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• 3. Creating the Conditions

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• 3.1 Content
  • The Role of the Government
  • Maximising the Opportunities
  • Addressing the Challenges
• 3.2 Confidence and Capability
  • The Role of the Government
  • Addressing the Challenges
  • 3.2.1 Safety and Security
• 3.3 Connection
  • The Significance of Broadband
  • The Role of the Government
  • Benchmark Targets for Broadband Speed by 2010
  • Maximising the Opportunities
  • Addressing the Challenges

3.1 Content

In an inclusive society, all members are able to access and contribute to the national stock of ideas, information and knowledge. This ideal forms the core of a democratic society and is at the heart of our policies in education, culture, national identity and the innovation system. Moreover, national competitiveness is increasingly seen as dependent on the ability to access content and add value to it, as well as possessing a unique stock of knowledge and a distinctive culture. All these dimensions of content underpin national identity and branding.

Increasingly, content is seen as the means by which value is added to commercial products and services (for instance, media production companies are now repositioning themselves as digital content companies). Even the provision of public services is understood to be reliant on content. The Ministry of Health's e-health vision is based on "the delivery of the right information, at the right time, in the right format, to the right person".

What is meant by the term "content"? Anything that is capable of being digitised can be considered content, whether it is raw data (ranging from scientific research to sales figures), text, graphics, photographs, spatial models and maps, archival material, video and audio material, or television and radio broadcasts. The term can also be applied to meta-information (that is, information about information, such as library catalogues).

Content therefore includes national heritage collections, government information, databases of scientific and technical information, scholarly journals including e-journals, and library catalogues. It also includes educational resources, Web logs, cultural and language resources, locally produced stories and histories, family photos on a Web page, and new products from the creative industries, such as interactive games.

Until the invention of computers, information was stored in physical formats (such as paper, film or tape). Access to information depended upon gaining access to the physical object that contained it, such as a book, a photograph or a magnetic tape.

By converting information into digital form, ICT has enabled information to be freed from the constraints of physical storage. The cost of creating, owning, searching, sending and reproducing information has fallen dramatically. Storage costs are low and transmission is instant. Information can now be created, accessed and sent from many points, including businesses and the home. Wireless technologies enable information to be sent from and received anywhere on Earth.

It is now easy to manipulate information to create wholly new information-based products and services. Given the skills and equipment, individuals and community groups can easily produce and disseminate their own content.

New content industries have developed at various points along the digital content value chain, which runs from content creation and production, via encoding, storage and retrieval, distribution and networking, to usage (including reuse).⁷ The ability to share sets of data (datasets) increases their content value. For example, links between geographic, demographic and resource datasets increase their potential as planning tools.

Members of the public can now access digital content held by central government agencies such as the National Library, Statistics New Zealand, Land Information New Zealand and the Personal Property Securities Register and by heritage organisations such as film or sound archives and museums. To get the full benefit, however, the public must be made aware of the range of content that is available, and methods of access must be enhanced.

Technologies that make it possible to move information around faster than ever before also make it possible for suppliers of information to control access in ways not imagined before. Publishing, marketing and licensing practices can conflict with

the spirit or the letter of international agreements or national legislation, making it difficult to balance the rights of intellectual property holders with the rights of those seeking access to information for educational or cultural purposes.

The Role of the Government

The government has an established role in:

• supplying government information as part of the democratic process, including statutes and regulations, legal obligations, Official Information Act requests and details of policies and programmes;
• developing necessary policies and standards;
• preserving and presenting our national heritage through the work of the National Library, Te Papa, Archives New Zealand and other memory institutions;
• documenting New Zealand history in oral histories, war histories and the Dictionary of New Zealand Biography;
• enhancing our national identity, by supporting artistic expression (in literature or performing and visual arts) and creative industries such as film and publishing;
• supporting New Zealand broadcasting content through NZ on Air, the TVNZ Charter, Radio New Zealand, Te Māngai Pāho and the Māori Television Service and the National Pacific Radio Trust;
• providing a range of scientific, technical and statistical data, including location-based information such as the land registration system and topographic and oceanographic data sets;
• providing access to international knowledge and research, by buying licences for overseas databases and maintaining national research collections held in Crown Research Institutes, national institutions and universities; and
• providing guidelines for the commercialisation of intellectual property.

The transition to digital formats will change the way the government will carry out these roles in the future. Despite the pace of technological change, it must manage its content-related institutions and policies so that the full value of New Zealand's content can be obtained.

Maximising the Opportunities

Information previously held by several institutions can now, for the first time, be considered as a whole through a National Content Strategy, with the aim of maximising the social, cultural and economic benefits of content.

Ideally this will result in New Zealanders having easy access to all the information they need for all aspects of their lives such as for business, cultural, community and educational purposes.

