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The oddities in Maori radio spectrum rights

The core arguments for Māori spectrum rights don’t reflect the benefits they bring today.

After the government confirmed last week that nothing will be reserved for Māori interests in the 700 MHz spectrum auction later this year, Māori claimants look set to go back to the Waitangi Tribunal. They will probably argue in claim Wai 2224 that radio spectrum is taonga and, as such, the Crown is obliged to set some of it aside.

The 700 MHz band is being freed up by the end of analogue television, and will be used for 4G mobile networks. It won’t surprise you, then, to know that this case is tied heavily to 2degrees—especially if you know that New Zealand’s third major mobile service provider was founded using spectrum (in the 2 GHz 3G band) reserved for Māori.

What makes the case intriguing is that there was no hint of this in the original claim.

The beginning
The issue was first heard by the Waitangi Tribunal in 1999 following claim Wai 776.* The Crown’s obligation under the Treaty of Waitangi to protect Māori language and culture was (and still is) uncontroversial. But the three-person tribunal split over its findings on radio spectrum, the majority finding for the claimants.

There were two “limbs”. The first was whether Māori have a right to spectrum. The majority found that the fact that radio waves “existed in nature—as light and sound— and could be captured by humans” was enough to make the entire electromagnetic spectrum taonga. The minority, Judge P J Savage, rejected that the principle of partnership grants Māori a right to all resources, calling it “peculiar in the extreme that [the right would be] left to be discerned as a principle within a principle”.

The second limb relates to the Crown’s obligation to protect Māori culture. The majority said that “where there is a will, there will be a way” to use some of the 2 GHz band to advance Māori culture, omitting what the “way” could be. Judge Savage disagreed that this made spectrum allocation a necessity, recommending instead that auction proceeds be used for that purpose.

This is not the place to dive into the findings, but I will say that I find the majority’s logic hard to follow and Judge Savage’s reasons more coherent. Putting aside the scientific transgression (sound isn’t a radio wave, you learn that in year 9!) the majority dealt mostly in undisputed generalities, saying that spectrum could help the Crown meet its obligations—not whether was a sensible way of doing so.

The aftermath, a.k.a. 2degrees
Cabinet didn’t accept the Tribunal’s recommendation. But in 2000, the incoming Labour government agreed to set aside one block of the 2 GHz spectrum for Māori economic development purposes (ref). This block would be given to Hautaki Limited, an incorporated company being trustee of the Hautaki Trust, a trust set up to hold Māori spectrum rights. Hautaki later leased its spectrum rights to Econet Wireless Limited, which became NZ Communications Limited and is now the well-known 2degrees Mobile, in return for a 20% stake in the company.

Unsurprisingly, 2degrees has been very supportive of proposals to grant further spectrum to Hautaki. In a 2007 submission, they wrote that “Maori should benefit as investors not just content providers or users.” But expectedly, most of the submission concerned how to promote market competition. Similarly, on the 700 MHz spectrum, Hautaki’s submission chose to emphasise the benefits of having a third player in the mobile market.

Where we came from
Pause for a moment and consider how we got here. A significant plank of the original claim was the Crown obligation to protect Māori culture. Now, our basis for supporting Māori spectrum rights is so they can profit as investors, with some overtones of encouraging competition in the mobile industry.

In a sense, the Māori spectrum allocation of 2000 turned out well for New Zealand. The addition of a third player, 2degrees, in the mobile market has undoubtedly been good.† But if promoting competition is the objective, then the Treaty of Waitangi is a roundabout if not improper way of achieving it.

Wai 776’s second limb, the protection of Māori culture, has not borne out from the 2 GHz reservation. Perhaps the Labour government foresaw this, and so tagged the spectrum for “economic development” rather than culture. The current National government’s new $30 million “ICT development fund” for Māori seems to have similar affirmative action goals (also undoubtedly good), as does the Hautaki Trust, whose purpose is “to increase the participation of Māori in the knowledge economy”.

What is fascinating is the divergence between the benefits that were argued and those that accrued. The affirmative action aim, which is laudable, was not touched on in the Tribunal’s 1999 report. Protecting language and culture was, but didn’t happen. Facilitating competition isn’t a Māori rights issue. That leaves Wai 776’s first limb, the right to “develop” the resource as taonga, which successive governments have rejected but ended up implementing a similar model anyway on the affirmative action basis—the outcome being 2degrees.

* It actually goes back to the allocation of AM/FM broadcasting licences in the 1990, but that context isn’t really comparable because broadcasting, unlike mobile telephony, has an express purpose of promoting culture.

† The reason the new entrant can be attributed to the Māori allocation is because new entrants would have been unlikely to bid without other investments secured, let alone outbid the incumbents in an open auction. The purchase price for Hautaki in the Crown deed was set at 95% of the lowest successful bid for non-reserved spectrum. As an aside, it’s worth noting that the spectrum rights weren’t given to Hautaki for free.

2 Comments Post a comment
  1. This is an area with which I have some familiarity, because of previous jobs. You’ve provided a pretty good summary of an area that seldom gets a lot of scrutiny.

    There’s another “limb” of outcomes which the government might support which I think you are under-rating which is the “we will get to proceed with our policymaking without having to wait about for more Waitangi Tribunal decisions”. Not a pretty idea, but a very real one.

    3 March 2013
    • Chuan-Zheng #

      Thanks Joe! I hadn’t actually thought of that line of thinking at all. But to the extent that it’s true, presumably it would never be said out loud?

      3 March 2013

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