I retired from personal blogging in July 2008.
But you can find me over at http://blog.xero.com.
Just back from hearing John Key deliver his broadband investment speech at the Wellington Chamber of Commerce event.
2008: Achieving a Step Change - Better Broadband for New Zealand
“- If dial up could deliver Trade Me, who knows what might be delivered by fibre to the home.”
Some thoughts
- It was the first major policy announcement from National, and probably a good choice of policy areas to start with.
- It was great so see some vision and leadership.
- It didn’t lock in a particular model - which at this stage is a good idea.
- I like the approach of being clear about a number of principles that will guide process towards a solution.
- The approach acknowledges the need to work with the private sector.
- National, and especially Maurice, must have listened and been working hard in the background since the digital summit. Great to see they listened.
- Kudos to the hard work the New Zealand Institute did on quantifying the public benefit
As I’ve mentioned before I think our industry can have some pride at moving this from a technical issue, to a business issue, to government policy. To have politicians come to terms with the complexity of our industry, the commercial sensitivities but fully understand the importance is a good win.
This is good stuff and vital to NZ. Most reasonable people would agree. Looking forward to hearing what you guys think.
Let rip.
blog
Fantastic. $1.5B for fibre to home. I’m one jealous Aussie :)
Sounds like a great start, but how far does 1.5B get you with fibre? half of auckland? the bit of welli which isn’t covered by telstraclear?
Atlease someone is talking about it tho.
Maybe the government could buy/lease all that dark fibre and coax telecom put under a large part of auckland in the late 90’s. Might be cheaper to extend rather than build. As far as I know, it’s sitting there unused - atleast the last mile bit….
[...] notes the postings, on this matter, by David Farrar and Rod Drury. If you want to read John Key’s speech you can get it here. These were all referenced in this [...]
At the NGN conference recently in Auckland there was a fair bit of scepticism from players in the wireless space (Vodafone and others) of the NZI proposal. Vested interests, for sure. OK, so this is industry opposition, but it’s there. Wimax? Australian wireless trials are showing significant speeds in their latest trials (fastest proposed network services in the world possibly) so how does this impact on the NZ situation?
How far does 1.5bn get you? Well, there are various scenarios under the NZI proposal which include PPP (Public Private Parnership) which take the sting out of the investment risks for the private sector so I imagine the 1.5bn would just be the public investment and Keys et al have private-sector involvement firmly in mind. Some meat to hang on the bones would be a good idea so we could get an idea where National is going with this.
We can trust our government to pick the winners.
Go blues! this is a much better investment than a poxy tunnel in Auckland that costs twice as much!
Hey rod, I was there too, and… Im all for fast broadband. Faster the better. But… I was a bit concerned that John was holding up faster broadband as a panacea for increased productivity in NZ. Faster broadband will be great, but its not enough to create a ’step change’ in NZ.
I want to hear some specifics about how they are going to encourage productivity increases, particularly investing in tech startups, removing the stigma of failure through incentive schemes, and clearing a path to funding for pre-startup startups.
I don’t think it’s a case of either or regarding broadband or a tunnel under the harbour. We need both and more. All types of infrastructure in NZ especially where large populations live are poor and getting worse. Pick an area - health, transport, communications, common sense.
Also if anyone listened to what John Key said beyond the headline - business first. Which probably means those running a business out of the spare bedroom will miss out because their premise will be classed as residential.
Sounds good.
I’d argue for much more regular stock-takes of the effectiveness of the investment, with these stock-takes keeping their eye on the final prize (better broadband infrastructure), and not serving as excuses to cut the government commitment, but instead, ramp it up if necessary.
Sounds cynical, but I am more than tired of government sacrificing our long-term prosperity by canning important projects that take time to pay off in favour of short-term, ill-informed spending on pork to satisfy the unthinking electorate (Labour is especially skilled at this).
