$1.5 BILLION FOR FIBRE - National ups the ante!

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Posted Tue 22 April 2008 @ 2:01 p.m. by Ernie Newman

A National government will commit $1.5 billion over six years to bring fibre to almost every home and premise in New Zealand, supported by wireless and satellite technologies.

That's what leader John Key pledged today, speaking to a special lunch meeting of the Wellington Chamber of Commerce.

Tellingly, his entire speech was devoted to broadband. Nothing else - just a bit of preamble about New Zealand's infrastructure deficit, and then straight into it.

Read the whole speech here.

It was immensely encouraging. Especially so in the wake of the TUANZ "Manifesto" document "Towards leading edge connectivity" which called explicitly for measures along these lines.

I was fortunate to not only be at the top table, but seated next to Key.  He has done his homework and knows his stuff very well. His passion for infrastructure investment is clear. He's informed, friendly and easy to chat to.

Also at the top table among others were several well known TUANZ members including Rod Drury of Xero, David Copeland of CWA New Media, and Mario Wynands of Sidhe - all appearing rather happy with what they were hearing.

The best of the several good quotes I took out:

"- If dial up could deliver Trade Me, who knows what might be delivered by fibre to the home."

We are early in the election campaign. This is the beginning, not the end. But that fibre and telecommunications has been given such prominence so early is a hugely positive sign. Bring it on!


Categories: Education | Events | Fixed line carriers | Innovation | ISPs | Regulatory | TUANZ policy | Vendors | Wireless carriers

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5 comments

  • Jane says:

    Yes, good to see the political parties recognizing this as a key factor for New Zealand, not just in terms of economic transformation, but also improved outcomes for the delivery of health and education.

    Added: 22 April 2008, 2:45 p.m. Flag as Spam  |  Flag as Offensive

  • Chris O'Connell says:

    Great to see. We can now move on to the real issues raising NZ's international competitiveness and productivity, also good to see the babies are not being thrown out , the digital strategy obviously lives (where will be interesting!) and open access is being embedded.
    David Isenmberg's reaction to this at Telco day will be fascinating as will Labour's response - stay tuned

    Added: 22 April 2008, 2:51 p.m. Flag as Spam  |  Flag as Offensive

  • Kevin L says:

    Fibre to the home might sound nice just now, but until a second Trans-Tasman cable is rolled out we will still be waiting like a ferari stuck in traffic on a narrow road. The money would be better invested in a new Trans-Tasman cable and get rid of the bottleneck first not add to it.

    Added: 22 April 2008, 8:27 p.m. Flag as Spam  |  Flag as Offensive

  • Karl says:

    @Kevin L

    The second Trans-Tasman cable has been signed off, and will be in service before we can get FTTN.

    Added: 23 April 2008, 8:43 a.m. Flag as Spam  |  Flag as Offensive

  • Alex says:

    Agree that it's good to see the importance of broadband being recognised, but there are major flaws with this proposal (which mimics the NZ Institute report):

    1/ Crown taking an equity stake in rolling out fibre-to-the-home doesn't improve the business case for the private sector (it just shares the risk of what will continue to be an uneconomic business case)

    2/ The only way to improve the profitability of FTTH in the short term to such an extent to incentivise private sector investment is to set high access prices (to effectively subsidise the roll-out) AND to force users to take the service at the high prices (the viability depends on high-uptake, and users will need to be forced off the copper service). This scenario is clearly outlined in the NZ Institute paper.

    3/ Telecom is the ONLY provider who will be able to win the tender (no one will invest money in FTTH if they have to compete with Telecom's xDSL services - they'd be majorly undercut)

    4/ In order to run a tender that encourages multiple bids, the government will need to threaten to structurally separate Telecom + make these assets available to the new entity (as proposed in the NZ Institute report)

    5/ Competition is dead and buried forever in NZ, with providers competing on the margins of service-based facilities.

    In my view the 'solution' is worse than the problem. I for one will be printing out all the press releases praising this initiaitve and filing them away - if it goes ahead I never want to hear any complaints about poor competition and high prices for services in NZ!

    Added: 23 April 2008, 9:27 a.m. Flag as Spam  |  Flag as Offensive
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