National’s $1.5 billion fibre to the home plan
I have just returned from a Wellington Chamber of Commerce lunch at Te Papa where John Key announced the next National Government will invest $1.5 billion into extending our current fibre network, with the aim of having 75% of homes in NZ having fibre to the home by 2014. It got a very warm reception from the business audience
I am delighted, in fact beyond delighted. I’m thrilled. This is a stunning bold initiative, and one that I think is great wearing all my different hats.
Having served as the Public Policy Chair for InternetNZ (Internet Society of NZ) for the last five years, this is a massive step towards the vision we have of a high speed connected nation. And the level of funding and target timeframe is almost better than could be expected.
Fibre is to today’s economy what roads and rail were to us 100 years ago. One has to invest in the infrastructure before you get a return on it, from the services that can be delivered over it. This is why there is a legitimate role for the Government – there is a timing mismatch if you do not have the state invest capital in infrastructure development.
Especially pleasing was seeing a reference to the fact that the fibre network will need to be open access, and also done in such a way not to crowd out existing fibre plans. If implemented, this will be a public/private partnership with the public capital allowing the private sector to invest more.
As a National Party supporter, I’m also very pleased. I think it positions John Key and National as having an economic development plan which is focused on infrastructure investment. At a time when the Government has no real answers to the economic challenges facing NZ (except to say we can’t control petrol prices of food prices or house prices), and is mired in the repercussions from some silly stunts, National has seized the policy initiative.
What is good about today’s announcement is it is not in an area you normally expect National to lead. Everyone expects National to be tougher on law & order, and everyone expects National to cut taxes more than Labour. But this has been about showing a future looking vision of where New Zealand is heading.
Finally I’m just pleased as a New Zealander. The future of NZ does worry me. Seeing so many people leave for overseas, seeing our national income fail to keep up with Australia paints a gloomy picture for the future.
We have real challenges ahead of us – both economically, and environmentally. And the sad reality is that there are relatively few policies which are good for economic growth but also good for the environment. It can be a delicate balancing act.
But rollout of fibre to the home will, I believe, has significant benefits for us economically, environmentally, and in quality of life. What David Skilling calls the weightless economy, where our remoteness is less of an issue, will be a big part of our future. And having ultra-high speed broadband everyone will position us well to compete globally. No it is not guaranteed – few things are. But I think it is an investment very much worth taking – and for less than the cost of Dr Cullen’s cancelled chewing gum tax cuts.
The challenge now is for other parties to rise to the challenge set by John Key. For as much as it would be electorally advantageous to National for Labour not to make a similar commitment, I hope they do show similar ambition.
April 22nd, 2008 at 3:02 pm
Sounds like a good idea to me. In fact every blogger out there will feel an illicit thrill just knowing they can access the world unemcumbered by a long wait.
April 22nd, 2008 at 3:03 pm
Good for watching lots more p0rn too.
April 22nd, 2008 at 3:04 pm
Who says big business does not get a return for all those anonymous donations they made last year!
I wonder what broadband provider is getting the benefit of this lolly scramble?
[DPF: And that's 20 demerits for defamatory allegations. Sonic is the perfect example of the political bigot - will never ever say anything good about the other side]
April 22nd, 2008 at 3:08 pm
Since fibre optic cable is just like rail and roads, can we jump ahead to the part where we start ripping it out and selling the rights to install it for a dollar to an overseas investor? Would save a lot of time, money and wailing.
April 22nd, 2008 at 3:08 pm
There is no one who can argue that this is bad for NZ. Great stuff and about time too!
April 22nd, 2008 at 3:15 pm
Should we now change national Colours to Red. National Red sounds catchy.
The private enterprise party now the let the state take care of it party.
This leaves ACT as the only true Right Wing Party.
April 22nd, 2008 at 3:15 pm
Great news
Sonic With reference to DPFs comments about the future of the country I have a 26yr old daughter who is on her OE in the UK with her fiance They are contemplating whether to live in OZ or NZ when they return at the end of the year.
As a patriotic Kiwi I feel gutted at the thought of my daughter having my grandchildren who will grow up as Ozzies and who I wont see unless I travel there
And you know why they are thinking this way.
Cause your Socialist buddies have committed economic genocide on my country over the past 9 years.
They have laid waste to a wonderful country because they are wreckers who hate people who work hard.
They would rather support the oxygen thieves and wasters who are too dumb and stupid to get out of their own way and are easily bribed to vote for these bastards.
You and your Socialist buddies are a bunch of losers and tossers always on the take and the make.
And if its all so wonderful why are so many people getting on the silver budgie to Oz to live and work.
Dont see many heading from their to here.
April 22nd, 2008 at 3:17 pm
All this business control of things internet…..sniff.
Makes an old socialist like me pine for the days when govt would have run the operation and provided us with a service fit for we citizen kings.
April 22nd, 2008 at 3:29 pm
“WHo pays?” is the question I want an answer to.
This policy is going to be bad for you DAvid because it will just reinforce to the Standardistas how powerful and machiavellian you are
April 22nd, 2008 at 3:31 pm
The moderning roading analogy is a good one. Decades and decades ago when the average person didn’t have a car and deliveries supplied the things that you couldn’t grow or make yourself, a person might have said “Why do I need to have roading right to my home, I can’t see any advantage and I don’t even own a car – my horse is pretty darn good.” Now we can’t imagine an economy without modern roading, or telephones, or cellphones, or the internet (I mean can you imagine going back to 1990 when those last two examples were a rarity?).
I would suggest that in a few decades we wouldn’t be able to imagine an economy without a super-fast internet. We might have some visions of what is possible but I would suggest we probably can’t imagine what will happen – just like people couldn’t imagine how roading would change things.
It makes Labour “Economic Transformation” rhetoric a joke – they’ve been talking about it for eight years AND they’ve had the power to act, and we have very little to show for it.
And as for those who might ask “who pays?” – we will all pay for it because it’s a good investment. I mean are you suggestng that tax-payers shouldn’t pay for roading or electricity? Such comments suggest an inablilty to appreciate the signifcance of infrastructure for welfare of EVERYONE.
April 22nd, 2008 at 3:36 pm
“Cause your Socialist buddies have committed economic genocide on my country over the past 9 years”
Full-employment=Economic genocide?
Hey if you like OZ so much why not go and live there gd? Be close to the grandkids and have a better climate to live in.
After all you seem to consider your fellow countrymen “oxygen thieves, wasters, dumb, stupid and b*stards”
Why hang around mate?
April 22nd, 2008 at 3:37 pm
How will being able to use Trade Me, You Tube, I-Tunes and download porn faster make NZ more productive? We rarely use the internet for anything useful. I would sooner $1.5 billion of taxpayers money was spent on health or education – core government services. Also once Key has dug up the roads and laid all these new cables – how much will it cost a household to connect to it? (including digging a trench across their front lawn or up their driveway).
[DPF: You may not use the Internet for anything useful but I can't wait until I can stop flying to Auckland every few weeks because home video conferencing will be available. I also can't wait until I can access and run queries on some of my 2 GB databases at work from home.]
April 22nd, 2008 at 3:38 pm
EWS
Not only did they have the power, they had the money – emphasis on ‘had’
April 22nd, 2008 at 3:38 pm
Fantastic policy – even the buffoons at the Standard will have difficulty faulting this investment in infrastructure
More of the same over the next months leading into the election please National and I won’t have to vote for ACT.
April 22nd, 2008 at 3:41 pm
insider, indeed!
April 22nd, 2008 at 3:45 pm
Full-employment=Economic genocide?
Hows those mortgage rates looking? How about the milk price?
Hey if you like OZ so much why not go and live there gd? Be close to the grandkids and have a better climate to live in.
We want our country to be better sonic, we want people like you to mive to Cuna instead.
After all you seem to consider your fellow countrymen “oxygen thieves, wasters, dumb, stupid and b*stards”
I think he’s only talking about the socialists sonic – you’ve made the classic mistake of thinking that you represent the mainstream – you poor deluded soul.
Why hang around mate?
