Broadband: consensus on problems but not solutions

Fibre Fund proposal discussed

Discussions of broadband strategy between telcos, financiers, policymakers and ICT industry luminaries in Auckland this month reached no startling conclusions or clear consensus on solutions, say participants.

But there was a valuable airing of different points of view and consensus at least on the key aspects of the challenge, says Xero’s Rod Drury. Some media commentators’ hopes of a quick agreement between telcos on cellsite co-location were not fulfilled.

Businessman and Growth and Innovation Advisory Board chair Stephen Tindall headed the discussions but declined to speak to media afterwards.

“This was a first step in the process,” Drury says. “It put a lot more focus on what the real issues are.” One of the most significant questions discussed in his view was “funding separation — ensuring that no one company can exclusively monetise major broadband capacity.”

Drury says the meeting established that an important and basic decision for the immediate future is where to place the greater emphasis and larger funding — on improving the capacity of “last mile” connections from the local node to the business premises or home, or putting more capacity into the network backbone, particularly links between New Zealand and the rest of the world.

There were, and will continue to be, discussions on “tuning market conditions to get private industry to invest in broadband infrastructure,” he says.

One of the plans discussed, as highlighted in Computerworld last week, was 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.

“I think the meeting went very well,” Macaulay says. “I got the chance to have my say. There was no agreement on anything yet but it was good that people had made the time available for such a discussion” — and intend to continue to do so.

A lot of the telco representatives present didn’t understand the Fibre Fund model, he says, and argued that lack of fibre wasn’t the problem.

“They say there’s too much fibre already” and the problem is getting its capacity used and distributed properly. The question then, he says, is whether normal competitive market forces will ensure good distribution or whether some form of central direction of fibre development and distribution is needed.

The meeting included representatives of major telcos and network builders, fund managers, politicians and Ministry of Economic Development representatives as well as a representative of the New Zealand Institute, who was not immediately available for comment.

The event was “a very positive step forward” Drury says, and is something New Zealand could achieve more easily than larger countries with a more formal approach. Here, he says, it’s relatively easy to get all the right people in one room quickly.

“While there was agreement on the vision of improving the country’s broadband infrastructure, it is fair to note that there was a robust debate on the most appropriate means of incentivising investment,” says Stephen Tindall, who chaired the discussion.

“The participants explored a range of options, including regulatory relief, structural separation, establishing a collective funding vehicle, to invest in infrastructure, and government ownership of infrastructure.”

The session has generated a long-term Broadband Investment Forum, which intends to meet every two months. Discussion on key issues will also be facilitated through the Ministry of Economic Development’s website.

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