Opinion: Fibre benefits are complex and multifaceted

Each local fibre area has unique dynamics

Following the release of the papers outlining the government’s preferred approach to its broadband investment initiative, there were howls of disappointment from some who found themselves outside the areas where fibre is expected to be deployed.

An economics attaché at a local embassy commented to me that he was very surprised at this response. If the same announcement had been made in his country the response would have been incredibly positive, celebratory almost, but here in New Zealand we seem to want to disregard the upside and instead focus on the “one guy who misses out”.

The strength of the (negative) response is, I suspect, an indication of how important high-speed connectivity is, so much so that those who are outside the 75% fibre footprint seem to feel that they will be at a structural disadvantage.

But to some extent the response is also a symptom of the fact that we have not yet had a collective debate, or reached a collective understanding, of where the priorities for fibre investment should lie. Given the wide range of potential benefits that might flow from ultra-fast broadband, the criteria for maximising the benefit to New Zealand is complex and multi-faceted.

Let’s explore some of the factors through a few examples.

Auckland. Our soon-to-be super-city and by far our largest and most densely populated economic unit. Internationally, leading cities in regions have an economic performance that is about 25% higher than their share of the population. Auckland, however, is about on par with the rest of New Zealand. Broadband is one of many tools that could help unlock Auckland’s economic potential, by increasing productivity, including through reducing traffic congestion.

Oamaru. The last town to make the cut. For small centres like Oamaru the presence of fibre infrastructure may open up economic development opportunities that are currently inaccessible. For example, local sources of electric power generation and a diligent labour force mean that North Otago could be a prime location for datacentres and call centres.

Queenstown. Just missed the cut. As a leading tourist destination, horticultural/viticultural region, and magnet to the rich and famous, the Lakes District has a lot to gain by better accessing and promoting itself to overseas markets. As a showcase region for New Zealand, the intangible benefits are potentially as significant as the economic development ones.

Greymouth. Just missed the cut, and none too happy about it either. It’s hard not to be sympathetic with the West Coast’s position, given it is one of our country’s more isolated regions. One of the benefits of ultra-fast broadband for the Coast is to reduce the impact of its isolation and modest population base, by tapping into big-city scale economies — particularly in health and education. Greymouth could potentially have more to gain from ultra-fast broadband than a similarly sized settlement that is close to a big city.

Waikato. One of our major agricultural regions. Mooloo country is a good example of where the potential gains have relatively little to do with the high density population areas (which are less than 10% of the region) and a lot to do with leveraging additional value out of some of the strongest sectors of our economy.

And then there is the time dimension. One could credibly argue that we should start with the areas that are currently underserved, but are these the areas with the most to gain? And will this give the quickest return to New Zealand Inc?

With so many factors to consider, no one-size-fits-all formula can give the complete answer to where we should be investing. Every region will have its own compelling case for investment, which should lead to many more lively debates! I will be watching this space with interest.

Chivers is the CEO of the Telecommunications Carriers' Forum

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