}

Tuesday, October 27, 2009

Are they really so clueless?

The more this National Party-led Government goes on, the more I wonder if they have a clue what they’re doing. So many of their ministers are so clearly out of their depth that it’s difficult to have any confidence in John Key’s premiership. Worse, their approach on issues often seems, at best, na├»ve.

The government’s strategy on Internet broadband is a good example.

The previous Labour-led Government set a goal of ultra-fast broadband (UFB) available to most New Zealanders. They intended to use the government as the instrument for achieving what the commercial sector had shown no interest in doing. The current government, however, has decided to pursue “public-private partnerships” to make this happen.

As a centre-right government, it’s understandable that they’d have unshakeable faith in this approach. The reality is that sometimes it works, sometimes it doesn’t—which means it’s no perfect solution, as they seem to think.

Their initiative will require the formation of companies to take on the wiring of local areas with fibre-optic cables to the premises (which they call “FTTP”). This in itself a good thing: Previous commercial interest has been in extending cables only to exchanges. One company proposed to extend the cables to the cabinet (the junction boxes on the street), but they provided no timetable and didn’t actually do anything.

The government’s goal is “a minimum uncontested 100 Mbps downlink and 50 Mbps uplink”, with the capability to support speeds up to ten times that. This would represent a dramatic improvement. The government intends that UFB will ultimately be available to “75 percent of the New Zealand population.” However, since a projected 4.5% of New Zealanders will live outside of “high-density population centres” by 2021, the government has decided that some rural areas will probably not get UFB. But their own projections also show that UFB won’t be available to about 20% of the population, which means some non-rural areas won’t be served, either, because it won’t be economically feasible.

And that’s the crux of the problem: National’s reliance on “public-private partnerships” means that urban areas will be wired first, providing, they believe, the profits necessary for the companies to wire smaller areas. Despite National’s unbridled optimism, there’s no evidence to suggest that without massive government subsidies businesses will find any economic rationale for going outside urban areas.

The plan calls for this all to be completed over a decade (or longer). The need for reasonably-priced, fast broadband exists now, and we’ll continue to fall behind the world the longer it takes. The government doesn’t seem to understand the huge urgency behind upgrading our Internet infrastructure.

New Zealand is completely dependent on the so-called “primary sector” (chiefly dairy products, meat and wool). In order to compete in a global economy from one of the countries farthest from world markets, New Zealand must have a fast, reasonably-priced and reliable internet infrastructure as soon as possible. Despite good aspects of the current initiative, there’s nothing in it to suggest the government understands this.

Update: According to Statistics New Zealand (via NZ Herald), in the 15 months to June, broadband connections in New Zealand jumped 27 percent to 1.1 million, meaning that broadband now makes up three-quarters of all Internet connections. However, half of all broadband subscribers had a data cap of less than 5GB per month. The number of subscribers with a 20GB data cap or more had tripled, but was still only 126,000. All of which shows how the market is not delivering the solutions that New Zealand needs.

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