Can I get one to subsidise book purchases? Or to subsidise my overseas travel? After all those are forms of entertainment I enjoy, why should those who get most of their entertainment through a computer get theirs subsidised?

Don’t tell me it’s about business, there isn’t a business at every residential address in the country (except farms, which wont of course get anything from this).

This isn’t an investment. The government spending money taken from force from others, and expecting a lower return than bank deposits, is out and out theft. The private sector isn’t investing because people are unwilling to pay the price needed for these “essential services”, Telecom knows any investment will be forcibly shared with its competitors at a price set by the state so it isn’t too keen, and the RMA makes stringing up overhead wires difficult in many districts.

Either people want it, and the private sector will supply the infrastructure needed (three mobile networks have been built in 20 years by the private sector from scratch and umpteen broadcasting networks without state aid), or there are barriers to private sector investment.

The idea that government can possibly make the best investment in this sector when it doesn’t face the discipline of shareholders and bankers willing to withdraw support when it stuffs up (instead just pillaging taxpayers like what happened with Think Big) is naive and populist.

On page 532 the Commission reports:

“Dense cities use less energy per person than the more dispersed model. For these reasons, the MUL is a key policy and the consequent control of land use will require significant enforcement efforts.”

Sorry, that is simply not true. The ground breaking report “Consuming Australia” put that theory to rest when it found that carbon footprints are not “space related”. A report published today, “Suburbs and Climate Change: a Homegrown Brawl” updates the debate.
The original source of this “conventional wisdom” compared cities like Bombay with Atlanta and failed to realise that Bombay people used less energy because they were poorer.

And on page 546 we learn:

“In most of the cities we visited, there was a realisation that building more roads is not the appropriate answer to the problems that cities face. Various commentators have likened building more roads as a cure for traffic congestion to loosening one’s belt as a cure for obesity.”

Auckland is desperately under-roaded. We have congestion because we have built only about 40% of the network which was meant to have been completed by 1985, and in particular we have not completed the Western By-Pass. Those various commentators are idiots. If extra roads are not the solution then presumably bombing the Newmarket viaduct would reduce congestion.

Under the chapter on waste management the report makes no reference to waste-to-energy as a means of converting waste into a resource. None. Not even in passing.

Liviing in the past and pink coloured glasses.

I shall wait and see what the Minister for Communications and Information Technology future announcements bring. I have the sinking feeling however that rural communities are going to be asked to ‘contribute’ to improvements while urban NZer’s will not for theirs.

If it takes Government funding then it should be as an investment in companies that the government turns a $ on.

And this will also allow competition into the NZ comms market place – something we havent seen happen due to various spurious reasons trotted out by telecom and Vodafone, mostly to do with C level bonuses.

As you are getting old, I have no doubt you will start supporting government funded healthcare!

With you complete lack of commitment to your claimed philosophy, I’m suprised you haven’t been elected to parliament – as a NZ First MP!

[DPF: Actually I support it, because there is significant evidence that a country gets increased economic growth far in excess of the cost of the broadband investment. This provides a return on capital for the Crown's investment through increased tax take]

Was the purpose of this broadband initiative for the PM to point at a completed project and feel proud of the results and New Zealand’s improved infrastructure? Helen Clark was famously embarrassed by New Zealand’s broadband infrastructure after witnessing first hand what South Korea had. It’s too bad she wasn’t embarrassed more often by New Zealand’s dismal economic record, she might have done something positive about it.

The real purpose of the project was to lift an election strategy straight out of the Kevin Rudd play book. Appear to be forward looking and doing something. No need to worry about taxpayer value for money.

I’m glad I’m not paying for it.

Maybe he can get it right when he engages his brain!

Someone needs to stop asking how fast do you want it and instead start with how much are you willing to pay.

Personally I’d like to see more attention going into just what services will be available over fibre that aren’t do-able over top-end DSL. Overseas that’s video … you roll-out fibre to the home so that you can bundle phone, data and TV over the same network infrastructure. But the TV horse has already bolted here.

Sure, there’ll be a few new services that become possible. But I really question whether they’ll be of sufficient commercial value to justify spending $1.5 billion when, for example, that amount could pretty much sort out Auckland’s current transport problems.

