Submitters expressed concern about the lack of explicit natural justice protections in the bill as introduced. For example, the Law Society noted that the bill would neither expressly require the Secretary to give notice to affected parties, nor provide an opportunity for affected parties to be heard before the Secretary used the enforcement mechanism. Submitters were also concerned about the accuracy of the information that the Secretary would rely on. They noted that the information would not have been independently reviewed, and that the affected parties may not have been given an opportunity to correct it.

We consider that Part 7A can be improved to allow for natural justice and reduce the risk of misuse of the proposed enforcement power. We recommend adding subsections (3) and (4) to proposed new section 65F so that the Secretary could not exercise the power to revoke or restrict a licence without first giving written notice to the alleged non-compliant provider (and to the licence holder, if they are not the same party). The notice should:

• describe the alleged non-compliance and state that the Secretary is considering using the power to address it

• explain why and how the power may be exercised

• provide an opportunity for the affected party to give feedback.

Proposed section 65E would enable other regulators (a surveillance agency or the Commerce Commission) to request that the Secretary exercise the enforcement power. Submitters expressed concern that, without judicial oversight, this ability could risk bypassing legislative checks and balances. We had similar concerns about the lack of explicit guidance. We agree with the policy intent of the bill; that the enforcement power should be used as a last resort.

We recommend amending section 65E and inserting subsections (1A) and (3) to require that before requesting that the Secretary exercise the enforcement power, the surveillance agency or Commerce Commission must have:

• explored all enforcement mechanisms available for addressing the non-compliance

• identified practical difficulties with those mechanisms

• decided that enforcement under Part 7A is preferable to the other mechanisms

• supplied the Secretary with evidence of the other enforcement mechanisms that were explored, and the practical difficulties identified.

We also recommend inserting subsection (4) to make clear that a “practical difficulty” would not include the standard costs of proceedings in New Zealand or administrative convenience.

Section 65G(1) would establish what the Secretary must consider before exercising the enforcement power in section 65F. Subsection (2) would allow the Secretary, when considering these matters, to rely solely on summary information provided by the surveillance agency or the Commerce Commission.

Submitters were concerned about the accuracy of information that the Secretary would rely on. They noted that affected parties may not have seen the information, nor been given an opportunity to correct it. The Law Society stated that decisions based on summary information, without explicit rights of participation and review, risk undermining confidence in the proposed regime and exposing decisions to judicial challenge. We consider that clause 65G as introduced would leave the enforcement power open to misuse.

We recommend amending section 65G(2) and inserting subsection (3) to provide that the Secretary may consider feedback from the non-compliant provider and any other parties they consider relevant to inform their consideration of the matters set out in subsection (1).

Two submitters expressed concern that section 65F(1)(b) as introduced involves a test based on the recipients of a service (“persons in New Zealand”) and does not articulate the jurisdictional limits of the test. We consider that the Secretary should consider jurisdictional reasons for non-compliance before deciding whether to revoke or restrict a licence.

We recommend inserting section 65G(1)(e) to require the Secretary to consider, if the non-compliant provider is outside New Zealand, the extent to which the non-compliance results from their need to comply with the laws of a jurisdiction outside New Zealand.

Section 24 of the Telecommunications (Interception Capability and Security) Act (TICSA) relates to the duty of network operators and service providers to assist with the execution of an interception warrant. Section 24(8) acknowledges that nothing in section 24 affects the application of the common law defence of foreign state compulsion to a service provider outside New Zealand.

We consider that, given the changes this bill would make to expand the TICSA’s scope to international network operators, it would be sensible to widen the acknowledgement in subsection 24(8) so it also applies to network operators, and to have it apply to all network operator and service provider obligations in the TICSA, rather than only to section 24’s duty to assist.

We recommend inserting clause 25, which would insert new section 121A (Common law defence of foreign state compulsion not affected) into the TICSA. New section 121A would establish that nothing in that Act affects the application of the common law defence of foreign state compulsion to a network operator or service provider outside New Zealand.

We further recommend inserting clause 23A to amend section 24(8) of the TICSA, specifically directing readers to section 121A if the common law defence of foreign state compulsion applies.

In the bill as introduced, the power in section 65H would allow the Secretary or other decision-maker to take previous non-compliance into account when deciding on certain matters listed in proposed Schedule 1AB of the Radiocommunications Act. This power is intended to apply to non-compliant providers, who might have had their licence revoked or be restricted from accessing a particular radio spectrum licence (under the proposed enforcement mechanism). It would prevent them from immediately seeking a new licence so they could continue to deliver telecommunications services. We understand that there is nothing currently stopping providers from doing so, and to continue to allow it would undermine the proposed enforcement mechanism.

As introduced, the bill would not define the “previous non-compliance” that would invoke the power in section 65H. It could be interpreted as including minor non-compliance with the Telecommunications Act or the TICSA, or non-compliance that was immediately remedied. One submitter expressed concern that the power could mean that a single instance of non-compliance could have long-lasting commercial repercussions for an operator’s activities in New Zealand. It suggested that this approach could risk discouraging remediation and cooperation, particularly where breaches are technical or isolated.

We consider that the power in section 65H should be limited to considering previous enforcement action under Part 7A. We recommend amending section 65H(2) so that the only type of non-compliance that the Secretary or other person may take into consideration when making the licensing decisions listed in Schedule 1AB is non-compliance that resulted in enforcement action under Part 7A.

Clause 15 of the bill as introduced would insert section 157(1A) into the Act. This would provide that the requirements set by regulations under existing section 157(1) could apply to all providers offering telecommunications services to consumers in New Zealand, regardless of whether the providers, or the infrastructure they rely on, are based in New Zealand or overseas.

We consider that this proposed extra-territorial power is too wide in the bill as introduced, and should apply only to regulations made under subsection 157(1)(ch) of the Act, which relates to 111 emergency call services. We consider it important for the effective and safe operation of the 111-calling system that any potential regulations would be effective when applying to overseas providers.

We recommend amending section 157(1) in clause 15 so that the regulation-making power that would apply extra-territorially be narrowed to only those regulations made under section 157(1)(ch), rather than any regulation made under section 157.

Schedule 3 of the bill as introduced would insert Schedule 4 into the Telecommunications Act. Schedule 4 would specify provisions of the Act for which non-compliance may result in action under Part 7A of the Radiocommunications Act.

Clause 1(10) of proposed Schedule 4 states that regulations can identify a particular requirement as one that is subject to the proposed enforcement regime, which can revoke or restrict licences. We understand that, without amending the Act, this power would enable any type of new regulations made under section 157 of the Telecommunications Act to be added to the list of breaches that could result in a revocation or restriction of licence. We consider this potential power too wide.

Regulations made under section 157(1)(ch) of the Telecommunications Act can set minimum requirements for 111 emergency call services and specify who is subject to those requirements. We recommend amending the bill to narrow the power in clause 1(10) of proposed Schedule 4 so that it only applies to regulations made under subsection 157(1)(ch) of the Act.