Budget preview: Response on broadband expected

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Given its criticisms of National's $1.5 billion plan, what can Labour come up with?

By Rob O'Neill and Computerworld staff | Auckland | Thursday, 22 May, 2008

While most will be studying today's budget for news about tax cuts, the IT and telecommunications sector will also be watching for a range of other initiatives to boost New Zealand's knowledge-based industries and infrastructure.

Top of the list of expectations will be the government's response to National's $1.5 billion fibre broadband promise. National's plan has recently been the subject of criticism focusing on the proposal's costings and the country's ability to deliver the project within specified timeframes.

National's Maurice Williamson recently expanded on the plan.

However, Labour's signals ahead of the budget are all about a deteriorating outlook and on the need to deliver good social services, especially in health and education. Further, communications minister David Cunliffe's criticisms of National's policy have been so trenchant, Labour must either come up with a proposal that is significantly different, or perform a u-turn and appear to be following rather than leading.

Several rival structures for broadband investment have been proposed over the last year that could form the basis of Labour's response.

One such plan is the Fibre Fund proposal by Peter Macaulay, InternetNZ president and former head of Digital Strategy implementation. This sees a central fund, built by institutional and individual investors, and free to be drawn on by anyone with a proposal for adding to the country’s open broadband infrastructure.

Another model is that proposed by the New Zealand Institute thinktank.

The New Zealand Institute suggests that a single company be given monopoly ownership of “last-mile” connections between exchanges or street cabinets and user premises. Existing telcos, utilities, local and central government and other private investors would have shares in the hypothetical company, christened FibreCo, and contribute resources, including fibre ducting and electronics to the company’s operation.

FibreCo would be price-regulated by government and required to give all service providers equal access to its network.

Several telecommunications and technology journalists have been invited to today's budget lockup, so something significant is expected. But the exact form of any broadband commitment will be more important than any top-line dollar figure.

A range of other initiatives could come the IT sector's way today. An announcement on Health IT is also expected, as reported by Computerworld this month. Health minister David Cunliffe has said he wants to see the Ministry of Health take a leadership role in transforming health IT. That could see increased centralisation of District Health Board IT decisionmaking.

Initiatives in training and education are also expected and R&D could also feature.

Computerworld will be in the lock-up today and will report on developments as they emerge.