Local government is already responsible for the provision of public library services. Local libraries provide electronic access to information at the community level in partnership with community groups and central government agencies such as the National Library (via the EPIC service). There is an opportunity for libraries to expand their role.

Government policy already requires all departments to apply approved e-government standards for resource discovery and systems interoperability. Examples can be found in collaborative initiatives between the Ministry of Education and the National Library, such as those for interoperability between e-learning and digital library architectures.

Addressing the Challenges

3.2 Confidence and Capability

The full potential of ICT can only be realised if all New Zealanders have the ability and confidence to use it and consider their experience of ICT to be beneficial. There are two dimensions to consider: our people and the ICT environment in New Zealand.

• The human dimension: Ensuring that New Zealanders are aware of the ways in which digital technologies can enhance their well-being, and that they have the opportunity to acquire ICT skills together with the necessary technical support to use them effectively; and
• The ICT environment: Ensuring that the environment for ICT use in New Zealand is trusted, secure and reliable.

Making the step-change from the world of physical information to the digital realm requires a corresponding change in how we think about literacy. Literacy has been defined as "a complex web of reading, writing, speaking, listening, problem solving, creative thinking and numeracy skills".⁸ We now need to expand the concept of literacy to encompass ICT and information skills.

Digital literacy is about having the confidence, skills, motivation and discrimination to use ICT in appropriate ways. Digital literacy can therefore be seen as a life skill, similar to literacy and numeracy.⁹

Information literacy is the ability to locate, evaluate, manipulate, manage and communicate information.

As learners become increasingly information-literate, they develop skills in discrimination, interpretation and critical analysis. ICT offers opportunities for higher-order thinking and creativity in processing, constructing and conveying knowledge.

Literacy is both the goal of education and a skill that must be acquired for learning to occur. The speed and breadth of technological innovation mean that digital and information literacy skills will need continual updating and development.

Digitally and information-literate New Zealanders will be able to find readily the information that is important to their lives and businesses, including educational and cultural content. They will be able to map and manage individual and community information assets, and contribute their stories or information to the local and national stock of content. They will be better able to adapt to changes in the workplace, and in the nature of work itself.

While ICT confidence for all is a worthwhile goal in itself, it also contributes materially to people's self-sufficiency. The digitally literate use ICT to improve their well-being, whether it is to learn, find employment, or to develop their businesses and community organisations.

In the future, more of life's activities will be facilitated by digital means. Correspondingly, there is a risk that some people will be left behind. For society to be inclusive, everyone must have the opportunity to become digitally and information literate.

The Role of the Government

The government has a long-established role in education provision and industry training. It is the government's responsibility to ensure that all groups in society have the opportunity to become confident in the use of ICT.

In fulfilling the roles described above, a key task for the government is to ensure that digital and information literacy is promoted at all stages of education and in all forms of training, taking into account the needs of people with disabilities and of disadvantaged groups.

Addressing the Challenges

Maximising the opportunities provided by ICT depends on a high degree of awareness, a clear path to acquiring the necessary skills, appropriate training, and adequate technical support.

A key challenge and a theme of this Strategy is the need to raise people's awareness of the economic, social and cultural benefits of ICT, as well as its attendant risks. The benefits extend to the opportunities for better performance in all dimensions of society: central and local government, in business, in social institutions (including iwi bodies) and community organisations of all kinds.

Information and digital literacy will require continued development and updating as people's confidence grows and new technologies are introduced.

The extent of the technical support required to underpin ICT training and develop ICT projects has been generally underestimated. The barriers to technical support include both its cost and its accessibility.

3.2.1 Safety and Security

Cyber-attacks, spam, electronic viruses and spyware are increasing. They cause economic loss and undermine the benefits that ICT confers.

In New Zealand, 21% of businesses say that the risk of virus attack or of hackers accessing confidential information restricts their use of the Internet.¹⁰ A European Union study has estimated the cost of spam to Internet users world-wide at about €10 billion per year.¹¹ According to Brightmail, an anti-spam software company, unsolicited bulk mail volumes accounted for 63% of all email traffic on the Internet in March 2004, up from just 8% of traffic in mid-2001.

There are also well founded concerns about child pornography, the victimisation of children in chat-rooms, online scams, and harassment by email or text message.

All these menaces, great and small, undermine our efforts to encourage the uptake and productive use of ICT.

Both businesses and consumers require an ICT environment that is backed by adequate domestic and international legislation, together with self-regulation and education, to protect them from vandalism, fraud, theft, misleading or deceptive trade practices, spam, cyber attacks, viruses and objectionable material and behaviour.

The Role of the Government

The government will work with the ICT industry and encourage private and non-profit organisations to work together to ensure that people's online experience is safe and secure.