Can’t leave the country to the complete fucktards now can we…..
God forbid we come back, and all you dumbarses are running around trying to figure out how to run a power station….
April 22nd, 2008 at 3:48 pm
Great news! This will be especially welcomed by those of us who have chosen to live and work away from the major cities. His whole speech was good value – I’ve linked to it here:
http://keepingstock.blogspot.com/2008/04/national-to-invest-in-broadband.html
April 22nd, 2008 at 3:49 pm
God forbid we come back, and all you dumbarses are running around trying to figure out how to run a power station….
Atlas Shrugged: The Sequel
April 22nd, 2008 at 3:49 pm
Sonic,
You cannot assert that any kiwi who is concerned about NZ’s economy to the point of comparing it to Australia’s, or criticise’s the Govt’s performance, is therefore unpatriotic or hates NZ and would rather live elsewhere.
Such an assertion indicates to me that you can’t find other good arguements.
I mean c’mon. That’s like saying that every American who opposes the Iraq War must hate their own country and wants to live elsewhere.
If you want some respect, sharpen up your game.
April 22nd, 2008 at 3:49 pm
The way this country is going it will be just connecting fibre too empty homes. $1.5 billion on this when health and education are both dismal failures.Somebody has got the priorities wrong again. Oh well another 100 odd left the country for good today. How pathetic.
April 22nd, 2008 at 3:51 pm
Read it again Bevan. he calls socialists “a bunch of losers and tossers always on the take and the make.”
It’s ordinary Kiwis he is calling ““oxygen thieves, wasters, dumb, stupid and b*stards”
Poor GD is clearly not happy here, indeed I’m worried he is going to have a stroke, such is his angry anger!
A nice retirement to the Gold Coast, thats what our chum needs.
x
S
April 22nd, 2008 at 3:52 pm
As I said to bevan east Wellington read his comments again. He is not so much “concerned” as frothing at the mouth.
I fear for his health when the Nats blow it again and he has to face another 3 years of Labour!
April 22nd, 2008 at 3:54 pm
Andrew – the ECE business my wife and I own and manage is highly dependant on the internet for communication with our staff throughout the North Island. Increased access to broadband and improved speed will hugely improve our productivity, and will allow us to provide enhanced services for the families we work with. It’s a winner with me – and it will be for them as well!
April 22nd, 2008 at 3:54 pm
sonic no doubt you will be sucking up heaps of energy with a endless fibre cable. I reckon we should cut the cable so you pig Islanders have dinner by candle light. The Southern Lakes are that low you need a fibre up the dates of Klark and Key.
April 22nd, 2008 at 3:58 pm
I agree with John Dalley that this kind of action shows that National is not a true right-wing party. And good on John Key for that! Forward the Centre!
April 22nd, 2008 at 4:00 pm
National like Labour are a sick joke.
April 22nd, 2008 at 4:05 pm
woo hooooooooooooooooooooooooo
Dime’s a bit emotional right now.
hopefully labour copy the policy and we get this no matter the election result.
April 22nd, 2008 at 4:05 pm
I doubt Deepthroat is an ACT voter.
Whilst this policy is consistent with National being a conservative party, the fundamentals of the policy lack any real commitment to free enterprise.
The State doesn’t have to be dominant in infrastructure it’s a choice. And like all public policy choices there are costs associated with it.
The problem for National is that once one concedes the notion that the State is our saviour and hope in one area, one weakens the resistance to growing the Government in other areas. That is how the State grew in the first place.
I suspect Labour will be happy over this announcement and will probably seek to match it to some extent – thus it becomes bi partisan. Tacking and matching each other is what both Labour and National do at the moment.
They will probably rejoice that existing social policy arrangements will largely remain in place under a National led Government. Despite failure in public health, public education and the future cost of health services for retirees being entirely unfunded, National has little or no mandate to change any of these. Instead its big governmenting on infrastructure (one can just hear it now: what about the human capital and investing in people)
If they attempt any change because times are tough, because they haven’t talked about the problem of State attempting to deliver these services and solve every problem they will be portrayed as mean and uncaring.
April 22nd, 2008 at 4:09 pm
Read it again Bevan. he calls socialists “a bunch of losers and tossers always on the take and the make.”
It’s ordinary Kiwis he is calling ““oxygen thieves, wasters, dumb, stupid and b*stards”
Sonic, you are in dire need of some reading comprehension, here I’ll see if I can dumb it down to your level for you…
Cause your Socialist buddies have committed economic genocide on my country over the past 9 years
They (Socialists) have laid waste to a wonderful country because they are wreckers who hate people who work hard.
You see, when he states They he is talking about the socialists.
They would rather support the oxygen thieves and wasters who are too dumb and stupid to get out of their own way and are easily bribed to vote for these bastards.
Now this line requires a little bit of thinking and analysis, now I understand that you are unable to comprehend anything other than spoon fed Labour party hackery(TM), I’ll try my very best. The “O2 thieves and wasters who are too dumb and stupid” are the kind of people who spend all their wage playing pokies and boozing, then send their kids off to school without lunch or shoes – that particular group is also found that when confronted with adversity, such as rising food prices (not that it should worry them as long as the TAB still sells good old S&V crinkles), sit back and say “Aw don’t know what to do eh”. Instead of trying to better themselves through education or trying to be more productive to get a promotion, instead bitch to My Little to get them some more money for the pokies. These types of people typically vote Labour as well it is found, and we all know Labour only look after their own…..
God forbid they actually had to look out for the whole population…..
I fear for his health when the Nats blow it again and he has to face another 3 years of Labour!
Never fear sonic old pal, Mr Williams is doing his darndest to make sure Labour doesn’t have a show in hell!
April 22nd, 2008 at 4:15 pm
Sonic said: Hey if you like OZ so much why not go and live there gd?
Classic. Reminded me of this:
http://ifyoulikeitsomuchwhydontyougolivethere.com/
April 22nd, 2008 at 4:16 pm
Or maybe I mean this:
http://ifyoulikeitsomuchwhydontyougolivethere.com/
April 22nd, 2008 at 4:16 pm
Wow – Labour-lite preempts socialist policy now. I do applaud it however, but I also wonder, whether there is an intention to borrow to pay for it – as in the future generations will be benefiting from it yah dee yah…
(that is until there is a viable alternative to physical cable – which will probably be in place before we finish paying the debt off for this if in fact there is borrowing involved…)
Nevertheless – his speech was salient and intelligent, and as pointed out, visionary – but also realisably visionary. This is an issue that has been well thought through by Key and his advisors, and it shows. Given current Govt performance, it also indicates a competent govt-in-waiting, whcih will be increasingly reinforced as this election falls into shambles becuase of poorly drafted legislation. All Mr Key needs to do is sit tight and keep producing comprehensive visions and proposals such as this. Even if Labour do ‘me-too’ this policy – they still look shambolic and politically retarded.
April 22nd, 2008 at 4:16 pm
For a quick Cost/benefit analysis, 2 quotes from Key’s speech
“Today, I am pleased to announce that, subject to adherence to the principles I have just laid out, the next National Government will contribute an investment of up to $1.5 billion”
“Independent experts estimate those benefits will be worth between $2.7 billion and $4.4 billion per year.”
Note the Govt investment is “up to” 1.5 billion.
Sounds good, this is something that we need to remain competitve (actually regain competitiveness!)
April 22nd, 2008 at 4:27 pm
Sonic
Your eyes and ears are painted on I DONT WANT TO LIVE IN OZ I want my daughter to live in NZ
But as your Socialists mates have presided over an economy that has given us unaffordable housing low wages high cost of living she is quite sensibly looking at other ptions.
And she also is concerned her children will grow up in a country thats divided on racial lines with whitey forever being verbally beaten up and told to pay pay pay for stuff that happened in the Nineteenth Century.
Just to remind you we are now in the TwentyFirst Century.
The Socialists have squandered a golden opportunity over the past nine years to create a dynamic vibrant growth economy by encouraging thift and hard work through low flat rate taxes.
