Imagine broadband networks in New Zealand run and funded like the roading infrastructure, with one company in charge of planning and building the routes, and telcos and end users separately purchasing space to run their “vehicles" or services on the single network. Ian Thomson, chairman of the 2020 Communication Trust, believes this would be a better option than the current arrangement.
“Competition on the network, not for the network” is the catch-phrase. In New Zealand, particularly its smaller communities, it is wasteful for network providers to compete with one another for tenders like the government’s Probe, and then often end up duplicating networks into communities newly awakened to the potential of digital communications, Thomson says.
The telco industry is vertically structured, with each provider approaching network building and service provision in its own “silo” and negotiating with the others, often protractedly and painfully, over partial sharing arrangements like wholesaling and the potential unbundling of the incumbent’s local loop.
Roading management and use is horizontally structured and electricity is moving from a vertical to a horizontal model, Thomson notes. Government is even considering small moves in that direction for the cash-strapped railway network.
“At present you can’t get on the rails unless Tranz Rail says you can,” he says. “But no one is suggesting that we build two railway systems and let competition fix the market.” That, he says, is exactly the way broadband telecommunications are being run.
The alternative system is working, for example, in Canada, where a remote community of 6000 people was “very badly served” for telecommunications.
The community itself put up a proposal to build its own network, then went to the cellphone and landline phone companies offering them the prospect of cheap “backhaul” to the remote community. They also approached the hospital, the library, the banks and other potential large users offering to handle their demand for broadband traffic.
There are some similarities in this “demand aggregation” phase to what took place in the early stages of the rural broadband projects subsequently assisted by Probe, but that is all taking place in the context of the existing telco business model, he says.
Under the Canadian model, large users like the hospital each buy a fibre on the link and a shareholding in the network provider. They still pay for the data they send over it.
Perhaps the closest approach to this “condominium network” strategy is in the networks being set up by Counties Power and by the South Waikato District Council, in association with startup network builder Rural Networks.
Thomson says he has discussed the proposal with a number of parties, including Industry New Zealand. INZ telecomms specialist John Houlker says there is a demand, to some degree unsatisfied by present schemes, for urban or suburban broadband, and the “condominium network” is one possible approach to providing for that demand.
“We’re certainly listening, but discussion is at a very early stage, and we can’t say yet what kind of involvement might be appropriate for government.”
The topic could also come up at this week’s Internet Summit, in Wellington, with an address from David MacNeil, director of network relations for Canarie, Canada's not-for-profit government-supported "advanced internet development organisation", and other sessions on broadband development.