The government will take the lead in:

• maintaining an appropriate regulatory environment within the context of continuing technological change;
• identifying emergent issues;
• promoting the development in international fora of appropriate international standards and regulatory frameworks that address safety and security issues;
• raising awareness and promoting best practice in information security and safety with respect to the Internet and mobile devices; and
• mitigating the effects of toxic computer waste, by supporting local authorities and the recycling industry to minimise their effects on the waste stream.

Addressing the Challenges

3.3 Connection

New Zealand already has a well developed telecommunications infrastructure. Standard telecommunications services are widely available, and there is high usage of dial-up Internet connections and mobile phones.

Being connected is a prerequisite for all the other goals of the Digital Strategy: unleashing the potential of communities, creating value in business from information, and transforming government.

Being connected requires the availability of a high-quality infrastructure that connects us to global networks, enabling us to join the wired world. Such a network will give us access to knowledge resources, e-government services, leading-edge research, and new markets, making possible collaborative communication and the production of new content.

Being connected is not sufficient in itself to build an information-empowered society, as the rest of this Strategy makes plain. But without connection, nothing else can happen.

The Significance of Broadband

The availability and uptake of broadband are the infrastructure measures by which the development of an information-empowered society is judged. While Internet-grade broadband is widely available in New Zealand,¹² its uptake to date has been uncharacteristically low, with only 2.5 subscribers per 100 population, compared with the OECD average of six.¹³ The higher bandwidth necessary for video-conferencing and voice-over-Internet have an even lower level of uptake, while the massive bandwidth requirements of advanced research are generally unavailable.

Many factors have undoubtedly contributed to the low uptake of broadband in New Zealand, such as availability, attractive dial-up rates, competitive pricing and a lack of understanding of its value. Consumers typically do not appreciate the productivity benefits that broadband confers until they actually start using it.¹⁴

Providing the additional bandwidth will require significant investment, now and in the future. That investment will not occur without increased demand, stimulated by the attractive pricing of services.

Striking the same balance between investment incentives and demand incentives such as price is also significant to another dimension of connection: mobile telephony. Here, New Zealand has excellent infrastructure and uptake but high prices are inhibiting future uptake and growth.

The Role of the Government

In what is a relatively small market with limited competition, the ability of the regulatory environment to maintain the optimal conditions (in the absence of their being provided by a truly competitive market) is critical.

Communications technology is changing rapidly. Investing in infrastructure involves significant expense and a high degree of commercial risk. Without the spur of competition, New Zealand's small market deters such investment. As its first challenge, the government needs to enhance competition between providers to promote investment, drive innovation, and keep prices close to cost.

There are two main ways for the government to promote investment. First, it can enhance competition through the regulatory process. This includes regulating the price for certain services between service providers where it is in the long-term interest of consumers. The establishment of the independent Telecommunications Commissioner has made this process transparent and more certain. Since its establishment, the Commission has conducted work in areas such as interconnection, local-loop unbundling and wholesale pricing.

Secondly, the government through its delivery of services, can promote investment and competition in areas that might otherwise lack them. Project PROBE and the Advanced Network project are two examples. By spending tens of millions of dollars to provide government services such as education and scientific research, the government has stimulated private-sector investment in regions or sectors where the commercial risks would inhibit or delay the roll-out of infrastructure. Such initiatives have multiple benefits. Not only do they significantly improve the quality of service delivered, but the improved infrastructure also becomes available for other uses.

The government also plays other roles. It provides information to citizens, firms and communities on the benefits of ICT. It owns and manages key resources such as the radio spectrum. It can also signal its preferences to providers by setting future targets based on appropriate benchmarks.¹⁶

In all cases, commercially sound investment and the effective operation of the market should be the preferred means of supporting regional and sector development initiatives. Government regulatory intervention should be used as a last resort only.

Benchmark Targets for Broadband Speed by 2010

In order to reach the broadband targets in Figure 1, three elements of this Strategy (content, capability and confidence, and connection) must be developed in a co-ordinated and timely fashion. It is important that content providers work closely with suppliers. Investing in infrastructure before content becomes available results in inefficiency, with resources locked up in an investment that is not being used. Providing content with no means of access is equally futile.

The targets in Figure 1 set out the level of bandwidth that is likely to be necessary if all elements of this Strategy are progressed in sync with all stakeholders.

These targets have been discussed with a number of telecommunication companies, which confirm that they are achievable. They are confident that the technology will be capable of delivering the targets and that the provision of services will be commercially viable if the anticipated demand for services outlined in this Strategy is achieved.

Project PROBE and the Advanced Research project will provide a framework for meeting these targets. PROBE will bring medium-speed broadband (sufficient for video-conferencing) to 3000 schools and communities, reaching some 95% of New Zealand's population.

The Advanced Research project will bring gigabits of bandwidth to research bodies in major centres. The infrastructure needed for both will become available for businesses, hospitals, local government agencies and individuals, creating demand for a range of new services which, in turn, will spur further investment in infrastructure.