Instead they have installed the biggest social welfare system this countrys ever seen with citizens who earn three times the average income eligible to apply for and get STATE assistance.
They have acted like the medieval Lords and Barons who made their peasants dependent on them for their very existence
In the case of the Socialists its fiscal dependence. The poor sods are too scared to not vote for them because the Socialists scare the bejesus out of them by telling them the other side will take their security blanket away.
How can anyone with a brain not see that making people who are earning middle and above incomes have to rely on the STATE for at least part of their incomes is not encouraging individual responsibility.
I rest my case m’Lud.
April 22nd, 2008 at 4:28 pm
gd may not have to go to the mountain.
The mountain may come to gd.
Adoption of a common currency (ie Aust dollar) will be an indication that the last throw of the economic dice is past.
April 22nd, 2008 at 4:35 pm
[DPF: You may not use the Internet for anything useful but I can’t wait until I can stop flying to Auckland every few weeks because home video conferencing will be available. I also can’t wait until I can access and run queries on some of my 2 GB databases at work from home.]
But DPF, weren’t you bemoaning just last week how small Wellie is? Don’t knock the opportunity to get up to the big smoke!
April 22nd, 2008 at 4:40 pm
Do not feed the trolls!
You will never change their minds as they all have far to much to lose from a change in govt, never be fooled into thinking that Tane, Sonic and Roger are actually real left wing or Labour people, they are part of the ruling elite and as such they cannot afford to see a change in govt.
April 22nd, 2008 at 4:41 pm
Sonic,
I take your point. I withdraw and apologise.
That said, the ‘if you love it so much, why don’t you move to Australia’ comment is often used by Labour supporters against many who are simply concerned about the NZ economy.
The Prime Minister often attacked Don Brash in such a manner. Now, Brash should have had the political fortitude to take Clark on when she made such comments but he wasn’t very good at doing it. However, the economy is a concern, and painting critics as unpatriotic or such is not the type of response I expect from any political leader, especially the PM and Deputy PM.
April 22nd, 2008 at 4:44 pm
By the way Sonic Anticipating your retort regarding ToW settlements.
Mikey Cs got $500 million for the mid Nth Island settlement and another $500 million in the bucket to prop up the Maori Party support,
And you know what Sonic None of that money will get to the likes of the Kahui twins or any of the other children who need and deserve it
And thats what makes me ashamed of this country, Pollies civil servants and the other hangers on who take money off the likes of me and waste it away,
Hell Id rather cut out the middle man and wimmin and give my taxes that get wasted to the few really good charities that try their best to improve the lot of the underprivildeged depsite the best efforts of CLARK CULLEN and the other misfits who get in their way
And dont get me started on that waste of space Cindy Kiro or that other waste of space CYPF.
Both of them a big part of the problem
April 22nd, 2008 at 4:48 pm
“But as your Socialists mates have presided over an economy that has given us unaffordable housing low wages high cost of living she is quite sensibly looking at other ptions.”
gd, If you want to understand how and when NZ got onto the low wages/low skill road to relative poverty, you do have to look at the Employment Contracts Act 1991. When NZ employers found that they could simply add cheap labour (unemployment soared under the neo-liberal policies of the fourth Labour Government and didn’t peak until 1992) instead of investing in new plant, etc, guess what? They did.
And you can try blaming the Labour-led governments of recent years for the unaffordable housing, but it was National that introduced the RMA, and the Reserve Bank was responsible for monetary policy.
And you may think that Labour are responsible for high food and oil prices, but informed people know better.
Maybe the world is more complicated than you allow.
PS, This policy looks suspiciously like the state picking winners. Great stuff!
April 22nd, 2008 at 4:49 pm
The internet has moved value & control from the network core, out to the network edge. It is fundamentally different from the old phone network and well different from analogies with roading and railway infrastructure. So we need to careful not to blindly connect one infrastructure type with another.
While faster broadband gives use more scope to consume services, the real problem is that NZ doesn’t produce enough of the high value services that live at the network-edge. We should be focusing on creating valuable services that satisfy demand from a global audience. Anything less is, as someone else wryly observed, a lot of faster porn for farmers.
April 22nd, 2008 at 4:51 pm
gd
Great comments!
What does it say about our country when the Labour Party President is caught on tape – with a big fat lie
and the Prime Minister excuses his behaviour by saying “he must have been confused.”
The only people who are confused are Cullen, Helen and her corrupt little party.
April 22nd, 2008 at 4:51 pm
There’s no shame in voting for ACT, Deep Throat. But I’d expect you to hold your nose with one hand if you were considering ticking the blue team with the other.
If the RMA didn’t make it such a pain in the arse to lay some simple cables, a government patchup job like this would not be necessary. As it is, I am not convinced that the government will generate a $1.5B ROI. To do this, the economy would probably have to grow by about $4B simply as a consequence of the fibre network investment. That’s about 3% of GDP. I don’t care what anyone says, we are simply not going to generate four billion dollars worth of porn, music and video in any time frame that would justify the initial expense.
As I have said in the past, market intervention so that people can download movies quicker is no more justifiable than any other form of rightly reviled intervention.
UPDATE: Slightlyrighty – who are these independent experts? Convince me they are right.
April 22nd, 2008 at 4:51 pm
jafa
If we pretend just for a moment that the employment contracts act is the reason we have such low wages what do you have to say about the fact that your lot have had nine bloody years to do something about it?
The old “blame the Nat’s for everything” approach no longer washes with the public, the young lady in question would be stark raving mad to return to NZ at the moment.
April 22nd, 2008 at 4:54 pm
GD, two quick points
1. Young people from this country have always went overseas to work, there is nothing new in that at all.
2. Did you notice which party won the recent election in OZ? did you see they to are working out how to make restution to the people of the land for the thefts perpetrated on them?
You never know, perhaps the evil leftists will destroy the Australian economy too and then all the kids will come back home!
“they are part of the ruling elite”
Really, well if that is true I must say being part of the “elite” does not pay as well as you might think.
April 22nd, 2008 at 4:56 pm
Glad someone is finally pushing this. Rod Drury has been talking about this forever and as a serial entrepeneur and wealth creator (and job creator) we should be listening to his ilk. I also don’t care if we borrow to create something that will increase productivity. If we increase productivity then the country will make more money in taxes. To those short sighted enough to ask questions like “how will faster youtube increase productivity?” well you might want to investigate how modern business uses the internet. Try video conferencing for one. Our ability to compete on a manufacturing basis with the rest of the world is grealy diminished because of our high dollar and high labour costs. I don’t bemoan this but we must be increasing our exportable skills inverse proportionally to this loss of manufacturing exports. One way of doing this is I hope what F&P are doing, keeping the engineers and designers in NZ and allowing them to video conference with departments around the world. And for all the environmentalists, as Owen McShane has variously mentioned, tele-commuting is good for the environment. And this is only one benefit. Go ask someone in the local film industry how great it would be to be able to send a HD 60 second email commercial to Los Angeles without having to wait a few hours or having a custom satelite system installed, hell some of our LA trail blazers might work from NZ instead and start paying taxes here. Our nations future depends on a globally connected internet running at blazing speed, anyone who doesn’t realise this hopefully is not in a position of power. And to all those far right thinkers who think that National is selling out? Who cares. I’d rather have real internet in 6 years than wait for the magical deregulation to provide it and reap the benefits while we argue ideological semantics.
April 22nd, 2008 at 4:56 pm
getstaffed: While faster broadband gives use more scope to consume services, the real problem is that NZ doesn’t produce enough of the high value services that live at the network-edge. We should be focusing on creating valuable services that satisfy demand from a global audience. Anything less is, as someone else wryly observed, a lot of faster porn for farmers.
Qbik New Zealand produces a very well known internet connection sharing solution which has a built in VPN component. It’s an internationally acclaimed product and was one of the first, if not the first, proxy solution for Windows. Has been around since the mid nineties, I believe and is yet another example of Kiwi ingenuity relating to the net.
