It's the economy, stupid

Without broadband, NZ is nothing more than a farm at the bottom of the world

It’s hard to believe that in 2006 the number of dial-up internet users in New Zealand is still rising. Statistics New Zealand says the number has increased by almost 5% from last year and that’s from a pretty high base.

New Zealanders love the internet. We flocked to it in the early days, and we’ve used it religiously ever since — which makes the broadband numbers even more depressing.

What’s worse is, we were one of the first in the world with DSL. In 1999, Telecom rolled out JetStream with an unconstrained download speed, an equally unconstrained upload speed and a ridiculous traffic cap. Not a month went by without some poor soul writing to Computerworld to tell us they’d got a phone bill for thousands of dollars worth of traffic. Napster was particularly entertaining for that.

Since then, we’ve gone backwards. Forget unconstrained download, Telecom introduced a number of lesser plans with 256kbit/s download. Somehow that was supposed to cheer us all up. I know they told me repeatedly that I wouldn’t see any real difference between 256kbit/s and the 2Mbit/s plus I typically got on full rate JetStream. I can’t repeat what I said in reply to that.

It got worse from there — not content with throttling back the download speed, Telecom introduced slower upload speeds as well. Instead of the 600kbit/s I got on my connection, most folk were paying for 128kbit/s. Telecom did introduce a 192kbit/s plan but hurriedly dumped that in response to the Commerce Commission’s announcement on regulated speeds. Those customers on the 192kbit/s upload plans were supposed to be assured of retaining that speed for some time to come. Instead, that’s all gone by the wayside now.

Finally, Telecom is introducing the kinds of plans we should have seen six years ago. 3.5Mbit/s down, 512kbit/s up. There are a range of traffic limits and finally businesses can afford a plan that is comparable with the rest of the world instead of paying $2500 plus GST a month.

If we’re to make it to the top half of the OECD table we have to leapfrog Australia. The Aussies complain bitterly about their broadband service, and Telstra seems to spend more money on legal wrangles and lobbying government than it does on anything else. Last week the Australian competition watchdog reported that almost 2.8 million Australian homes now have broadband, up by 85%. There’s concern over the ditch that Australia just doesn’t get broadband and that it’s being left behind by its economic rivals.

Yet here in New Zealand we would love to see uptake rates of a similar nature. Not because we want to watch TV on the internet, although that would be good. Not because we want to play games online with “l33t pings”, although that would be fine as well. No, we want access to broadband for one simple reason: the economy will benefit from it.

I was lucky enough to chat with David Skilling, head of the New Zealand Institute, a think tank that looks into all things economic. Skilling made it clear to me that broadband is one of those technologies that isn’t, in and of itself, going to change anything significantly, but is used to enable other parts of the economy to grow.

Without broadband, New Zealand is nothing more than a farm at the bottom of the world. With broadband, we can become an economic powerhouse and add to our economic wellbeing. If we are facing recession, and it looks likely that the next few months will see limited economic growth, if any at all, then shouldn’t we be looking at the alternatives to grow our economy?

We were first in the world once, for internet use, and I’d like to see us back on top again. Let’s not forget that we’re a small nation, thousands of kilometres from our markets. Let’s put that classic Kiwi ingenuity to work and see about digging ourselves out of this hole.

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