A much smaller proportion of people above are asking what IMO is the only relevant question: is this a wise spend of scarce resources.

When has anyone given us a business case on this policy? So what if it was an election promise. Since when have reef-fish been able to properly evaluate anything, let alone something this complex?

Point is, regrettably, this is a big-ticket item in little-ole NZ. There are plenty of other things, science-wise, that could arguably get much better bang for buck than this.

For example, imagine if, with some of this money, the LH company mentioned last weekend became the world’s leading exporter of hydrogen fuel-cell technology. Imagine if, with another part of this money, the low-temperature super-conductivity technology currently being developed at Vic could be commercialised for use in every single wind-farm around the world.

Look, who knows if that could happen or not. Point is, no-one actually appears to have thoroughly, rigorously and assiduously explored the question: Is this the best possible bang for our remarkably scarce bucks, at this particular moment in time? Well, is it? Why? I don’t recall any debate on it.

This reminds me of a Marsden-Point Think-Big project – except it’s not so wise. At least we KNEW back then we NEEDED vehicles. Do we know the same thing about really fast broadband?

I’ve seen a lot of deep detail of a trans-Tasman cable. The economics are really tough. And the key question on all potential investors minds is what is the likely competitive response from Southern Cross? They’ve already recovered their investment on that cable, with a good cost of capital. It would take 2-3 years to bring a new cable into operation once you pull the trigger, that’s 2-3 years for Southern Cross to sign up all the high-value customers on to long-term sweetheart deals. Basically, Southern Cross will be always be able to undercut the pricing of a new entrant but remain profitable. You’d have to expect them to do that, in order to deter that new entrant.

So anyone building a trans-Tasman cable is going to get mauled by Southern Cross. That’s deterring the private sector investors. I suspect it’ll need a dose of “non-commercial” money to get a trans-Tasman cable over the line, and there’s not a lot of that money around. But then, Kordia did pay $24 million for Orcon …

The only real limiting factor for DSL technologies is the uplink speed.

But, given this clarified policy position from the Government today … if you’re the Board of Telecom why would you sell down 60% of Chorus now? Telecom’s big competitive advantage is that it’s vertically integrated and already reaches to every dwelling in the country. That’s all due to owning Chorus.

There are definitely ways the Government could have structured this policy so that Telecom had incentives to sell Chorus. But this policy outlined today doesn’t do that.

The difficult part will be making that business case stack up.

Any fibre roll-out is going to incur significantly higher capital costs than Telecom’s competing FTTC/VDSL network – like more than 5x the capital costs. The operating costs are going to be at least as high – Telecom has economies of scale, and fibre users will (supposedly) incur much higher data charges. And there are meaningful co-ordination costs to be shouldered in wrangling LFC, CFIC, ISP etc together.

Industry experience is very clear that broadband take-up is hugely price driven … it’s practically impossible to get retail customers to pay more than $120 per month for phone & data, and the vast bulk of SME customers behave more like retail customers than like corporate customers (who already get fibre from Telecom and others).

Added to which, you’d have to factor in the likely competitive responses from Telecom. They will not go gentle into that dark night. They’ll drop prices, bundle products, put their best technology into competition with the fibre networks etc.

So any private sector investor is going to face huge challenges working out how to get enough customer take-up to make the business case work. This is not a commercial challenge that a lower cost of capital (ie cheap Government money) can resolve. Take a look at the Network Solutions report for Internet NZ … that’s a report done for the cheerleaders of this policy, and I can’t imagine any commercial Board investing if the business case looks like that report shows – and Network Solutions assumptions were more generous than this policy released today.

My prediction is that there will be a lot of talk from private sector investors, but few **sophisticated** private sector investors will actually enter into anything. A few smaller existing players, like Vector Networks and CityLink, will take a bit of Govt money to extend their networks into the wealthier parts of Auckland and Wellington. But I’ll be interested to see if anyone does a large-scale roll-out in Ashburton, Taupo, Blenheim, Oamaru etc.

Would it be 10 or 20 times quicker than currently for instance?

We know that everything ends up costing twicew as much as originally estimated and you have to question if this is the way to go. What if they chucked another $1B at the roading situation for instance.

Would that get Transmission gully or the auckland motorway system sorted or new harbour bridge for instance?