Although it is very useable under current broadband systems, having faster broadband makes working remotely through solutions like VPNs, online meeting software, etc. very attractive. There are benefits in remote working, better work/life balances, less congestion and even less need for companies to run and maintain large offices. We do not necessarily need to produce services to benefit from faster broadband. It’s doing high speed broadband a disservice to say it’s simply for faster porn. The real benefits do not necessarily stay with the web, but in what can be done with it behind the scenes so to speak.
Look at DPF’s example – having his meetings online and being able to query those large databases effectively and efficiently from a remote location. Consider the benefits for doctors, hospitals and so forth with remotely lead operations. (We were looking at that back when I was working on MIS in South Africa, I don’t know what the status of them are in NZ at the moment)
This is an enabling technology. I’m glad to see that there is government support for it and although I would like to see it as an exclusively private enterprise, that will likely not happen in the nearby future. This, to me, is worth a lot more than those pseudo science applications of a few days ago, or the Labour party’s attempted misuse of PS materials, etc. There’s real benefit here and if done properly – with a strong private component it would be good for us.
April 22nd, 2008 at 4:56 pm
Pull the other one sonic, as the “elite” , a Liarbour MP gets a quarter of a million $ per year !!
April 22nd, 2008 at 5:00 pm
Oh look, DPF gave me demerits for a fair point!
It seems it’s ok to talk about Labour donations for ever and a day, but mentioning the Nats donors is off limits.
Ah well, guess I’ll have to live with Mr F’s double standards.
April 22nd, 2008 at 5:04 pm
“Did you notice which party won the recent election in OZ? did you see they to are working out how to make restution to the people of the land for the thefts perpetrated on them?”
Err, what?
Sony’s confused again.
The vast majority of Aboriginal title claims are done and dusted.
eg. 40% of the Northern Territory is owned by Aboriginals.
There are no cash “settlements” a la NZ Maori.
Australians figure the mendicants get hundreds of millions thrown at them each year for little result…smart Aussies.
April 22nd, 2008 at 5:04 pm
haha sonic got 20 sin bin demerits. Life is sweet. Who the hell does this sonic think he is ?
April 22nd, 2008 at 5:06 pm
Same name, nothing in common. How hard is it for you to understand that some people want what is best for this country and know that Labour isn’t delivering it. The Australian Labour party’s honesty is refreshing and I hope they do well dealing with many of Australia’s societal problems. Your talk of elite only refers to your ego, whereas gd’s wish to have his daughter and her family living in NZ only speaks of his compassion. I know who I’d rather buy a beer.
April 22nd, 2008 at 5:14 pm
Alcest wrote: “All this business control of things internet…..sniff.Makes an old socialist like me pine for the days when govt would have run the operation and provided us with a service fit for we citizen kings.”
Brilliant satire … unless Alcest really thinks the NZ Post Office’s telephone days were great.
That was when the country was full of party lines, you could wait months to get a phone line installed, two or even three technicians turned up for each tiny little repair or installation job, governments turned off investment in the telecoms system in years when they were bribing the voters and needed to cut expenditure elsewhere, toll calls were exorbitantly expensive, we had a vast telecoms staff and weak trunk lines, and when we still had many manual exchanges nearly a century after the invention of step automatic exchanges.
April 22nd, 2008 at 5:21 pm
Nah….brilliant satire
.
April 22nd, 2008 at 5:24 pm
Yep!
April 22nd, 2008 at 5:25 pm
big bruv Add karma Subtract karma +0 Says: April 22nd, 2008 at 4:51 pm: “jafa If we pretend just for a moment that the employment contracts act is the reason we have such low wages what do you have to say about the fact that your lot have had nine bloody years to do something about it?”
I think that the various Labour-led governments identified the problems and came up with some good solutions early on in the piece. But they took too long to come to grips with the problems in telecoms, research and tertiary education sectors, infrastructure and elsewhere. This was *partly* the result of bureaucratic capture. And when they did get around to initiating something, the bureaucrats often sidetracked things (see DPF’s earlier post on scientific research).
If your lot get in this time, I hope they are a little less vulnerable to bureaucratic capture (if they are pursuing good policies like this fibre cable one).
In sum, there have been some good initiatives, which will show positive results, but I’d have liked to have seen a little more action and a little less talk over the period.
Edit: When Jack5 and his mates have stopped congratulating each other, perhaps they’d like to read up on changing telecoms technology in the 1980s. Clearly, they would learn soemthing.
April 22nd, 2008 at 5:31 pm
I am still looking forward to where National is going to cut spending.
April 22nd, 2008 at 5:35 pm
Reading these comments I now know the difference between righties and lefties.
The former use the internet to operate and expand there businesses while the latter use it to watch porn.
April 22nd, 2008 at 5:36 pm
Sonic said “Oh look, DPF gave me demerits for a fair point!”
Poor Sonic, or to use Helen Clark’s words – “Diddums”!!
April 22nd, 2008 at 5:39 pm
Inventory2,
psst, Sonic was being sarcastic.
April 22nd, 2008 at 5:40 pm
Wrong jafahelen sonic was being shambolic
Edit ; jafapete were you formerly called hinamanu,,,?
April 22nd, 2008 at 5:41 pm
I’m not convinced. It feels to me a lot like picking technology winners, instead of specifying an outcome. And I note that, like a few things we’ve discussed in recent days, it is policy entirely lifted from the recent Aus election.
5 years ago everyone would have told you that anything faster than 256Kbps needed fibre. Here we are today running 10Mbps over our old copper. What are we planning to do that needs more than that? NZ’s biggest problem is capacity out of the country, not capacity in the last mile to your desktop. Getting to the internet means getting to the US, and fibre to the home does nothing for that.
In short, wrong answer to the wrong problem, but at least it is visionary. Hopefully they’ll get the PPP model right so that they aren’t creating yet another bloody shambles of dead technology being mandated by the government.
April 22nd, 2008 at 5:42 pm
jafapete – am I supposed to care? But is IS good to see that you at least acknowledge that this is “good policy” – there’s hope for you yet!!
April 22nd, 2008 at 5:43 pm
D4J, You do like to use these words “retard” and “spastic”, and then criticise anybody who uses similar terms inappropriately. Can you see how some people might see this as inconsistent?
Inventory, gee thanks, glad I’m not a completely hopeless right-off.
April 22nd, 2008 at 5:44 pm
For those who can’t see the benefits of investing in high speed internet & fibre to the home, do you still think the world is flat?
Its not thought to increase productivity, its proven to. Yes youtube & trade me etc are nice features of todays internet but really they’re like the air conditioning in your car, secondary ad-ons that make it more widely used or enjoyable, but not the sole purpose of it.
Think of being able to run university courses extramurally for business leaders in their offices, or farmers on the farms, to give them new knowledge in blocks without the travel, or providing learning opportunities for communities without their young moving away from home, perhaps never to return.
Basically it will mean that communities can flourish again & provide learning & jobs in them again rather than telling them if they want to do anything with their life they have to move to a city.
Or is large scale urbanisation what Socialists want? So they can then blame all the ills on those nasty Capitalist right wingers, and maintain their grip on power.
And as others have said our movie industry can upload scenes to the US for final approval or to Asia direct for manufacturing of the discs. Our scientists can become involved in world leading research without having to wait up half the night for files to upload or download.
All of the benefits of faster broadband are going to become increasingly important with globalisation & world connectedness.
April 22nd, 2008 at 5:46 pm
I seem to remember a commentator some (few) years ago suggesting that having fibre-optic data cabling to each house was an overkill akin to having a 6-lane driveway to each house; i.e. that while fibre in every street was definitely worth it, there was no way anyone’s home computer would need the capacity of a fibre link from the street into the home.
So if that is (presumably) not the case any more then the technology and amounts of data being used must have moved on since then?
(As Radvad so astutely suggests, as I’m a leftie my porn downloads have obviously increased off the scale in the last 3 or 4 years, and that’s the reason all your business internets are slow…)
April 22nd, 2008 at 5:51 pm
“As a National Party supporter, I’m also very pleased. I think it positions John Key and National as having an economic development plan which is focused on infrastructure investment. At a time when the Government has no real answers to the economic challenges facing NZ (except to say we can’t control petrol prices of food prices or house prices), and is mired in the repercussions from some silly stunts, National has seized the policy initiative.”
