Entry 953, on 2009-02-26 at 20:47:27 (Rating 3, News)
The new government in New Zealand has been pushing the idea of investing in building a faster broadband network by taking fibre to the home of most New Zealanders. They are considering spending about NZ$1.5 billion on the project and you would think that the major internet service providers would be quite excited by the idea, but apparently they aren't.
In a report created for the three biggest providers: Telecom, Vodafone and Telstra, serious doubt over the wisdom of this plan is expressed. The report agrees that a New Zealand Institute study which estimates $2 to $4 billion of benefits per year is correct, but questions the "social benefit". Just what this lack of social benefit really means wasn't explained in the news item I heard.
If you have read some of my past blog entries you will know that I am not a great fan of Telecom. In fact I think they are one of the most incompetent and corrupt companies in New Zealand. Vodafone are hardly better and, although I don't deal with Testra myself, I have heard a lot of bad stories about them and very few good ones. Also, these companies are supposed to be competing, why would they collude on the production of this report?
Its fairly clear to everyone that the telecom companies just don't want this technology to go ahead and most people would see through their weak reasoning in explaining why not. Its not because of their concern over social benefits, its the threat to their profits which they currently make through provision of poor and overpriced services that they are really concerned about.
The report claims that New Zealanders don't want high speed networking. It says that New Zealand has a high use of dial-up and that this shows fast internet would be wasted here. Do they really think anyone would use dial-up if the alternative was reasonably priced? Its because they keep the price of broadband artificially high that people are forced into using an antiquated system like dial-up. Or in some cases its the fact that broadband isn't even available in some more remote centers, again because of the telcos' greed.
There is a good chance that power companies could provide the cable more cheaply than the existing telecommunication companies and its this that really worries them, I'm sure. That would really kill off their cash cow. Maybe they wouldn't be able to provide such a huge profit to their foreign shareholders then. How sad would that be!
Local councils don't trust these companies either. They say that high speed internet access is a core infrastructure that the telcos are holding back, and they want public-private partnerships set up to make sure that things progress.
So this is really just another example of where the free market fails abysmally. Really it seems that if you want any progress to be made at all you have to bypass the private sector and use a model which takes the big picture into account instead of just how much money can be returned to the shareholders at the end of the current financial year.
The public relations people (also known as professional liars) for these big companies say that the report is just designed to introduce some informed debate into the subject. Who do they think they are kidding? Even the spin doctors can't make that lie stick. This report obviously has nothing to do with informed debate and everything to do with transparent propaganda which is designed to confuse what is actually a really simple issue rather than actually inform anyone.
So the best outcome would be the government sets up a state owned enterprise to manage the new cabling, they install it by using the access of existing power suppliers, and the big telcos we have now are made irrelevant, not just as ISPs but also as phone, cable TV, and other service providers. Not having to deal with these corrupt overseas multinationals would be the best thing we could ever do for the New Zealand telecom user.
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