The Greens ICT discussion paper

The Greens have put out a nine page discussion paper on some ICT issues. Good to see some policy discussion occurring. Some of the challenges they cite are:

New Zealand is reliant on a single fibre optic cable system connecting us to the rest of the world. This vulnerability is an issue for the entire New Zealand economy, not just the ICT sector.

Reliance on a single provider for our internet means higher prices, data caps, and less innovation for services. In time, international capacity will also become an issue. And a single cable system means that our link has less resilience. If the cable breaks or a technical fault occurs (as it did on November 9, 2012) then New Zealand may remain disconnected from the rest of the world until the connection is repaired.

I certainly agree it would be great to have competition for Southern Cross Cable, and lower prices and larger (or no) data caps. This is generally occurring anyway, but international cable competition would help further.

The technical vulnerability is somewhat over-stated as the Southern Cross Cable is a figure of eight loop and even if one portion falls over, service shouldn’t be significantly disrupted.

As fibre to the home gets rolled out, bandwidth needs will increase almost exponentially.  However against this cable technology improves and SCC has already increased their capacity by 700%.

The New Zealand Government is indifferent to the local ICT sector in its current procurement policies, resulting in the purchasing of proprietary software from foreign companies. For example, the first part of a $2 billion Inland Revenue IT contract was awarded to French firm Capgemini and was designed in a way to make it nearly impossible for any New Zealand provider or group of providers to bid for the contract.

When all other things are equal, of course you want NZG to use local firms. But all other things are rarely equal.  All oppositions always complain about overseas companies winning tenders, but never change anything much because it is both illegal to do so under many trade agreements, but also it is impractical. Do you put in place a rule such as go with a NZ company unless they are 5% more expensive? Why 5%? Why not 6% or 4%?

Anyway the proposals:

The Green Party proposes that the Government takes a $100 million cornerstone investment in a second fibre optic cable to ensure it is successfully constructed and stays in New Zealand control.

The NZ control part is silly xenophobia. Southern Cross Cable majority shareholder is a NZ company.

As to the substance, I am unsure that the reason Pacific Fibre failed was lack of capital. Many people were willing to invest in it. Their failure, to me, appeared to be an inability to get enough long-term customers to make it profitable. This was no fault of the directors. It is a very very difficult proposition to get long-term customers against an incumbent who already has customers at very high initial rates, and can lower marginal rates massively and still be competitive.

Competition would be good to set off such a price war, but merely having the Govt invest $100m into a company does not mean it could successfully compete.

While this is a significant investment, it amounts to 0.8 percent of the National Government’s $12 billion spend on new motorways. Reprioritising this spending would enable a $100 million investment in a second cable without adding to Government debt.

Oh this is nonsense. First of all the motorway spending basically comes from petrol tax. Are the Greens really saying they will use petrol tax to fund a part-share in a fibre cable? Secondly the Greens have already claimed all the motorway funding for rail and other projects.

There are pros and cons of a Govt investment into an international cable. However it is dishonest to claim it won’t lead to extra debt – of course it would.

We propose that government agencies be required to consider the wider economic benefits to New Zealand of supporting the local ICT industry when making purchasing decisions.

I think you will find most already do. This won’t change anything I’d say.

As a first step towards developing awareness, government agencies will have to measure how much of their current ICT spend is going to local companies and report on it.

That’s not a bad idea though. In fact I believe all government contracts quantums should be publicly disclosed

Government agencies will be required to use open standards for new projects and use open source software, where possible.

Many government agencies are already big open source and standards users. I’d be careful though about making open source software a requirement, unless impossible. That is a step too far. For example it would mean no school would be allowed to use Microsoft products.

Finally, we need to amend the Patents Bill to prevent the patenting of software

And here I agree.

Overall some good issues the Greens have touched on, but the solutions are very debatable. But that is what discussion documents are for.

You can provide feedback to the Greens on their discussion paper here.