Let’s not get carried away; some would say that an announcement of actual policy from the Nats was well overdue, and one Swallow does not a summer make…
April 22nd, 2008 at 5:52 pm
PaulL, seems you’re too focused on outcomes. How about asking this of an entrepeneur like Rod Drury or Sam Morgan: What could you create in NZ if broadband had no speed constraints?
How about a huge rendering farm aka Weta Digital on steroids? What if Disney outsourced its rendering to us?
Don’t ask what we need it for, ask what could we do without the limitation! For a geographically isolated group of islands like ourselves, we should be looking for the fastest internet possible. You are very right however about our external bandwidth though. I think DPF blogged about another cable being laid to Australia so that is coming too.
April 22nd, 2008 at 5:55 pm
rolla_fxgt – okay, I can see the benefits to business, definitely. It could also, over time, slow down or reverse the rate of urbanisation as more people are able to work from home. Yeah, you could get four billion out of that somehow…
[something someone said on Kiwiblog made me change my mind. Whoda thunk?!]
That said, the first question I always ask with these things is “Is the market already as free as it could be in this area?” Then the second is “Will the taxpayer get a fiscally measurable ROI out of this?”. If the answer to the first is “no”, then that is where priority lies.
April 22nd, 2008 at 5:57 pm
Sonic,
Using the victory of Labor over the Coalition in Oz is really quite silly for someone trying to suggest a Labour victory here. The electorate in Oz was hungry for a change. Although the Coalition had done reasonably well on the economic front, they had lost touch with the voters and there were increasing signs of arrogance, particularly on the part of the Liberals. That is where the similarity lies.
April 22nd, 2008 at 6:06 pm
We need unconstrained high-speed internet.
April 22nd, 2008 at 6:07 pm
I don’t know if I agree that this is the right question. Sometimes a unilateral decision with the long term benefit of all in mind has to be made, this is when the government should step in, especially when it comes to infrastructure. This is where I diverge from where the free market is a cure for all ills.
April 22nd, 2008 at 6:17 pm
I guess this is Nationals “knowlegde wave”, makes more sense then the waisted socialist effort. As for who pays for it, well given the amount of our money the suckholes piss down the drain 1.5 billion will not be missed. Well done National, I would rather see my taxes spent on something tangible then some more pc crap emanating from the 9th floor.
April 22nd, 2008 at 6:38 pm
Is it just me or does Cunliffe have the ability to look like a bigger smug prick than Cullen.
April 22nd, 2008 at 6:43 pm
How to differentiate between NZ ‘s major parties?
Both are socialist and statist.
The difference is in the rhetoric and at the margins.
Like banana 1 and banana 2.
The longer I look the more the beast is a combined political establishment, striving for some marketing separation for your benefit and their longevity.
The religious equivalent are Methodists and Presbyterians as the only game in town and pretending their “deep philosophical differences” are radical alternatives.
April 22nd, 2008 at 6:45 pm
Well i’m quite pleased with the plan, its long overdue and it should be interesting to see how Labour respond.
I only hope that they open it up to competition and not just give Telecom a new tax payer funded monopoly
April 22nd, 2008 at 6:49 pm
I’m a bit over this whole fibre debate. What good is it really going to do if all it means is that I can use up my entire cap in 30 seconds and then be scaled back to 64k?!
Speed isn’t really the issue, it’s the cost of data that is killing people!
April 22nd, 2008 at 6:55 pm
Sometimes a unilateral decision with the long term benefit of all in mind has to be made, this is when the government should step in
LOLOLOLOLOLOLOLOLOLOLOL
I bet that’s what Pol Pot said when he ordered every teacher in Cambodia shot.
I think it is absolutely the right question. My point was, labrator, that usually when there is a lack of infrastructure it’s because government is getting in the way of the private sector developing it. If you can get the private sector to build the infrastructure for you, surely that is better than taxing Joe Bloggs on Struggle Street 33c/$ to do it?
Otherwise, the threshold is high. It had better be fantastically necessary. And, pure and simple, it must have a positive effect on the country’s bank balance all around. In this case, you need at least $4B growth from it to break even. If you’re not getting that in this case, or in any case, there’s no “long term benefit of all” at all.
April 22nd, 2008 at 7:08 pm
I congratulate John Key on having something worthwhile to say.
best of all it will allow small town NZ to compete with the major centres , lets hope that 75% is interpreted widely. having driven through some small places just off the beaten track over Xmas ( they just happened to be on the wrong side of the Waikato River) and noticed the tell tale signs of a fibre optic trench along the roadside which would have bypassed all the houses, villages it went past.
But what is that gurgling sound I hear , is it the sound of Maurice Williamson trying to speak through the duct tape.
I even read the speech and couldnt find any wriggle room such as it really just being a private ticket collector on state assets , these being the nuts of the promise.
…next National Government will contribute an investment of up to $1.5 billion in Crown capital over six years to accelerate the roll-out of a fibre-to-the-home network for New Zealand.
Again congratulations
April 22nd, 2008 at 7:33 pm
I think this is on the right track. Its time to make NZ an attractive place to do business, not a place to flee from. Cheap plentiful broadband, low taxes, good infrastructure, good labour market policies, and energy prices lower than Australia are just the starting point if we want to be competitive.
Dicking around with business regulation, driving up the cost of energy, infrastructure, and inflation through loose fiscal policy just increases the risk and cost of trying to run a business here. When even F+P has to leave home, then you know you are in deep shit – leading indicators people. How many fled to Aussie this month.
Be afraid, Labour is leaving a scorched earth of beneficiaries and bludgers, and will undoubtedly empty the coffers to poison a National Government – they did it to Bolger (think BNZ cover up)
April 22nd, 2008 at 7:45 pm
More fibre? My doctor will be pleased.
April 22nd, 2008 at 7:56 pm
gww3 said “I congratulate John Key on having something worthwhile to say.
best of all it will allow small town NZ to compete with the major centres”
Goodness me! I agree with ghost!!! As I said earlier on in this thread, some of us have CHOSEN to live, work and do business outside the main centres. For us in particular, this is very good news.
April 22nd, 2008 at 8:07 pm
Yeah I hope this will coincide with my move to the Mainland, but fear I may have a bit of a wait.
April 22nd, 2008 at 8:16 pm
Don’t know where to start with you BlairM. Comparing Pol Pot and genocide to rolling out fibre for the whole country is ludicrous. I guess I can see where all the lefties get so annoyed at the righties with comments like that.
I’ll quote DPF in rebuttal
If you’re talking about the utopian free market which will cure all ills, I’m afraid it all ends up being alot like communism, one giant business making everyones decisions for them. Also, I think you’ll find if a fibre roll out company might service the big countries first, free market style, bigger contracts, less admin, bigger percentage profit. So little old NZ would get fibre last and all the benefits of it last, hence there is a roll for the government here.
If you can show me where the regulations are stopping Telecom/Orcon/Vodafone/anyone-else from laying out fibre at the moment I’d be very interested. The government (if National gets in) is right to make a unilateral decision to roll fibre out, just as previous governments have made unilateral decisions to roll out the roading networks, protect the country, protect our human rights etc etc.
So, I still think you’ve got the question wrong and I think a very good case has been made for how this will really benefit the country long term. We are not going to be a manufacturing economy but we could be the engineers of the world from the most beautiful country in the world if we were connected to the world as quickly as possible.
April 22nd, 2008 at 8:18 pm
GWW has just gone up big time in my books. Sonic crawled into the sewer with suggesting the policy was a corrupt bribe, but very good to see GWW able to call a good policy a good policy, even though from a party he doesn’t support.
April 22nd, 2008 at 8:34 pm
GPT 1 “I am still looking forward to where National is going to cut spending”.
As well you might, your implication being how does Cheech out cut Chong.