Labour got my vote the past few elections, not this time. They need a few years in opposition to cut the fat and sloth from their spending agendas, and refine their thinking on what kind of expenditure will take us forward as a nation, instead of running in-place.
Work for families by ensuring our future, not handing out bribes.
Key made the most sense in this speech that I’ve heard for a while regarding broadband. Nothing locked in, but good clear direction. Don’t agree with Cunliffe’s criticisms, but hey, that’s election year politics.
Greg, I don’t think governments job is to fund (if thats what you mean) pre-startup startups. Not sure anyway whay a pre-startup startup is is anyway. Governments job is create what private enterprise cannot (or give us our taxes back).
There is quite a lot of help available to businesses in NZ; one of the problems is lots of companies don’t know where it is. That’s where someone like Rod has been very open and helpful over the years in his explanations of what has worked for him. His NZ Herald series would be a good place to start.
[...] of commentary about this already, Rod is pretty positive as it reasonably neatly dovetails with the work the NZI has done (and which Rod was involved [...]
I think Cunliffe’s dismissal of the idea smacks of sour grapes. I don’t see his point that this allegedly does a big favour to Telecom. Does anyone else see what he’s driving at? I think there will be quite a few non-Telecom providers willing to take up the offer of funding to run fibre in the n/National interest. TelstraClear? FX Networks? Citylink? Even Kordia?
Bill English’s previous dismissal of the idea as a “last ditch” resort is presumably outdated now we can do microtrenching and use Wellington City Council’s ducts and pipes :-)
I do think while the Nats were formatting that document with a portrait and lots of nice blue trim they could have corrected the two typos: Key refers to the risk of Telecom “reigning in” its cabinetisation plans and says rural areas might present problems owing to their “typography”.
I’ve always suspected right-justified Times New Roman goes a bit slowly down fibre. It would be unfair to expect rural customers to stick to Courier font.
Broadband should be regarded as basic infrastructure, on a par with roading and electricity. Hopefully this will soon be seen as a non-issue with all parties in agreement. This is a great start.
Good on you Rod for your hard work and lobbying.
Can anyone explain to me what sort of products are going to be produced in the future that will make such a sea change in our productivity and competitiveness that require faster than say 24 MBits/s (ADSL2). The uses I can see that might add to productivity are telecommuting and possibly building small knowledge based businesses. However, there is really nothing stopping anyone with the skill and drive to do exactly that now. If business can’t get the skills they need in a non-knowledge economy, how are they going to get them in a knowledge economy? By off-shoring? If John Key really wants to spend $1.5 B on competitiveness, let’s put it into education and research, both things that have suffered massive cut-backs over the last few years. The NZ investment in basic R&D is woefully short on a world scale. In short, to really profit in a knowledge economy you need the knowledge, not just they way to get it to people.
TradeMe is a great example of a product that was developed in NZ and then sold off-shore (how long before it’s hosted in Australia and managed from India?). It also really added nothing to productivity (and in fact how many business now deny access to it as too many people spend too much time on it at work) but I can’t deny it’s opened new ways to make money (especially for NZ Post…)
The other thing is, I’d love 100 Mbit/s to my gate. But I currently have 10 Mbit/s to my PC at home (TelstraClear cable) and I never get more than 250 KB/s download and far worse at peak times. To be honest, $1.5 B for fibre won’t matter jack if nothing else changes. I’d also like it if it cost $10 instead $50/month. If I had 100 Mbit/s to my gate, I’m sure it would be little more use to me and probably cost the same or greater.
AT&T: Internet to hit full capacity by 2010
Speaking at a Westminster eForum on Web 2.0 this week in London U.S. telecommunications giant AT&T has claimed that, without investment, the Internet’s current network architecture will reach the limits of its capacity by 2010 – see article news.zdnet.com/2100-1035_22-6237715.html
The above statement from AT&T, assuming their numbers are accurate, for the NZ government (National) to step in and grapple with this thorny issue here at home is a welcome step forward as the NZ communication network must be seen as a national asset that will drive NZ business productivity much as the road, railway networks etc. do.
