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Brislen on Tech

Paul Brislen, Editor. 10 February 2017, 4:54 pm

Privacy Moves

The Privacy Commissioner John Edwards does a bang up job of balancing the needs of public interest with the rights to privacy built in to the New Zealand legal system.

While other countries wrestle with providers who happily harvest your personal data for one reason ("Yes, madam, of course we'll only use your email address to notify you when your car is ready") and then sell it to ratbags for other nefarious reasons ("I am the Crown Prince of Uzbekistan and I need your help, Kind Lady") we in New Zealand have robust and clearly worded laws that make such nonsense unacceptable.

In fact, New Zealand's clean language approach to the Privacy Act means we have 12 Privacy Principles which are written in plain English, not legalese, are not difficult to understand or implement and simply aren't lauded often enough for my liking.

Currently Edwards is lobbying government for some changes, not least of which is the ability to levy fines on companies that fail to take proper precautions when looking after our data, something which the current law doesn't envision.

Having had my own data left out for all to see (Thanks, New Scientist magazine - I still have that list of subscribers you published online complete with job titles, home addresses and where they work) I would like to vigorously encourage all such holders of data to take better care of our information because frankly once my mother's maiden name, my first high school and my first car registration plate are out in the wild, I'm toast and there's no going back.

Interestingly, Edwards also proposes a "data portability" feature which is very intriguing. Built on the idea of number portability, which has been a huge boon for consumers in the mobile phone space, data portability would mean when you move providers you can take all your data with you.

I'm not sure that would work terribly well with Facebook, Twitter, LinkedIn and the other social media platforms (they don't line up well for one thing, not to mention they think they own that data) but for more conventional data collectors this would be great.

I can't think how many times I've told new doctors or dentists my entire life history because they seem to have no ability to access my records at another practice. The same goes for banks, electricity companies, insurers and many others.

I really like the sound of data portability. It's one of those things you never consider but when it comes up you can't think of a single good reason why it hasn't been the case all along.

NBR - Privacy Commissioner wants $1m fines for data breaches, data portability

ZDNet - NZ privacy commissioner recommends Australia's data re-identification criminalisation lead

Stuff - Privacy Commissioner wants big fines for privacy breaches

Radio NZ - Privacy Commissioner wants million dollar fines for breaches (an excellent interview with Kathryn Ryan on various privacy issues)

 

Sparking up TeamTalk

What a difference a year makes.

It wasn't that long ago that local telco provider TeamTalk was run by its founder David Ware who was prone to outbursts that both amused and angered the telco sector.

Ware seemed hell bent on upsetting as many people as possible, whether they were providers, customers, competitors or even innocent bicycle owners (no, really) all of whom came in for a tongue lashing at one time or another.

Ware stepped down in April last year, saying he'd overstayed his welcome, and the ship of state seemed to steady itself, albeit at a list. TeamTalk struggled with its focus on wireless access, on rural and remote customers (courtesy of its purchase of Farmside in 2013) and its CBD fibre business City Link.

Now the company has come in for what its board describes as "unwanted" attention from a suitor - Spark - which has made a hostile takeover bid offering to buy the company outright at a premium.

Interestingly, TeamTalk has ended up owning the country's largest peering exchanges - the places where telcos come together to handover data to each other in a cost-neutral way.

The company owns the Auckland Peering Exchange (APE), the Wellington Internet Exchange (WIX), the Christchurch Internet Exchange (CHIX) and the poorly named Dunedin Peering Exchange (DPE) and as a service it has delivered tremendous value to almost all of New Zealand's telcos and ISPs.

But not all.

Spark famously does not peer with other providers. Instead, it has built its own network of peering points, charges other telcos to connect to them and generally uses the entire thing as a profit centre.

That means a small ISP that might, for example, host a site that is very popular with Xtra customers (yes, there are still a lot of them) will end up paying Spark for the privilege of allowing Spark's customers access to that content. That cost might be a lot more than the ISP makes from hosting said content.

Quite what Spark plans to do with the exchanges is anyone's guess but anything that adds yet more cost to the New Zealand internet connection is likely to come in for some scrutiny, either from the Telco Commissioner or from the Commerce Commission's merger team. Once they've finished look at Vodafone and Sky, that is. And NZME and Fairfax.

CityLink - Peering Exchanges

NZ Herald - Spark mounts $22.7m takeover of struggling minnow TeamTalk, offering 78pc premium

Stuff - TeamTalk says Spark takeover approach not the first, or necessarily the best

Stuff - Spark offers "compelling" 80c a share for on-the-wane TeamTalk

NZ Herald - TeamTalk boss David Ware resigns, acknowledging staff complaints

 

Peter Thiel: The emperor has no clothes

Last week we mentioned the shenanigans around tech investor Peter Thiel's sudden ability to buy land in and around Queenstown (he's a citizen so doesn't have to answer to the Overseas Investment Office, you see).

This week we learned that not only did the government grant Thiel citizenship despite him not living here permanently or even spending much time here, but we also gave him more than $20 million for his troubles.

How does that work? I'm asking because I'm not a citizen, but would cheerfully consider it if I got a cash bonus of a similar nature. Where do I sign?

The devil, of course, is in the detail. Thiel's Valar Ventures and the government-owned New Zealand Venture Investment Fund (NZVIF) signed a deal to invest in New Zealand businesses - predominantly Xero and Vend (both of which Valar had already invested in).

On the up side, both companies received an injection of cash and are going on to take over the world. As a result, Thiel's shares are worth considerably more than when he signed up. After putting in a shade over $9 million, his shares are now worth closer to $30 million. Not bad at all, and Thiel triggered his buyout from the scheme late last year, pocketing the cash.

And why not? If I had money to invest and I'd put it into a company that went gangbusters, I too would cash out when I was ready and make off with the profit. That's what investing is all about, right?

But this buy back scheme meant Thiel could reap all the reward if things went well, but share the risk if things went poorly.

If Xero or Vend had turned to custard, Thiel's losses would be shared with the NZVIF. But things went well, so Thiel got to keep all the profit.

The taxpayer (well, not all of us, obviously) wore the risk with no reward, while Thiel was pretty much assured he'd make out like a bandit if things went well.

NZVIF no longer offers this special service clause but the question is, why wasn't it seen as a bad idea back when it was first floated?

Actually, it was. While it's hat's off to Matt Nippert at the New Zealand Herald for pursuing the story, we must doff our caps to Tom Pullar-Strecker at the Dominion Post for his 2012 story which pointed out the problem in the first place.

NZ Herald - Billionaire Peter Thiel makes fortune after 'sweetheart' deal with Government

Stuff - NZVIF guilty of ignoring mandate (March 2012)


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