Well, not that difficult if the parties aren’t in philosophical lockstep.
In most western democracies owners of vast unrealised assets can’t receive public money as dole or other payments from taxpayers, so try changing/allocating Maori land title to the individual Maori masses rather than the elite controllers of group Maori assets.
The Aust. system of individual title to portions is allowing Aboriginals to (shock, horror) get bank loans to build houses because the bank has a mortgage on something it can sell.
The left hate it because it “de-mendicantises” Aboriginals.
Collective land ownership prevents individual advancement, just as the left want.
April 22nd, 2008 at 8:43 pm
“Sonic crawled into the sewer with suggesting the policy was a corrupt bribe”
Suggesting National are in hock to their big business funders=Sewer politics
Suggesting Labour are corrupt=Daily Kiwiblog post.
Really David, your double standards are laughably obvious today.
April 22nd, 2008 at 8:44 pm
I’m stuck here. Everybody seems to think that building infrastructure is good. I agree there is all sorts of infrastructure that the private sector won’t build for us, and that we need visionary thinking in order to get. It doesn’t follow that every infrastructure investment somebody wants to make automatically is a good idea. It has to have a payback, otherwise you turn into Japan with bridges to nowhere etc etc.
So, in order to agree that this is a great idea, I’d need to understand:
1. What is the problem it will solve for us
2. What about our existing infrastructure cannot solve that problem
3. Why is it that the private sector isn’t investing
4. What is it about government investing where the private sector won’t that makes sense.
I don’t hear a lot of logic about the problems it will solve – more I hear a solution looking for problems (it will allow video conferencing, it will allow working from home, it will allow us to connect to the world faster). For arguments sake, imagine I agree that fast internet connectivity to the world at cost effective rates would actually be a benefit that the public should fund instead of the individual needing to purchase at market rates.
So that leads me to point 2. If we are serving 75% of the population, surely that is the same 75% who can get ADSL today? What speeds can we get with ADSL? Well, in Australia we get this interesting content: http://whirlpool.net.au/article.cfm/1633 (take a look at the report they provide a link to). Basically iiNet’s claim is that most of their customers already get 6Mbps on ADSL2+. So, if we assume that the 75% getting fibre are the same 75% who already get ADSL (likely), what is the point? Seems to me that most problems could already be solved with ADSL.
Next, why aren’t private sector investing? I’m presuming here that the capital outlay is too high for the projected demand. You might roll it out and then discover that most people don’t want $100 broadband when their existing $50 broadband was fast enough for what they wanted. Arguably that is a network effect – if the govt subsidised the creation of the network then you could get it for $50, and everybody would get a faster one rather than a slower one. I can maybe buy that.
So, with the right heroic assumptions it sort of looks like a good idea. But is it a better idea than promising a 4 lane highway from Auckland to Wellington, to be completed over 20 years? I reckon most kiwis would jump on that. Is it a better idea than a tunnel under Auckland Harbour, or completing the Auckland motorway system? Those are things that impact huge numbers of people every day. How many people are really complaining that they cannot start some snazzy business because their internet isn’t fast enough?
April 22nd, 2008 at 8:45 pm
But I think it is an investment very much worth taking
Right. Can I opt out? Or is this a pseudo-investment where John Key just takes my money and invests it? He has some track record on investments, but I believe never on such a flimsy basis.
DPF, give me some hard numbers that will be achieved by 2014, and I’ll bet you they won’t be achieved.
April 22nd, 2008 at 8:52 pm
I think this is smart politics from National, but I have to say I’m very sceptical of the true need for FTTH. I’ve seen Telecom’s detailed numbers for FTTH (admittedly 12 months ago), and I can see their view that the economics of FTTH don’t stack up.
Basically, Telecom’s current cabinetisation (FTTC) will allow speeds of up to 25Mbit/s using today’s technology, at a capital cost of about $300 per connection. FTTH can give you speeds in the 100Mbit/s to 1Gbit/s range, but at a capital cost of about $1,600 per connection. (Note: Fibre backbone connections using DWDM and so on can reach 180Gbit/s or so per pair, but the terminal equipment required is way uneconomic for any domestic user).
The question is … how many everyday users can’t get everything they need in a 25Mbit/s copper-based connection? DPF … that’s way fast enough for video conferencing and for any well-configured client-server database app. In fact, 25Mbit/s is fast enough for an HD video stream, plus a video-call, plus a “current” internet broadband connection, plus several VoIP connections.
At $300 per connection the economics are do-able. Customers will pay $50 or so per month for their internet connection, and that’s enough to recoup your FTTC xDSL capex in a reasonable timeframe. Looking at it another way, if Telecom’s pre-tax cost of capital is about 15% then each year they need to make $45 of pre-tax profit off each FTTC xDSL customer to justify the investment. And with $50 a month of revenues that sort of profit is achievable.
But that same 15% pre-tax cost of capital means each FTTH customer has to generate $240 of pre-tax profits each year to justify the investment and that’s bloody hard – just look at the rate of ADSL take-up as broadband prices fell to see how price sensitive this stuff is.
So FTTH just isn’t currently a great investment. Not for Telecom, TelstraClear or others, and not for the Government. If it was an economically rational thing to do then the private sector companies would have done it by now. And for the Government to flush $1.5 billion of taxpayers money (ie our money) into this doesn’t make it any better an investment.
April 22nd, 2008 at 9:01 pm
virtualmark: agree. In Canberra I was getting (over a copper cable, but FTTC) my cable tv (iptv, high def) plus a 10Mbps internet plus phone. I don’t see what people want to do that cannot be serviced off that connection. The hard drive in my computer doesn’t do a lot faster than that, and I don’t know what I have that I want to come off the internet faster than it comes off my harddrive. And whatever it is is sure going to cost me a hell of a lot for my upstream connection to the US – at 10Mbps I’m burning through 4.5 GB per hour, 36GB per business day, 180GB per week, 720GB per month. Anybody have thoughts on what that will cost?
Upstream into the US is our limitation and where the money is spent. If the govt is serious about subsidy that corrects for our relative isolation, that is the bit of the cost that is different for us than someone in the US. And it is also a genuinely shared asset – a cable under the sea that everybody shares. V’s a wire that comes to my personal gateway and that I probably should pay for myself.
I know why it is good politics, and I agree that it is a better spend of my money than some of the crap that Labour have come up with. But I’d rather they just gave my money back.
April 22nd, 2008 at 9:04 pm
PaulL … I agree that our international connections are the main bottleneck. You’ll see that Kordia is looking to partner with PIPE Networks to lay a trans-Tasman submarine cable in competition with Telecom’s Southern Cross cable. I suspect that Kordia has had enthusiastic Ministerial support for this plan.
April 22nd, 2008 at 9:05 pm
GWW3 … just as a rough guide … to cover 75% of New Zealand’s population would mean the five major centres, plus all the smaller regional cities & towns down to those with about 2,500 households.
Note though, that’s every single household in the five major centres plus smaller regional cities & towns.
April 22nd, 2008 at 9:10 pm
PaulL … off-topic .. what were you doing in Canberra? I used to work with a Paul L who ended up moving to Canberra.
April 22nd, 2008 at 9:11 pm
virtualmark – one barrier is the upstream. The A bit of the ADSL is a bit of a pain with any sort of peer to peer software – which includes video conferencing. You need about 4Mbps up to do that properly. TV, general internet, other media are all OK so long as the downstream is fast enough.
But even there, I believe 4Mbps upstream is well achievable over copper using today’s technology. And I understand there are technologies in the wings that will have copper going faster still: http://en.wikipedia.org/wiki/VDSL
Note VDSL2 running 100Mbps each direction – in Canberra I had VDSL1 with a cabinet within 300m of the house, so with newer technology I could have had 100Mbps each direction. That is the same speed as the ethernet cable in most offices, and those are generally shared between 20-100 computers. What do I really need for one or two computers at home?
