Lines drawn in the sand: The political economy of New Zealand telecommunications 1987-2001

This thesis is a political economy of New Zealand telecommunications 1984 --2001. New Zealand’s nationally constructed telecommunications system was radically reformulated between 1984 and 1991, beginning with partial deregulation of the network in 1987, and ending with the privatisation of Telecom New Zealand Corporation in 1990, leading to one of the most deregulated telecommunications environments in the world. This thesis argues that the New Zealand telecommunications ‘market’ was primarily established, maintained and manipulated through political processes. This did not occurred due to inexorable forces of globalisation; nor do economic or technologically deterministic accounts for these changes bear scrutiny. Telecommunications reform was enforced by a ‘strong’ state under conditions of limited democracy. Between 1991 and 1999 the ‘light-handed’ regulatory model was adhered to by successive governments even though it was shown to be demonstrably flawed. Throughout this period benefits that advocates of deregulation and privatisation put forward -- increased competition, lessened government intervention, technological advances, and lessened economic concentration -- did not eventuate, while the position of citizens’ communicative rights through access to telecommunications goods and services lay in the hands of foreign capital whose sole purpose was to return value to offshore investors. Furthermore, arguments that privatisation and deregulation would lesson (or ‘depoliticise’) the scope of government was further shown to be incorrect, as one defining feature of New Zealand telecommunications were discrepancies over how best the industry should be structured. Under these conditions, the public voice was stifled by successive governments’ adherence to a free market model even when it was clear that New Zealand’s deregulated telecommunications environment was not producing tangible public benefit. Formal government re regulation was inevitable. This occurred in 2000-2001 through a Ministerial Inquiry into Telecommunications and subsequent Telecommunications Act 2001 under a guiding rubric of fostering a ‘New Zealand knowledge economy.’ However, re-regulation was not a policy process that sought to constrain untrammelled market power and promote citizen interests. Rather, it further shifted telecommunications policy towards a state-sponsored industrial policy, as the government’s policy agenda was to promote industry competition and lessen conflict amongst industry players. Under these conditions, citizens’ communicative rights were further stifled by an elitist and technocratic policy process whose guiding rationale was to bootstrap New Zealanders citizens into a ‘global information economy.