Saving the south from tech redundancy

High-grade telecomms services are as good as non-existent in some rural parts of the country. But the boss of Clutha District Council can see a very practical way around the problem.

High-grade telecomms services are as good as non-existent in some rural parts of the country. But the boss of Clutha District Council can see a very practical way around the problem. There’s an observation in the south, says Balclutha man Ciaran Keogh, that if every sheep had a cellphone there wouldn’t be any problems getting rural telecommunications services. It’s an interesting mental picture but Keogh, who is boss of Clutha District Council, has a more practical idea about how to improve telecommunications in rural areas – particularly in the southern part of the South Island where he’s based. Keogh says a lot of the new heavyweight telecommunications infrastructure is stopping at Christchurch – or gets as far as Dunedin, at best. He believes a single provider for hardware is the only way to advance telecommunications in rural areas. He suggests local authorities within an economic region band together as buyers' agent to negotiate a standard of service which meets the needs of the community. It could work through a cooperative trust, a local authority or a statutory body. He says his idea would allow telcos to “get down to the business of providing the big picture” while local authorities become the infrastructure provider. “It’d be allowing them [telcos] to function as a free market.” The local authorities would rate for the actual lines, which Keogh says is identical to the way they provide roads and is similar to the way electricity is provided. “There’s a line charge which is effectively an infrastructure cost and there are the supply costs on top of that.” He says his idea effectively unbundles the local loop – “but not in a way that imposes on any one telecomms provider". “What I’m proposing is that outside the areas where there’s a substantial market able to support two or three operators, that we should look at some form of infrastructure monopoly – a hardware monopoly anyway … “We [local authorities] probably would just end up being lessee of a setup on behalf of the community. We’d probably own things like station sites, but even that’s not really necessary. Really all we’d be doing is aggregating demand so we could deal with one entity.” Under section 657 of the Local Government Act local authorities can contract for the provision of telephones and telephone lines and pay for it through the general rate. Keogh says it was probably never intended to do anything quite as far-reaching as his idea but adds that it’s no different in a conceptual sense than water, roads, sewer and power. “We’d use best of private enterprise to achieve this public benefit solution. Again, roads are a classic case. They’re maintained by private companies, their design is by private companies, the commerce on the roads is done by private companies and the local authority effectively acts as agent. You just need someone who stands there and says this is what we’ll spend and make decisions as to what [consumers will] forgo or what additional risks they’ll take.” Keogh says local authorities, on behalf of consumers, could do speculative things that the private market would never do. “The community can decide to invest in infrastructure that’s beyond what the market would provide. “ He says the other real beauty of some form of aggregating the buyer power is that you don’t need regulation, which he believes is inherently inefficient. “It’s good for lawyers and not much good for the consumer. If we have the standard of local supply dictated by the local market, by the consumers in fact, you don’t need to regulate.” He says his idea would create equality between the buyer and seller in terms of market power. “At the moment we’re getting a take-it or leave-it service – the buyer really has no real influence as to the overall standard of service.” He says one of the problems with telecomms is that providers are becoming wedded to particular technologies. “That’s quite limiting because quite often we might need a composite of technologies to make the thing work … We need to have a pooling of what’s out there and use the best of everything. We can’t do that in a competitive market.” So what would the benefits be of improved telecommunications in rural areas? "It would help stop businesses moving away. Already there are businesses in Dunedin moving because they can’t get cheap airfares. There's the same danger with the high-tech cluster of companies in the city, which need good telecommunications. “A cluster like that is actually very valuable to the community and if they don’t have the technology they need to keep up to speed with everybody else, they’ll shift to where it’s at.” He says there’s a big public benefit to the provision of infrastructure. “Having good telecomms down here enables a whole lot of industry to occur and that generates a whole lot of business and so there’s a multiplier effect that’s of benefit to the community. We could run a lot of infrastructure at a loss and still make a real benefit.” As for specifics, take the sheep and the cellphones observation - or sheep and chips to be more precise. Keogh says wireless communications will allow high-level monitoring. Farmers could put chips in each animal’s ear. Very high levels of monitoring could be done, meaning a processor (a freezing works) could be aware of the standard and state of all the stock in its supplier market. That information could be used in marketing to get higher premiums. “You could be talking 10 or 20% on the gross value of this product. It can be done at a relatively small cost – so it’s actually gravy. So you could have a huge multiplier on the net value of the thing.” Farmers could also have things like infrared laser monitoring of their dry matter content on your paddocks. Keogh says there are already programs that give farmers pasture management regimes based on dry matter – allowing them to calculate the amount of feed coming off an area and managing their farms efficiently as a result. “There’s nothing stopping you having GPS-enabled fertiliser spreaders which are actually varying the fertiliser application by the square metre basically as you drive along … That has environmental benefits and cost benefits.” Health and education could also benefit. Schools in rural areas can’t always provide a broad curriculum because they don’t have enough students. With good telecommunications, students could enrol in courses at other schools and work online. In health, rural GPs could have real time video for a second opinion. District nurses or ambulance staff could do first line response backed up by a specialist. If such benefits are fully realised Keogh reckons we could one day see a population shift south again.

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