Will Nats Biff Telco Plan?

The incoming National led government has (predictably) put the Broadband Investment Fund (BIF) on hold pending a review.  Parties who invested time and resources into making applications to the fund have consequently been left hanging because National wants to put its own stamp on the project.

One assumes that BIF applicants knew there was considerable political risk attached to participating in a funding round which came at the end of a government term. But the incoming Cabinet has an obligation to protect the interests of parties who applied in good faith. Developing business cases and filling out a myriad of forms is standard when it comes to securing any kind of public funding these days and this carries with it a hefty cost. Perhaps we should get the new Minister of Red Tape, Rodney Hide, on the case? Cutting back on petty bureacracy would be a great way of improving productivity in New Zealand.

More importantly, where will the new government go with broadband rollout as an infrastructural project? With National’s stated preference being fibre-to-the-home (FTTH), it is difficult to conclude that they have received a range of advice from independent telecommunications industry specialists. There are so many vested interests involved that one wonders where the Nats dredged up their policy advice from. Was it the foreign owned network infrastructure providers who stand to benefit from FTTH investment, or was it the telcos who want to extend their reach?

Indeed National’s apparently Telecom-centric broadband “vision” came under fire from Telstra boss Alan Freeth when it was announced originally. He argued that whilst subsidising FTTH may be a vote winner, that it will do little for the nation’s long term economic development. I’ve drawn this analogy before, if you build a new road you don’t need a bus stop outside every home do you? A lot of people never use buses. In other words, fibre-to-node makes much more sense.

Whatever the case, it appears more likely that decisions will be made on the basis of clever lobbying, rather than sound, independent research. Telecommunications technology is changing rapidly, but broadband infrastructure, once built, will be in place for years. Hence I’m troubled by Ernie Newman’s somewhat rosy assessment of the “rich tapestry” of network ownership that makes up the industry. It sounds more like a recipe for chaos to me, so I agree with his idea to develop a national broadband architectural blueprint. The more important issue of international connectivity has not yet been solved. So there is still a risk that, in the name of political expediency, we will end up with another half-arsed solution that does little to address our aspirations of climbing the OECD ladder.

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