Anthony Doesburg: Broadband means more than faster surfing

Telco analyst Paul Budde. Photo/ Kenny Rodger

Telecommunications analyst Paul Budde hit on a great irony of the global recession at a conference in Auckland last week. Economies might be shrinking, dole queues lengthening and the car industry on the brink of extinction, but never has so much public money been promised for infrastructure investment, including high-speed broadband.

"We've been talking about these things for the past decade or longer and if someone had told me, 'Paul, there will be an economic crisis and all your dreams will come true', I would have said that's impossible."

But it's not quite that simple, as ICT Minister Steven Joyce made plain at the Telecommunications & ICT Summit the day before Budde spoke. During an update on the Government's plans to sink $1.5 billion into a national fibre-optic broadband network, Joyce said deciding how to proceed was proving more complicated than he'd expected.

"We are certainly moving ahead and while I initially indicated mid-June for some announcements, given the volume and complexity of the issues I have decided to take a couple of months longer. My view is that it is better to take the time to get it right," Joyce said.

Rather than elicit a groan from Budde, the Sydney-based analyst thinks the minister is right to delay, reading it as a sign Joyce understands that more is at stake than mere internet access.

Budde's message - and it's one he says he is also taking to the Australian, American and Dutch governments - is that linking homes into national high-speed networks is at least as much about future delivery of health and education services as it is about surfing the web. And when seen in that context, the routinely raised argument that there is not a business case for broadband investment disappears.

"In my discussions with the minister I've indicated that you have to have this broader approach and the fact that he has asked for two extra months is a good indication that he wants to take these things on board."

Joyce may indeed share Budde's broad view. But it's Prime Minister John Key's backing that the analyst says will really count if New Zealand is to adopt a "trans-sectoral" approach to spending on a national network.

"You can only maximise the benefits of the investment that you make if you start looking at the trans-sectoral approach; in other words, if we invest $1.5 billion, then we have to start using that for healthcare, we have to start using that for education.

"That doesn't happen automatically because, let's say Steven Joyce thinks all this is a brilliant idea, and he goes to the Minister of Health, who says, 'Steve, that's my department, you go and play somewhere else'."

The health sector might be preoccupied by swine flu and doctor shortages, with its minister oblivious to the benefits of providing services electronically. But the benefits are huge, Budde says. "In Australia we know that if we implement e-health, over a period of 10 years we would save A$30 billion ($37.4 billion)."

It takes the direction of national leaders to encourage trans-sectoral thinking, and Budde claims success at getting Australia and the United States moving in that direction.

"There is high-level interest in thinking differently about the telecommunications market."

Australia's Minister for Broadband, Communications and the Digital Economy, Stephen Conroy - a mouthful of a title, but it says something about how advanced his Government's thinking is - has grasped the nettle with particular enthusiasm, Budde says.

"We are extremely lucky in Australia because our minister ... has clearly indicated, 'Paul, I truly believe in the trans-sectoral approach'."

Belief is one thing, action another. As Budde tells it, through the direct involvement of Prime Minister Kevin Rudd, Australia is pushing ahead with a A$100 million smart electricity grid project that will use an optical fibre network linking 25,000 new homes.

Smart grids have the potential to save 25 per cent or more of electricity use. Budde says Australia's Energy Minister, Martin Ferguson, was lukewarm about the project before Rudd got involved.

Similarly, a A$60 million e-health project is under way involving state and regional agencies. When national networks are seen as infrastructure to support such projects, the financial justification becomes clear, Budde says.

But telco support is also vital. Telstra, more a hindrance than a help in advancing the Government's broadband ambitions under former chief Sol Trujillo, has had a "total shift" in attitude since the appointment of new head David Thodey. And in New Zealand, Budde would be "very surprised" if Telecom wasn't interested in the trans-sectoral approach.

"The financial crisis is making this happen, so for heaven's sake, let's grab it," Budde says.

Across the Ditch

Australia's Government plans to build a A$43 billion broadband network over eight years, providing fibre to the premises for 90 per cent of homes, schools and workplaces. A special company will be set up to run the project, and the Government hopes to attract private investment in the scheme.

Anthony Doesburg is an Auckland technology journalist