My understanding is that the commissioner is saying (in my words) “don’t rely solely on Telecom’s infrastructure — it’s old legacy stuff with no future — focus instead on making the New Zealand broadband internet using newer stuff”.
I agree with him. New Zealand has had the best deregulated environment for the past 12 years and has largely squandered that advantage.
I believe there are plenty of alternatives such as fibre, wireless and cat-5 with alternative architectures that are viable and scalable. Accept the fact that Telecom’s local loop is based on older cable which doesn’t meet many requirements other than a phone and DSL, and is of diminishing value for real broadband.
Every effort overseas (and remember this issue is all about economic development, not communications) sees countries building new networks. You can see how much Telecom NZ values New Zealand by looking at how many new advanced networks it is building — or not.
This is 2004 when 1Gbit/s switches sell for less than $300 and interfaces for less than $50. When we can deliver a Wellington and Auckland telephone number in London with amazing clarity and 4 cent per minute calling. Or intercity for less than 1 cent. On a gigabit connection a phone call is just nothing. This is the reality today; the Telecom local loop won’t give it to you.
Now lots of people will argue that this costs huge amounts of money, and needs huge numbers of people. That is correct. That is why the issue is one of economic development. Creating jobs and wealth, initially building new networks, later on new products and services.
In terms of business models, look back in time and see how little New Zealand got power to its smaller towns and cities. They were built by community-owned power boards.
It’s a very effective way of raising the capital as well as providing lots of local employment. They weren’t built by NZED or Transpower, and Telecom won’t invest in real broadband in those areas while its share price value slides to zero.
So the regulator has tried to define more clearly how others can play on Telecom’s network, while giving space for more progressive others to build past them.
If you want to save $5, sure, fight over the Telecom network. But if you want the bigger benefit, then LLU has no value.
Recently a colleague mentioned that one of his workmates, an immigrant to New Zealand, was leaving, with the following explanation. He was concerned the kiwi attitude of “sit around and wait for others to do it for you” was teaching his young children to be lazy.
The LLU debate is just like that. Some telcos are just sitting around waiting for someone to do it for them.
People in communities paying too much for phone line rentals should be advocating their local council build real broadband networks, in the same manner as electricity spread throughout the country. If every home invested $5 a month, that certainly gives good funding for a new network.
Naylor is a driving force behind Wellington’s pioneering InfoCity municipal networking strategy.