April 22nd, 2008 at 9:12 pm
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April 22nd, 2008 at 9:14 pm
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April 22nd, 2008 at 9:18 pm
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April 22nd, 2008 at 9:27 pm
Looking at tomorrow with a lens shaped entirely by today’s needs is a great way to move forward slowly and incrementally. Why not take a larger view, confident that the nature of files and applications will change to take advantage of the landscape? Why insist on hobbling potential by looking at use? There’s a great business case for moving reluctantly forward but it is preservationist, not visionary.
April 22nd, 2008 at 9:35 pm
Francis … you’ll note I said “FTTH just isn’t currently a great investment”. Not investing in it now doesn’t mean not investing in it in 5, 10 or 15 years time.
What I would say is that we should be running FTTSchool, FTTHospital etc. And we should be insisting that every new subdivision gets fibre instead of copper. And that whenever we dig up roads that we have to lay ducting for an eventual fibre deployment.
But the idea of digging up a whole pile of residential streets to replace the existing copper with fibre to the home is a duff investment. Today. And in the foreseeable future.
Personally, I’d rather that John Key put the $1.5 billion towards improving the pay & conditions of doctors and nurses. I think that’d have a greater overall impact on the country.
April 22nd, 2008 at 9:46 pm
virtualmark: nice.
DPF: You can video conference now, it is more the lack of decent standards based equipment available at a reasonable price (20+ years after we started…what’s that about?). Your queries over 2G of data should also be fine since you could/should be running queries on the DB server anyway — then only the results need to be sent to you.
I’m really keen to see your response to virtualmark. Between yourself and Rod I can’t quite see why you want the govt anywhere near this business. It seems quite out of character. The only explanation I can find seems rather unkind; in the current socialist lolly scramble environment you’ve finally found something you want them to spend money on.
The only rational argument I’ve recently seen for using all this bandwith on a non-special case basis is for IPTV. This is still nascent and we’ve not really got a good handle on how we’re going to use it. I’d also argue that uni-casting is the future for all but the market of real-time events (sports etc). FTTH will help this if we take HDTV example and 2-3 simultaneous streams. That’s about 8GB an hour per stream. I’m struggling to see anyone paying for this, when end-to-end bandwidth makes this cheap enough to allow a profit from a monthly subscription of ~$50
The trite comparisions to TradeMe and Weta deserve some exploding;
* TradeMe works pretty much the same over broadband. Making it faster…well maybe for example we’ll get 3D models of the trinkets but the major barrier isn’t bandwidith it is capability to generate those 3D models.
*Weta got their bandwidth. It cost money, but it was economic. If you wanted to run Weta from Durville Island then you’d have a problem, but then no sane business person would do this. If a business wants bandwidth today they can get it and Weta proves the point.
My constant counter argument to FTTH is that YouTube works now. Increasing the resolution is more a problem with YouTube servers and connectivity than the end user bandwidth.
Still I agree with the NZI that FTTH is a better story for NZ than rolling out new copper. From what I’ve seen we’re not rolling out new copper into new housing subdivisions, it is fibre. So to me the market is working well, albeit slowly and imperfectly.
PS DPF did you get any bites about wordpress plugins? I’m interested.
April 22nd, 2008 at 9:49 pm
As a radical thought … and I’m very interested to hear the view of the resident lefties on this one … what about if National said that they would sell a few SOEs outright and float 20% of the remaining SOEs on to the NZX and then use the proceeds to buy Chorus off of Telecom and spend $1.5 billion on a large-scale fibre deployment.
Basically sell down a few existing Crown assets in order to buy a new Crown asset.
Heck, if you sold Genesis Energy & Solid Energy and then floated 20% of Meridian, MRP and NZ Post you’d be able to buy Telecom let along Chorus.
Personally I think that makes more sense than creating a $1.5 billion slush fund for private sector companies to suck at the tit of.
April 22nd, 2008 at 10:20 pm
whether something is a “great investment” or not is a question that can be measured in many ways. commercially, there’s no doubt that the projected 30-40 year roll out of fibre to the home is a better corporate investment than a six year time frame for the same end. this idea, however, doesn’t depend on immediate commercial returns. which is how we got roads. but if you see no commercial advantage for the economy by accelerating the time frame of what seems a necessary development, and you do not seem to, then there’s really nothing to be said.
April 22nd, 2008 at 10:33 pm
francis: didn’t we get roads over 150 years? and were they not built only once proven necessary?
April 22nd, 2008 at 10:45 pm
virtualmark / PaulL: discovered you’re old buddies eh? Ain’t the interweb thingie great
April 22nd, 2008 at 10:48 pm
Francis, can you explain what is necessary about this development? What is it that we need to do that we cannot do over copper? Hell, pretty much every company in the world still uses copper internally, why do I need fibre to my door? It drives up the cost enormously. I’d be much more comfortable with a goal of broadband to 75% of homes, and even set a speed – say 10Mbps/10Mbps.
What you are saying is that the technology is inevitable so we may as well get on and roll it out, irrespective of cost or demand. We’re still driving on roads today, are we sure we’ll still be using fibre in even 10 years time? Are we sure that we couldn’t get the same result with copper? Of course, this would be an easier discussion if someone could tell us what the result is that we’re trying to get.
April 22nd, 2008 at 10:49 pm
getstaffed: yep. Tis a wonderful thing.
April 22nd, 2008 at 11:21 pm
Awesome policy, just what NZ needs. Finally can watch and stream content, can offer offsite backups, video conferencing, game servers, video servers, voice servers etc. NZ might become modern again.
April 23rd, 2008 at 12:16 am
David, can the biotechnology sector expect a massive handout from National too, since you could easily argue that sector will be the basis for agriculture and medicine in the 21st century. How about alternative energy? How about pharmaceuticals?
I’m not surprised but disappointed that you’re cheering on the use of other people’s money to do a Think Big project for the sector you’re involved in.
Funnily enough most the railways built by (provincial) government in the late 19th century were loss making and closed within a generation. The roads were built locally, there was no national programme of road building 150 years ago at all.
Funny too how nationwide cellular phone networks were built without state involvement, but suddenly it is needed for this.
Of course Telstra Clear rolled out Hybrid Fibre Coax in Wellington and Christchurch (and Kapiti) before “local loop unbundling” meant it was cheaper to use someone else’s network – perhaps Telstra Clear would have continued had it not been for government intervention, and the RMA?
Nevermind, Bill Birch, I mean John Key to the rescue. Central planning always worked, look at how easy it is to use the most demanded roads and get capacity added because of it. Um…
April 23rd, 2008 at 12:27 am
PaulL makes some good points. There’s no limit to the arguments one can make in favour of infrastructure improvement. Why not, for example, buy a fleet of Lear jets and offer free flights to Australia for all citizens? You could make all the same arguments – the private sector only provide 747s and won’t upgrade, it’s currently too slow and expensive, there’d be huge savings for businesses, it would encourage more trade and growth… all the same stuff. So why not?
But there’s no real specific cost/benefit analysis going on here by most people commenting. Essentially what we have from someone like labrator is an argument like “Sometimes a unilateral decision with the long term benefit of all in mind has to be made, this is when the government should step in”. And to my mind it’s perfectly legitimate for me to say that you can justify almost anything any government has ever done by this means. That’s why I retorted by saying it sounds like something Pol Pot would have said. Because it does! Now of course robbing taxpayers to build a fibre network because “it’s good for us” is not in the same league as an order to kill Cambodian teachers or Polish Jews, but both acts were done with what were believed to be the best of intentions for “the greater good”. I am comparing the arguments, not the deeds.
As for the rest of labrator’s remarks:
“I’ll quote DPF in rebuttal: One has to invest in the infrastructure before you get a return on it, from the services that can be delivered over it. This is why there is a legitimate role for the Government – there is a timing mismatch if you do not have the state invest capital in infrastructure development.”
Hmmm how do I write this in a way that does not drip with sarcasm? Nope, sorry, can’t. I’ll just have to stick with my original response which was “Gosh, you’re right, the private sector only invests in something before they got a return on it. How novel!”
“If you’re talking about the utopian free market which will cure all ills,
There’s nothing utopian about the free market. But it is free.