But, as highlighted by AT&T, global internet capacity is also groaning under the strain of huge internet traffic volumes driven in particularly by video. You only have to sight the BBC in the UK. On one hand Ashley Highfield, Director of Future Media and Technology and a member of the BBC’s Executive Board is awarded in bring quality internet content to the British populace but on the other hand slammed by the telco industry for utilising their networks to deliver BBC content (which the consumer has already paid for by way of the connection fee). And from the UK experience it can be seen that ‘the people’ want content via the Internet - BBCi, the digital interactive TV service accessed from the red button, is now regularly used in around 40 per cent of all digital TV UK homes by around 14 million users, up from 1 million in 2000. Coupled with other initiatives from companies such as Microsoft the Internet is becoming the hub that ‘sticks’ all the owners and their devices together – the Internet is not going to go away and we need to be ridding the wave not floundering in the waves wake.
The NZ government (National) must do what it can to secure domestic broadband for the good of the country but it must also consider how the domestic Internet market connects to the rest of the world via networks such as the Southern Cross. Perhaps the NZ government (National) should also engage telcos from further afield such as AT&T as well as local telcos such as Telecom, TelstraClear, Vodafone etc. in their pursuit of putting together the ‘right’ plan. And what ever shape the plan takes one thing that should be set in stone from day one; the fastest possible network should be installed with redundancy and capacity for growth/technology refresh and be wrapped up into a sensible capital right off period i.e. 5 years so we can do it all again if needs be.
Finally, I think Cunliffe’s response was disappointing re Keys plan. It is better to build a high speed telecom network for New Zealand than build a short term win with what was a proposed water side stadium for the rugby world cup. And hopefully some of the policies that Labour have finally enacted with regard the NZ telco sector unbundling will lead, if not today, to one price for all wholesale providers.
Let’s face it, New Zealand’s don’t care who builds the high speed network just as long the deal they get at point of sale is fare and reasonable – just get the job done, done well and done now!
Dermott, Im really coming from an IT background, imagining how something like google or facebook et al., could have got started here. We have the expertise, but i dont think we have the free capital. From my time in the New York, there were lots of people willing to throw 100K at a kooky idea to see what happens. No real expectation of success, more an option to be in if things start to look interesting. That doesnt happen here. And 100k is a lot in internet terms.
I believe the cost of failure in NZ is too high, and it is paid by the people who risk. There is not enough spare cash available in NZ to fund high risk, uncertain payoff (a la google, facebook or the next gen versions), and the government surely has a role here.
Broadband is simply an infrastructure project. Great that Key said that, and kudos to him for making a clear stand. I just think building a superhighway to your a flash new supermarket is pretty hopeless if someone else owns the supermarket.
I think a Governmental policy that pushes to high-speed broadband is a good thing - productivity enabling for “weightless economy” businesses makes a lot of sense for NZ.
So I’m happy with a statement that National would be willing to put up $1.5billion to make that happen. But nothing resembling a plan for delivering that was in Key’s speech and that has me a little worried about the $ and dates (why do you think giving $1.5billion will make the difference if you don’t actually know how it’s going to work?)
NZ Institute’s model was built on a price-regulated monopoly that bought back all existing copper and fibre networks from Telecom et al and ran the whole lot themselves. Given Mr Key’s criteria of:
- alongside additional private sector investment
- open-access;
- ensuring the investment does not see already-planned investments cut back;
- ensuring increased broadband services;
- and making sure the investment does not end up lining the pockets of incumbent industry players.
then that model doesn’t fit. I can’t see how any model will operate in the criteria he’s outlined?
