Rural users are people too

Rural internet access. It's a tricky business. On the one hand, should Telecom realistically be expected to pay hundreds of millions of dollars to upgrade a relatively small portion of the population so they can access the internet?

Rural internet access. It’s a tricky business.
On the one hand, should Telecom realistically be expected to pay hundreds of millions of dollars to upgrade a relatively small portion of the population so they can access the internet? The costs are immense and the problems doubly so. New Zealand has one of the world’s highest instances of - get this - electric fences that interfere something shocking with Telecom’s lines. The cost in overcoming this, according to Telecom, is somewhere around $300 million to get to 33.6kbit/s modem speed or a whopping $500 million for 56kbit/s, let alone broadband access. New Zealand has lots of wrinkly countryside, apparently, and it’s just too costly.

On the other hand, the rural sector is largely responsible for what little money New Zealand as a country makes. Without the farmers we would be little more than a tourist resort with aspirations of becoming a knowledge economy. Is it right to deny our largest economic segment access to the internet with all its potential savings and new markets? Some can’t even get continuous good-quality voice connections let alone data links.

Telecom is currently bound by the terms and conditions of the kiwi share provisions, one of which states quite clearly that Telecom cannot differentiate between rural and urban users when it comes to service or price. Whether that continues under the telecommunications regime post-Inquiry is another matter. Our rural users are currently protected from the cold, harsh realities of commercial life in the telco sector. They are guaranteed a service, albeit at a hair-raising 9.6kbit/s.

This is perhaps the wrong way of looking at the rural user; there is a huge market potential there that we are ignoring. If you could work out a way to minimise the interference from an electric fence you’d have a billion-dollar industry on your hands — not just servicing farmers but think about pumping data down power lines the way they’re talking about in Europe and see how large the market could be. Imagine being able to shave one or two percent off the business costs for the dairy sector — not too difficult for your average B2B e-commerce package, I would hope.

Yet that’s a saving that would be measured in the tens of millions of dollars. Dairy and the other farming sectors are huge compared with the rest of New Zealand’s businesses. Forget the wine industry or accounting software — get with the farmers. Of course, they’re not the sexy end of the industry, but as far as I can tell they’re actually making some serious money and so far they’re a relatively untapped resource.

Instead of protecting the farmers from the telco market perhaps we should be encouraging other players to jump in and offer services to the backbone of our economy. Just look at Alberta in Canada — population just shy of three million, mostly urban but with a huge area to cover, around 186,000km of roads. The provincial government has just announced it will roll out broadband access to every rural community by 2004 at a cost of $C193 million to the people and a further $C100 million to the telco running the network. That's $490 million in our money.

Minister of Innovation and Science Lorne Taylor makes an interesting point, according to the official press release.

"As of today, there isn't the critical mass to provide incentive for a company to go into smaller communities and offer leading edge services at an affordable rate." This sounds like Telecom’s argument that it can’t be expected to support the smaller rural user without charging them more than the urban users. Mind you, Telecom was supposed to make public just how much it earns from the local loop — so far it’s only told us how much it costs, not what it makes.

So it’s a challenge then. Government, prove you’re serious about the knowledge economy and let’s see some money for broadband connectivity. Telecom, show us your books, as you’re required to do, so we can work out why it should cost so much more to provide 56kbit/s connectivity when the Canadians are talking about broadband for a similar dollar amount.

Oh, and somebody out there should work out how to cancel out the electric fence noise and make themselves a packet. Just don’t forget who told you about it.

Brislen is a Computerworld journalist. Send email to Paul Brislen.

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