Drury calls for research on govt network proposal

Telecommunications infrastructure is so important that government has to assume control, says Drury

High tech entrepreneur Rod Drury is calling on ICT minister David Cunliffe to commission research testing the viability of his proposed government-managed fibre network.

Drury has also welcomed the New Zealand Institute’s “So Far Yet So Close” report, saying it supports his own position and nails the importance of digital communications in modern trade.

Digital communications, or “digital trade routes” as Drury call them, is being pushed into the public consciousness as a crucial enabler for New Zealand business in the wake of a more consumer-focused debate about the quality and cost of New Zealand broadband.

Hard on the heels of Drury’s suggestion of a government-primed nationwide fibre network as our exporting on-ramp came the New Zealand Institute report, which was authored by chief executive David Skilling and analyst Danielle Boven. The report put the case for more offshore manufacturing by Kiwi companies, to bring them closer to their markets, and for more attention to “weightless” exports such as software, information-based service and consultancy.

The latter, and arguably the former, suggest increased investment in broadband communications.

Drury sees the New Zealand Institute report as a positive development. The Institute “really nails the issue”, he says, “and it’s good to see someone emphasising the importance of technology in facilitating our trade.”

There is nothing in it he would argue with, he says; “it’s a very high-level report, but it raises the importance of these questions”.

Previous government-sponsored exercises such as Probe and the Broadband Challenge, are papering over the cracks, Drury says, in relying on private companies, who have an eye primarily to profit for their shareholders, not the good of the New Zealand economy.

“They haven’t addressed the fundamental problem. [Telecommunications infrastructure] is so important that government has to assume control.”

Once the infrastructure is built, Telecom, TelstraClear and the like will almost certainly be users, he says.

“I think Telecom would be on to a real winner; they’d be free of having to look after the infrastructure and able to concentrate on offering services. That’s perhaps why they’re staying quiet about [my proposal].”

It will not be a question of a taxpayer-funded network, Drury emphasises, but of government stepping into a co-ordinating role. The internet is a user-pays model and as such it shouldn’t need funding in the long run, he says. There’s enough spare money “washing about the world” for government to borrow what’s needed to get the network set up then pay off the loan on the revenues earned.

Telecom and TelstraClear, in their arguments over the capacity of the Southern Cross cable, show they are still pricing broadband as a scarce resource, Drury says. It should be set up to be plentiful and dealt with on a cost-plus basis. “Cost plus 5% or 10% with a user-pays model.”

Everyone is aware of the scepticism that surrounds government-run businesses, he concedes. “No-one takes government involvement in business lightly, but I think a state-owned enterprise with a proper charter could make it work.”

The next practical step?

“I’d like to see [Communications Minister] David Cunliffe commission some research on the internet spend nationwide — even just in the government sector” as an indication of what might flow back into such a scheme to repay the original capital expenditure.

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Tags governmentbroadbandfibreNew Zealand Institutedrurytelecommunications infrastructure

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