Reaction to National’s $1.5 billion fibre to the home plan

Lots of stories on this, so just a bit from each. First Mike Houlahan writes the main story for the Herald:

National’s ambitious billion-dollar-plus plan to bring faster internet access to three-quarters of New Zealand homes and companies has been hailed by business and internet groups.

But the Government says it is extravagant and opportunistic.

The partisan side of me is delighted to have Labour saying it won’t match the commitment. The non-partisan side hopes that they will make a similar commitment before the election.

Peter Griffin blogs:

A year has obviously changed a lot. The broadband debate has stepped up a notch and National’s play here with a sizeable amount of funding shows how seriously it now considers broadband to improving our productivity and growing the economy.

“National’s medium to long-term vision is for a fibre connection to almost every home, supported by satellite and mobile solutions where it makes sense,” says Key.

Paula Oliver looks at the politics of it:

The broadband announcement is all about Key showing he has a wider plan – outside that old chestnut of tax cuts – to lift New Zealand’s future economic performance, productivity and wages. …

In New Zealand, the political positions are reversed, with Key on Rudd’s side of the argument and Labour sounding more like Howard. …

Communications Minister David Cunliffe says the Rudd/Key idea would put Telecom back into a monopoly position and pour taxpayer money into the pockets of that company’s shareholders.

But it was difficult yesterday to find too many people close to the issue willing to rip into Key’s move.

To avoid Key wrestling the issue away from Labour and in public minds making it his own, Labour needs to reveal – and soon – more of its big plan for broadband.

National is very aware of the need not to have a vertically integrated monopoly over fibre instead of copper. One of the key principles that industry people have noted is that any such network will need to be open access.

Jon Hoyle in the Dominion Post reviews the announcement also:

Business New Zealand chief executive Phil O’Reilly said such a network would especially help small to medium exporters gain a cost-effective global presence.

It would also be a plus for multi-national companies considering setting up in New Zealand, and a reason for those already here to invest further. But even with the right regulatory settings, it would be hard to get the private sector to invest several billion dollars, Mr O’Reilly said.

Tuanz, an advocacy group for business telecommunications customers, said the policy would receive strong support from its members. .

Tuanz chief executive Ernie Newman said the Labour-led Government’s strategy had been too short-sighted and National’s policy could prove cost-effective in the long run.

Finally Vernon Small also covers it in the Dom Post:

Mr Key said yesterday that the “fibre to the home” funding, spread over six years, would lift productivity and wages, and help deliver a “step-change” for the economy.

A week after ruling out asset sales under National in its next term, he said a National government would keep a stake in the joint venture, which would require up to $3.5 billion of private sector money.

It would not replace other planned investment, would increase broadband services and must not “line the pockets of incumbents”. …

The Government is likely to announce its own broadband investment plan in the May 22 Budget.

Telecom welcomed Mr Key’s plan, saying it saw a big role for public-private partnerships and that it would work with whoever was in government.

It is good to see Telecom supportive in principle. If fibre is laid down to 75% of homes, then the demand for both domestic and international backhaul will be massive, and there will be significant opportunities for bandwidth and service providers to offer competing products over the fibre network.

Obviously the details of how investment in and construction of the fibre network would occur will be a major issue. There is one proposal on the table at the moment from David Skilling for a Fibre Co, which would have government, local government, telco and other private capital shareholding. I personally regard that as a workable model, but not necessarily the best model. The challenge will be to see if people can put up superior models.