealanders. Not monopolies, or big business, but New Zealanders.

Labour encouraged the Commerce Commission to extend its investigation beyond section 47, which deals only with acquisitions. We believe it should encompass all relevant parts of the Commerce Act, including section 27, as to contracts and arrangements substantially lessening competition.

Particularly relevant is the market power that Sky already has as it also owns Prime, a free to air channel, something many countries do not allow to happen. And it’s not only the possible stranglehold that Sky has on content delivery via the traditional broadcast distribution networks, but also via the  internet. This isn’t under investigation. Yet. Some might argue it should be.

The Commission’s investigation is not public. But it’s significant. The big question is will it use the opportunity to have a good look at the state of competition in the broadcasting (or video content) sector. In particular, whether the New Zealand consumer is being best served by the dominance of one or two large players in how they can receive video content via their TV screens and how that dominance is likely to flow on when we all start to connect our televisions to the internet via ultrafast broadband.

In many other countries consumers are able to command choice of providers of overseas content. In New Zealand we have Sky.

In Australia there is currently fierce debate over the  rules that keep major sports events on free-to-air TV. Communications Minister Stephen Conroy is introducing a law to ensure the biggest games are accessible to all viewers. This is an extension to the existing anti-siphoning legislation in Australia. There is no such equivalent here and we are nowhere near even having that discussion.

We take what we’re given and if we complain we are told that there’s plenty of content on line. Consequently some consumers download their favourite shows and movies from the internet and watch on their computers, bypassing the bigger screen. Often illegally, as some shows aren’t available here via legitimate means. Most of our internet service providers now have deals with Sky.

There are two important issues at play. One is the issue of competition and encouraging other players in the market because that can only be good for consumers. The other is a cultural issue. That’s what anti-siphoning laws are really about – ensuring people get access to content that is cultural in nature and about who we are as NZers. That’s invariably sport.

There’s been a bit of discussion in the media in recent weeks about the alleged stanglehold that Sky has on our video content market. Chris Barton wrote in the NZ Herald that “suddenly internet providers all over New Zealand are providing unmetered plans for Sky’s video content. You can download unlimited data – as long as it’s Sky”.

Sarah Putt has written extensively in Computerworld on these issues with this piece and last week with this piece which took aim at the detail of the contracts between Sky and the ISPs.

The big question is whether Sky’s exclusive deals have the effect of preventing other contracts to provide online audiovisual content that compete against Sky. The Igloo deal with TVNZ is a means for the pay TV provider to capture another market at a lower entry price which can potentially be upgraded to a fuller service. Given the convergence of the internet and broadcasting environments this positions TVNZ and Sky to potentially dominate the market in coming years and could prevent other existing and new players providing competition.

The Igloo deal could just be the tip of the iceberg if it means that competitors like Netflix or Hulu can’t enter our market and do deals with internet service providers like Telecom, Vodafone, TelstraClear or Orcon because they’ve been locked out of the market by exclusive clauses in the contracts they have with Sky. Sky denies this.

A couple of year’s ago the dominance of Vodafone and Telecom in our telecommunications mobile phone market was challenged by new entrant 2 Degrees which invested millions, yet found itself squeezed out by the Auckland-centric monopoly of Vodafone and the Southern monopoly of Telecom. A broad alliance of consumer groups including students and farmers forced Commerce Commission intervention.

Labour consistently called for more fair competition in that market. Since then, the competition in the mobile phone market is  more robust, the consumers are getting a better deal and all three players are operating in the market.

Not so in the broadcasting space. We are about to lose TVNZ7, our only public broadcaster. TVNZ has become aggressively commercial and since its recent deals with Sky, has made a conscious decision to back away from calls for greater competition. Some might say they’ve been bought off.

Mediaworks (TV3), which is struggling, but still manages to produce quality content on a shoestring budget, is a voice for greater competition. Along with the ISPs and countless industry commentators. Recently some prestigious overseas commentators expressed surprise, even horror, at the skewed and monopolistic nature of our broadcasting, or content sector.

Last month Carleton University professor Dwayne Winseck told the Commerce Commission’s conference on the demand side of the fast fibre networks in Auckland that New Zealand was viewing its telco market through “rose tinted glasses” and needs to get real about data caps, peering issues and the dominance of Sky TV.

I don’t know about rose tinted glasses. I think it’s more that our head is buried firmly in the sand.

The recent articles in Computerworld including interviews with Sky CEO John Fellet pretty much confirm that the contracts between Sky and some telcos restrict net neutrality and arguably stifle competitors, but the Telecommunications Act might be read as excluding content considerations unless it’s video-on-demand. So the concern is to make sure that different parts of the Commerce Commission don’t expediently assume that the hot potato of audiovisual content markets is the other’s problem to deal with.

How the Commerce Commission treats this issue is important. There’s a lot of pressure from the big guns, particularly Sky, to keep our heads stuck in the sand. It seems the government concurs. The new ICT Minister is following Steven Joyce’s lead (instructions?) by insisting there’s no problem and we should continue to allow the skewed market to have its way.

They should be mindful of the metaphor of the boy who stuck his finger in the dyke.

In the meantime, many New Zealanders, frustrated by the lack of quality and up to date content through legal channels are increasingly turning to downloading via the internet.


Whose nightmare ?

Posted by on February 26th, 2012

I’ve had a bit to do with the Computer Clubhouse movement. Some seed funding and a building back in the day when I was Minister of Education.

Went to the second birthday of the Naenae Club (thanks Hutt City) and within a couple of minutes I was cloned by the kids.


A slightly scary #techfact

Posted by on February 15th, 2012

The Number Of Mobile Devices Will Exceed World’s Population By 2012 (& Other Shocking Figures)

multiple-devices-2016

Despite its long and boring name, Cisco’s “Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update” is one of the more fascinating data-filled reports you’ll read this year. The report examines the dramatic growth we’re seeing in the mobile Internet space, including the massive demands for mobile data, the growth of mobile video, and the rise of the smartphone as new gateway to the web itself.

Globally, mobile data traffic grew 2.3-fold over 2011, more than doubling for the fourth year in a row. The traffic even grew faster than Cisco had earlier predicted: they had pegged growth at 131% year-over-year. In actuality, traffic grew by 133%.

In 2011, mobile data traffic was 8 times the size of the entire global Internet in 2000 (597 petabytes vs. 75 petabytes). That was only a dozen years ago, but it may as well have been eons.

Read the rest of the article here

It will be interesting to find out the actual deal that’s being done between the government and Google, which John Key has described as smart phones replacing the work currently done by our public servants.

These trends are pretty interesting and there’s no doubt that the handheld device will become the gadget of choice for most people as they become more affordable and getting access to data becomes easier.

Makes you wonder about the government’s big ultrafast broadband scheme, where Telecom (I mean Chorus) gets to dominate the roll out and Sky gets to dominate the content provision. Maybe Google will dominate the public sector, replacing Microsoft.

Maybe if the government cared to share their thinking with the public, and if the new communications Minister Amy Adams was willing to share her work programme over the coming months instead of keeping it all a big secret, we’d all be able to to discuss whether what’s being planned is a good idea. Cutting services and replacing people with smartphones seems to be the guts of it at the moment.

Maybe Google might care to share.