Ultrafast broadband is supposed to benefit New Zealanders. Yes?
In his biggest 2008 pre-election pledge, John Key promised that for $1,5 billion, 75% of NZers would get ultrafast broadband in their workplaces, schools and homes. Steven Joyce was tasked with delivering it.
But is it going to happen? And will Kiwis be able to afford it?
- More than two years since the election there are no decisions made and no fibre in the ground.
- The govt was forced to admit last year it could not deliver broadband to homes, rather to streets. We don’t know how much it will cost consumers to connect, though industry analysts have estimated up to $2000 per household
- The discussions and negotiations on the $1.5 billion ( ultrafast broadband scheme have been conducted behind closed doors with the veil of commercial sensitivity used to prevent public scrutiny and discussion by the industry.
- Steven Joyce shifted the goalposts on the UFB tender mid year with little public discussion.
- The shortlisted bidders for the UFB excluded a major bidder (Vodafone/Axia) with little explanation.
- The role of Telecom has dogged the broadband debate from day one. The government has allowed a parallel situation to develop where Telecom is using its agreement to structurally separate as a negotiating tool (some would say a weapon).
- The government has said that the only way Telecom can participate in the UFB process is to structurally separate into legally separate companies.
- Late last week the government introduced the Telecommunications Amendment Bill to the House. It will enshrine in law a 10 year holiday from price regulation for whoever wins the urban broadband contract.
- The Commerce Commission will be prevented from playing a watchdog role on broadband fibre prices
- The government says it will introduce an amendment to the new Bill at the select committee to accommodate required changes to Telecom structurally separating (if it decides to do so)
- If Telecom decides to structurally separate, the government could give it a major tax break.
- The Commerce Commission has expressed concern that Telecom’s structural separation proposal will ultimately benefit investors rather than the end-users of its products
- A major bid in for rural broadband, covering 25% of NZ could result in a commercial monopoly by Vodafone and Telecom. Despite claiming it encourages competition, this could create a price fixing regime for rural NZ which would no doubt push into urban NZ.
- There are serious perceptions of conflict of interest on the board of Crown Fibre Holdings; the company established to roll out ultrafast broadband. The government and CFH are ignoring these claims and stonewalling concerns.
There are many other issues which I could list here.
All in all, does it sound to you as if the people of New Zealand and the affordability of broadband is the core consideration here? I don’t think so.
The average cost for the ordinary Kiwi of a fixed telephone line, broadband and mobile connection all amount to more than $150 month. That’s a lot. For many people, it’s much more. Not taking into account their Sky connection. NZers pay significantly more than the average consumer in the OECD.
Will ultrafast broadband be more expensive on top of these costs? If so, will people pay more? Should they? Can they afford more?
Is it important that they can afford it? Isn’t this why the government has committed so much public money towards this new network?
Isn’t this what the real debate should be about?