The government has been relying on competitive tenders to provide regional broadband, but may soon find itself the owner of a national high-speed fibre-optic network if its proposal to buy Tranz Rail’s rail network is successful.
The heads of agreement between Tranz Rail and the crown lists the fibre network among the assets the crown would pick up.
Internet NZ head Peter Macaulay is enthusiastic about government involvement though TelstraClear’s current use of the cable could throw a spanner in the works.
However, IT and transport minister Paul Swain told Computerworld there were
no plans for the network if the government did become the new owner. “I think it’s just something we’d have to look at if our tender is successful.”
Swain says the government is concentrating on the rollout of broadband services to provincial schools and communities through Project Probe, comparing the improvement over dial-up services to the switch between black and white and colour television. “It’s a leap of that magnitude.”
Asked whether there would not be demand for affordable, higher-speed networks, Swain says that demand would come “once people have seen that the basic platform’s there”.
InternetNZ has been lobbying the government and major telcos to deliver cost-effective broadband throughout the country. Macaulay welcomes the prospect of government ownership of the fibre network. “That would be absolutely fantastic.”
The government has resisted calls to involve itself in building or delivering broadband services, Macaulay says. “They have made it quite clear that they don’t see a state role in the infrastructure at this stage, but they’re happy to work with us.”
Macaulay suggests that the Tranz Rail cable could be used to connect “lilypads” — local wireless networks — and is optimistic international bandwidth could be obtained from the Southern Cross cable. “My understanding is that they’re only 30% lit, and of that they’re using 10% to 15% of the capacity.”
If the sale goes ahead, one potential barrier might be TelstraClear, which has an easement agreement with Tranz Rail. TelstraClear’s public affairs manager, Mathew Bolland, says Tranz Rail owns the cable sheath but TelstraClear owns some of the fibre that runs inside the sheath.
“Whatever happens to that cable, the other fibres can’t be used to do anything that would be competitive to us,” Bolland says.
Macaulay is unfazed. “That’s fine, we can do it in conjunction with [TelstraClear].”
Tranz Rail has been trying to sell the network since at least August last year. Last week the company announced a freeze on all asset sales, pending resolution of the heads of agreement and receipt of an expected offer from Toll Holdings.