OPINION: Is it time to press pause on UFB and RBI?

Process of deciding partners, negotiating contracts, and working towards Telecom demerger appears piecemeal and fragmented

We’ve written substantially in this publication about Ultra Fast Broadband and the Rural Broadband Initiative. It is because these two government-backed plans will lay the foundation for the telecommunications industry for the next 100 years that we continue to report on events as they unfold.

Lately the process has begun to seem even more piecemeal and fragmented, and it feels a bit like watching a train about to crash – or maybe three trains about to crash into each other.

Let’s start with Crown Fibre Holdings. It has one mandate – sign up partners to the UFB. It doesn’t appear to have a timetable, or any kind of public accountability except to despatch press releases when it anoints a new group to the negotiating table. Yet CFH is in charge of a $1.5 billion infrastructure build that will transform telecommunications in this country. One telco insider described the process as “black box negotiations” and certainly from the outside it appears that all parties are flailing in the dark searching for the light switch.

Then there is the decision to give Telecom/Vodafone the nod for the RBI. This is causing huge concern.

Consultant Jonathan Brewer writes on his website nztelco.com: “The idea of improving rural telecommunications by subsidising existing commercial entities in their builds of rural infrastructure only works with the belief that reenforcing the status quo can provide rural communities with a level of service superior to that provided by a group of subsidised competitors, or with the belief that existing regulations are sufficient to ensure high levels of service to rural areas that would otherwise be uneconomic to service.

“It is the opinion of a number of organisations, including TUANZ, Federated Farmers, and failed RBI bidders OpenGate, Torotoro Waea, and the Regional Fibre Group, that the government’s proposed path forward will not improve services for rural New Zealand. Given the history of investment in rural broadcasting and radiocommunications infrastructure, I am inclined to agree.”

Thirdly there is Telecom’s proposed structural separation, which the telco says will take many months to enact. There appears to be no guarantee that it will get the UFB, in which case a demerger is unlikely. There is a weird parallel process going on with the late introduction of a Supplementary Order Paper by the MED that is supposed to tidy up all the unanswered questions. But will it instead wind back gains already made for competitors under Local Loop Unbundling and Operational Separation?

The overriding issues appear to be threefold:

1. No transparency in decision making.

2. Deep mistrust held by a number of stakeholders in the current process.

3. Three separate processes — UFB, RBI, Telecom demerger — all of which appear to be taking place in isolation.

I can’t help but wonder if it isn’t appropriate for what David Lange once famously called “time for a cup of tea”. Time to push the pause button and have good look at the entire process.

Here are some of the ideas being floated in some of the informal discussions I’ve taken part in recently with people who care about this issue.

• Create a secretariat attached to the Prime Minister’s office that will be in charge of the RBI, UFB and the Telecom demerger. This secretariat would look at an overarching digital architecture for the entire country.

• Regulatory oversight on all networks to stay with the office of the Telecommunications Commissioner.

• Prioritise Christchurch. Fibre networks need to be part of the rebuild, otherwise it’s an opportunity lost. Imagine if they mend the roads and then have to dig them up to lay fibre because Christchurch is well down the CFH queue for UFB?

• Look at the role of Kordia — should it exist to compete with private industry in the ISP space (Orcon) and international connectivity (Pacific Fibre)? Could its assets be used in rural areas, so that competition is at the service levels rather than the core infrastructure layer?

I don’t expect perfection. But what I would like to see is taxpayer money being used to start this country on the road to ubiquitous fibre connectivity for all its citizens in a way that is open, transparent and democratic.

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