To achieve the benchmark targets in Figure 1, the industry will need to replace all copper lines to exchanges and cabinets with fibre, and provide major users in cities with fibre connections on demand. For residential and SME customers in towns and provincial centres, it is expected that demand for 10Mbps (extending to 100Mbps) can be met via the copper lines between their premises and the cabinet or by using wireless technologies.

Figure 1 - Targets for Broadband Speed by 2010

Maximising the Opportunities

As stated earlier, commercially sound investment will underpin decision-making towards the achievement of these targets. All actions will need to be taken with a view to a cost-effective solution to minimise distortions to private investment decisions and maintain the balance between competition and coverage.

To achieve the benchmark targets, service providers will need to invest in essential infrastructure to support emerging applications. The government will consider further investment in critical service areas such as education and health. Local government, businesses and community groups will also need to evaluate their future requirements.

Investment in broadband for health services will enable the provision of modes of health care delivery that now seem visionary. Using broadband for remote diagnosis over televideo and for fast access, in remote areas, to high data-volume diagnostics such as CAT scans, are two examples.

Investment in broadband in public libraries and local government provides opportunities for fast access to large stocks of content. It makes it possible to develop large content datasets and to use content delivery media such as video-conferencing.

Project PROBE has already been a catalyst for accelerating ICT innovation in regional New Zealand. It has aligned community, government and industry interests around the use of broadband to accelerate regional economic development. As a consequence, the E-regions initiative is being developed by regional government interests to stimulate innovative and practical ICT solutions for regional New Zealand in four sectors: education, health, local government, and small business (see Appendix 1 for further detail).

Addressing the Challenges

In meeting the benchmark targets that have been set for broadband, a number of challenges must be addressed. Demand from users must be sufficient to stimulate commercially sustainable investment. Market competition must be sufficient to ensure consumers are offered good services at affordable prices.

The regulatory environment established by the Telecommunications Act 2001 largely addresses these challenges by promoting competition and maximising flexibility. The Telecommunications Commissioner has already reported on a number of investigations and signalled his intention to carry out further investigations. Via the regulatory environment and by undertaking initiatives such as Project PROBE and the Advanced Network project, the government will promote competition, act as a backstop to prevent specific problems, and support initiatives that would otherwise not be commercially viable.

The regulatory agencies need to have up-to-the-minute and accurate information available on which to base their analysis. Without it there is a danger of poor, or delayed, regulatory response to critical issues.

⁷There is more detail on our ability to create new content industries in the section on Businesses.

⁸Ministry of Education, Digital Horizons: Learning through ICT, revised edition, December 2003.

⁹Ibid.

¹⁰Ministry of Economic Development, Firm Foundations, p. 110.

¹¹Organisation for Economic Co-operation and Development, Committee for Information, Computer and Communications Policy; Background Paper for the OECD Workshop on Spam, December 2003.

¹²Internet-grade broadband is adequate for web-browsing but lacks the real-time quality of service required for video on demand or voice-over-Internet.

¹³OECD, Benchmarking Broadband Pricing in the OECD, March 2004.

¹⁴The Brookings Institution has reflected on this issue: "Many consumers may not choose to subscribe to broadband because they perceive that there are few uses of it that interest them. On the other hand, content providers may not invest in new, innovative applications because there are too few subscribers." The Brookings Institution, Policy Brief No. 117, Debating US Broadband Policy: An Economic Perspective, March 2003.

¹⁵"The Economic Impact of an Accelerated Rollout of Broadband in Hospitals", Access Economics, December 2003.

¹⁶Market competition and investment will be necessary to achieving many of these targets. In some cases, for example in remote regions or for disadvantaged groups, markets may not deliver services in a timely, affordable or equitable manner, and government action may be warranted to ensure the public interest is met.

¹⁷"OECD Backs Broadband for Economic and Social Development" [link to external website] 12 February 2004.

¹⁸It is envisaged that by 2010 a single colour on a single fibre will permit up to 100Gbps, but that as infrastructure is rolled out over time it may be more cost-effective for suppliers to provide 1, 10 or 40Gbps services per colour or per fibre and to use multiple colours or fibres to provide additional bandwidth. Standard service offerings will be benchmarked at 10Mbps, 100Mbps, 1Gbps, and 40Gbps for fibre, depending upon location, and 10Mbps and 100Mbps for wireless services depending on location. Benchmarking will be done against a range of comparable OECD countries.

¹⁹Mobile termination rates are the fees that mobile phone companies charge other carriers to terminate calls on their networks, enabling mobile phone users to receive calls from different phone networks. Mobile termination charges are a significant contributor to the retail prices of fixed-to-mobile and mobile-to-mobile calls.