It is great to see National “coming out of the closet” finally with some policy direction that counts. As a business owner they’ll get my vote regardless. However, Maurice Williamson is not half the man that David Cunliffe is with with regard to technology vision, and in my opinion can’t be part of the National lineup. Labour is correct in their assertion that he is responsible for keeping Telecom in the monopoly position that it held for so long, turning a blind eye to the realities that competitive new entrants had to face - although to be fair, it did take Labour two terms to turn it around. He failed to listen to the industry and “walk a mile in their shoes” and as a result prolonged the agony that the country had to endure. He’s a dinosaur that needs to retire, before the next election.
In response to Mike’s comment above about the benefits of FTTH over ADSL2 - the most obvious response here is upload speed. FTTH allows for symmetrical bandwidth so you could have as much upload bandwidth as the ISP allows. ADSL2 has a theoretical maximum of 3.5mbps, but most users will only get around 1mbps upload speed. There are lots of applications that could do with more upload speed such as VOIP, and especially for telecommuters that need to transfer large files to and from their offices.
I agree, Broadband should be regarded as basic infrastructure. In a world that is continually breaking down global boundaries, New Zealand must maintain (or build) a competitve infrastructure to attract and keep key talent. In 10 years time Broadband will be regarded the same way as Television or a Mobile network was 10 years ago. The vast majority wouldn’t reside permanently in country without it.
The definition of Broadband will not be 24 Mbps downstream (max) / 1 Mbps upstream as supported by ADSL2+ today. ADSL was a technology invented in the early 1990’s to extend the life of incumbant Telco’s investment in copper lines. Fibre offers a price per megabit that can’t be beaten by competing technologies, be it copper or wireless based.
Because New Zealand is so sparsly populated, we won’t generate the scale that will justify a commercially viable fibre to the home rollout in all but a few pockets of the country. However thanks to the telecommunication sector reregulation, we will get commecially viable competition for backhaul and backbone infrastructure. This will boost our meager 24Kbps or 32Kbps average per user bandwidth that is allocated today to something more useful.
I beleive that choosing fibre as the last mile access technology is the right one and will server us well for the next 10+ years. I also beleive it won’t happen for the vast majority without some form of prive-public partnership.
But… I was a bit concerned that John was holding up faster broadband as a panacea for increased productivity in NZ.
I would have thought faster broadband was recipe for significantly decreased productivity in most workplaces.
There is truth the following comment.
Remove the Red Tape, then Fibre Optics will follow.
the internet is all about shifting power and value to the network edge (which completely wrecks the old world telco model of locked-in inteligence within the network).
so better, faster net access makes it possible for us all to consume more of those edge-resident high value services.
the question is who owns the current crop of high-value services, and who’s building the next generation? NZ misses out on the former, so we urgently need to be involved in the next google if we want to keep NZ from slipping away to become a sleepy polynesian economy.
Did Key mention anything about how he is going to support more undersea cables? I thought the bottleneck is actually getting the packets into the country.
I don’t need fibre to my house as I can’t even get close to filling my 7Mb ADSL. Though once the international cables are sorted, then it may be worth looking at fibre.
[...] lot of this stemmed out of one of Rod’s posts about flat rate mobile data and National’s fibre plans, and some interaction with Paul Brislen from Vodafone NZ (ex of IDG / ComputerWorld) If anyone can [...]
[...] see in Rod Drury’s blog that National have released their first real economic policy and it’s to do with funding [...]
To Mike at 3:00 pm on 23 April 2008
You asked someone to suggest some things that broadband faster than 24 megs is going to ratchet up to have a major effect on our productivity. You then suggested that we spend that money on research and education instead. Research and education are exactly the things that require real fast broadband, right now. Did you know we update our NZ mirrors of most of our major bioinformatics databases by *getting a hard drive sent from Australia once a week* - this instead of downloading updates nightly. This cripples scientists and engineers who use these databases as their main research tools. Education is also starting to use the internet and internet media in a manner that makes it critical not only for children to have fast access at school, but also at home. Fibre to homes is about getting fibre to everyone’s home, at competitive prices. You obviously already have reasonably paced broadband -if not 100mbps. Most people do not, unfortunately.