“I’m afraid it all ends up being alot like communism, one giant business making everyones decisions for them.”
What utter nonsense. The opposite occurs – the largest companies go public, sell shares, create an ownership society and their concern for customers increases as a consequence. It is the consumers and shareholders who make the decisions over the company, not the other way around. No company has ever forced me to consume their product, but governments do it every day.
Also, I think you’ll find if a fibre roll out company might service the big countries first, free market style, bigger contracts, less admin, bigger percentage profit. So little old NZ would get fibre last and all the benefits of it last, hence there is a roll for the government here.
What you’re really saying is that there is no market for it. I’m not one to speculate on that. But frankly, why should the citizens of Waikikamukau get fibre cabling if it’s not going to make anybody money? If it won’t make TelstraClear money to do it, what in God’s name is the Government picking up the tab for?!
If you can show me where the regulations are stopping Telecom/Orcon/Vodafone/anyone-else from laying out fibre at the moment I’d be very interested.
Actually, that was the question I was asking. Are there regulations or impediments we can get rid of before we rob the working poor of this country to do it? I wasn’t necessarily saying there were. But it’s important to ask.
The government (if National gets in) is right to make a unilateral decision to roll fibre out, just as previous governments have made unilateral decisions to roll out the roading networks, protect the country, protect our human rights etc etc.
Foolish past decisions never justify foolish present ones.
So, I still think you’ve got the question wrong
If that is so, then what you are saying is that it is better for John Key to steal money from me to fund his cables than it is to find a way for Telecom or TelstraClear shareholders to do it. It is better for him to give me no choice or say than it is to hit up people who have voluntarily coughed up for a stake in a public company. Why is it wrong to ask if the private sector can fund something first? You haven’t made a case for the contrary opinion, you’ve just said how nice it would be to have fibre cables all over the place. Well of course it would be nice. Free Ferraris for everyone would be nice too. Can I have one of those?
Public investment in infrastructure must always be a last resort, must always have exponential benefits, and must always be tax positive. You can argue for and against it beyond those terms of course, but surely those criteria are not something anyone but the most foolish socialist could disagree with?
April 23rd, 2008 at 12:57 am
Funny how the person who claimed a fibre optic company would leave New Zealand out last fails to note that New Zealand’s FIRST high speed broadband via hybrid fibre coax was on the Kapiti Coast – private sector again, amazing what you can do when you just say – do what you want. That was when National had a telecommunications policy which was to set it free and let companies do as they wish, as long as Telecom guaranteed reasonable interconnection as was agreed at privatisation.
Only a few years ago the telco/internet sector was touting that the “last mile” and the twisted copper network were the backbone infrastructure – now apparently it’s obsolete and so the government “unbundled” the local loop really for a limited period of gain. Meanwhile investment in other networks ground to a halt while the local loop became cheap and easy for companies to use. Telecom even tried fibre to the home and then a hybrid fibre coax network to 70,000 homes in Wellington and Auckland (including mine at the time) but it was premature so cut the investment and focused on ADSL and other investments.
The key problem is that National is promising to gamble other people’s money on a technological solution to an as yet undefined problem. How it can possibly know best when it isn’t risking its own money or shareholders (who can bail out or fire incompetent directors) money is beyond me?
April 23rd, 2008 at 7:52 am
Just saw these comments from DPF: You may not use the Internet for anything useful but I can’t wait until I can stop flying to Auckland every few weeks because home video conferencing will be available. I also can’t wait until I can access and run queries on some of my 2 GB databases at work from home.
Video conferencing: already doing that right now.
Run queries: ever heard of remote desktop or vncviewer? And why does running queries require fibre? Unless you are returning 2GB of data, you can run queries on terabytes just fines. It’s only if you need to download all that data, but that’s not running a query. In case you need to process that data on a client, just put a client more locally, and use any of the remote desktop technologies that are out there.
BTW, video conferencing and downloading data are surely representative examples of how productivity will bloom in this country. Not of course.
If there really is a ROI, investors would be lining up. They are not, there is no ROI, and this is just another ploy by National to spend my money.
Look at how well the government is doing with spending my money on education and health. Both are disaster areas.
April 23rd, 2008 at 8:11 am
Simply an election bribe. Pathetic.
April 23rd, 2008 at 8:49 am
I think this is complete madness.
I’ve been meaning to find time to do a proper response to the NZ Institutes proposal.
This uptake of similarly silly thinking might spur me along a little
April 23rd, 2008 at 9:28 am
The rate of telecommuting uptake is directly correlated with broadband speed.
And women have driven the move to telecommuting in the US because of their need to mix career and childraising.
Technology can address the need for a flexible workplace but conservative labour governments would much rather regulate than let technology solve the problem.
SImilarly in US cities telecommuters now outnumber users of public transport (except for NY city which is always an outrider).
Telecommuters outnumber rail users by numbers like 20 to 1.
But we are about to waste billions on rail while we argue about broadband investment.
April 23rd, 2008 at 10:14 am
Owen – now that is a good argument. I come back to thinking this is wasteful, but that if you’re going to waste money you should at least waste it on some sort of asset. I would much rather this than more public transport.
April 23rd, 2008 at 10:17 am
Great debate, glad there is no consensus on this so far as it’s all very interesting.
Here’s my take on the way haven’t private companies got in on this. Yeah, there’s no return on investment, but that’s because they don’t get tax revenue on all the new business the country gets, they just get their broadband subscription price for each connection. However the government will get tax revenue on every company that shifts to NZ because they can connect to LA or NY or London or Tokyo or Singapore like they’re in the same country. I’ve read many articles about business people bemoaning that they can’t multi-person video conferencing, they can’t do offsite backups without tapes or hard drives, etc etc I’ve also read about some of NZ’s amazing movie makers and commercial makers who would live in NZ if they could send their productions over to LA instantly instead of waiting for hours. By rolling our a major fibre network in NZ we could create a demand for it and the country would benefit on a whole.
Ireland cut tax rates to attract big business and it’s worked for them. There was no ROI on cutting taxes but there was projected growth on attracting big businesses. With hundreds of thousands of kiwis living overseas leading global lifestyles becoming interconnected with the world could well bring enough of them home to be creative here and pay taxes here. And no, they don’t all want to live in Kapiti.
My take is that it is visionary and sets out a real play for where NZ will fit on the global stage. In saying that, I do agree with PaulL and virtualmark in that fibre to the HOME is not essential, fibre to the exchange, to the workplace, to the hospital and to the university are however and that fibre should be rolled out to all new houses. I think though that if you needed fibre to an existing home, it should be available cheaply and subsidised (say if you had a business registered at that address).
April 23rd, 2008 at 1:20 pm
The National Socialist party strikes again.
Its time to “think big”!
Its strange when Labour’s policy appears to be less left wing, less about subsidies and “picking winners” than the nats.
Thankfully we still have ACT.
April 24th, 2008 at 2:33 pm
I’m not surprised John Key is passionate about $1.5b on fibre to all New Zealanders, and even less surprised that Maurice Williamson is even more pashed up about it.
Last time I saw Maurice at work was with Drivers’ Licences when he wanted to microchip heck knows what sort of information about people on them and Helen Clark’s Labour Party stopped him, and they reduced the cost down to $75.00. Not that that made it any better for me given that my previous Licence wasn’t due to expire until 2025!
Oh no Maurice said, they are not ID cards, but what supermarkets, banks, pubs are not using them now for just that reason. Liar Maurice, pants on fire. I even remember that shops were selling little holders to leave licences in your car, because that’s all they were meant to be for. Helping to keep road deaths down – how I have no idea. I also heard that Jenny Shipley planned to have 4 million of them printed, just in case the 1-2million drivers lost their cards, I guess. We also have over-18 ID cards.
And the ‘piece de resistance’, and I can see why Maurice’s tongue is hanging out here, is a fibre tentacle in every home.
But, of course he will have to hold back until every business has been plugged in, because that is National’s bread and butter and honey. What I want to know is the date when business has been bonked and the love in with the householder begins, 2013?