MED process questioned in rural broadband bid
- 13 March, 2011 22:00
Telecom and Vodafone’s no show at a recent meeting of business leaders in Wellington hosted by the Federated Farmers to discuss the Rural Broadband Initiative has raised the ire of many.
The meeting was hosted by Federated Farmers, which described the non-attendance as wholly unsatisfactory and a prevailing “we won, you lost” attitude.
Telecom responded in a statement that it had engaged extensively with Federated Farmers as it prepared its RBI bid and with many of the organisations that attended the session.
Telecom did, however, attend the Maori Digital Forum in Hamilton later that week.
Following the meeting, Computerworld was approached by several concerned parties. All had similar questions and were less than impressed with the bidding process managed by the Ministry of Economic Development.
“These are generational decisions. A lot of people are uncomfortable about the process, which was not as exhaustive as it should have been to get the best outcomes,” says Chris O’Connell, a past chairman of TUANZ and a current board member. “This should be about the future. We need flexibility as new technologies emerge.”
MED’s independence questioned
He is concerned that the consultant used by the MED to write the strategy became the rural broadband relationship manager at Telecom.
The MED responds that the consultant, Tony van Horick, was contracted at an early stage in the RBI to develop a preliminary RFP document and, at the time was not involved with Telecom or any other telecommunications/infrastructure provider. He had no involvement in the development of the RBI policy and the RFP released last year.
O’Connell points out that the Ministry of Education had more input into the shape of the RBI than did farmers or Maori.
“They were involved in the tender specification and were on the evaluation panel. MoE will only be subsidising the tails that connect to the RBI. What happens to the entrepreneurs who already offer fibre connection to some schools?”
MED says MoE was involved in the process to ensure that sensible decisions were made about the level of service that schools needed. It confirms that an MoE representative sat on the evaluation panel.
O’Connell says the MED has a credibility issue. “They run very opaque processes and there is no vendor-neutral advice.”
The ministry responds: “The RFP process was clearly set out in the RFP document. MED also engaged Audit NZ in the evaluation process, who reported that ‘nothing has come to our attention to indicate that during the period of engagement the tender process has not been conducted in accordance with recognised good practice and with due regard to probity’.”
Targets too low
Telecommunications consultant Jon Brewer says the Telecom/Vodafone proposal can meet MED targets, but those targets are way too low.
“They can be met with existing technology. The MED has failed in its process to bring in competition,” he claims.
Brewer says that any infrastructure should be built to sustain multiple providers from day one.
“The problem is that giving money to Vodafone allows them to be the first player on a tower. It won’t be economic for others.”
He says vendors should be charged on a cost-recovery basis. Instead, “the existing owners see new tenants as a way to increase revenue”. And he is concerned that having a single mobile provider is “just not safe” when and if the service drops out.
‘When you build a cell tower, the most intelligent thing to do is to have as much shared infrastructure as possible.”
DataLight director Roger MacDonald is of the view that Telecom will look to extend the usefulness of its 5Mbit/s DLAMs which are coming to the end of their life in urban areas.
“This will allow them to flush out all the old urban crap and put it into rural,” he claims. “Rural will be used as a dumping ground.”
Another attendee at the Federated Farmers forum, who did not want to be named, says members are increasingly unhappy.
“They want better cellphone coverage but that’s a tactical issue. Broadband is strategic.
“Telecom and Vodafone will make their revenue from cellular. Broadband is costly to build, so their proposal is under-specified. They’re using the RBI to get funds from the government to get into the cellular space,” the person claims.