Why NZ regulation must keep up with technological change

Regulation works better when it is user-centric. Analog-age regulation protected consumers from dangers that have since been overtaken by new technologies.

New Zealand will not only be small and distant from the rest of the world, but also years behind if regulations do not keep up with technological change.

This is the key theme of the New Zealand Initiative andInternetNZ report Analog Regulation, Digital World on the state of regulation facing the technology sector.

The report, released at the 2017 NetHui, finds a few successes and many opportunities for improvement.

“We need a greater focus on the user’s perspective,” it states.

“Regulation works better when it is user-centric. Analog-age regulation protected consumers from dangers that have since been overtaken by new technologies. Often those new technologies give consumers better ways to inform and protect themselves. Trying to shoehorn new services into old regulatory models hurts everyone except old incumbent producers.”

“New Zealand’s public service is one of the world’s most highly rated. But the pace of technological change means that even the best cannot keep up without a little help,” says report co-author and NZ Initiative chief economist Dr Eric Crampton.

The report cautions against setting rigid or high regulatory barriers for small firms in small countries.

“Rules which enable innovation need to let people do things without asking permission, and to do new things which don’t fit into existing checkboxes,” says Crampton.

“New Zealand’s anti money laundering regime has laudable intentions. But it has been applied too bluntly against small, low-risk entities like iPredict. High compliance costs on small firms kill innovation.”

Sometimes, waiting to set our own rules might delay us from adopting new products and services. Drawing on earlier regulatory approvals from other countries, at least temporarily, could simplify things in New Zealand. Instead of classifying all new streaming content, we could take heed of how similar countries have done so.

Other areas, like copyright, require broader reform.

“Creative New Zealanders are taking up new options for making and sharing their work,” saysreport co-author James Ting-Edwards, issues adviser of InternetNZ. “That embrace of changing technology has not been matched in our 1994 copyright law. Our copyright system could be more flexible, enabling more innovative uses of data and content.”

The report also lauds New Zealand’s regulatory success stories, like the Ministry of Business, Innovation and Enterprise’s regulatory framework for space launches.

“MBIE’s approach in dealing with Rocket Lab gave us a world-leading framework. New Zealand will be the 11th country to reach orbit thanks to their regulatory work behind the scenes. We need to learn from that example for other large technical regulatory challenges yet ahead,” says Crampton.

The report also says the government’s commitment to open data principles needs to be seen by greater open data practice.

“New Zealand has a wealth of microdata from surveys and we can do much to make access easier without compromising confidentiality.”

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