Battle lines drawn in fast-net debate

Fibre would allow high-quality live video. Photo / Kenny Rodger

The Government's $1.5 billion plan for a fibre-optic network connecting most homes and businesses to super-fast broadband has sparked debate over the merits of a spend-up to deliver high-speed internet to the suburbs.

Cynics say purveyors and consumers of digital pornography will benefit from a fibre-to-the-home network, but it will have little impact on improving the country's productivity.

Supporters of the project argue that view is short-sighted and ignores the untapped economic advantages of building a ubiquitous high-speed network. In a report commissioned by Telecom, Vodafone and TelstraClear, consultancy firm Castalia argued consumers were unwilling to pay for already-available fast internet connections and there was "considerable uncertainty" about when demand for such services would emerge.

"The Government's initiative to subsidise, or stimulate, the drive for fibre to the home is in itself a clear signal that such a roll-out will not occur on a purely commercial basis for some time to come," Castalia said.

But the Telecommunications Users Association said the report failed "to grasp the transformational outcome New Zealanders aspire to from early, ubiquitous access to ultra-high-speed broadband".

A European study released after the Castalia report may provide ammunition for local fibre-to-the-home (FTTH) supporters.

The study, by telecommunications industry body the FTTH Council and IT research firm Ovum, focused on the impact of fibre connections in small rural Swedish communities.

Ovum says it is the first study of its kind to show a correlation between a high percentage of homes and businesses with fibre connections and benefits and cost savings for education, health and public services.

The study demonstrated FTTH networks provided a platform for improving employment levels, attracting small businesses, encouraging remote workers and ultimately helping to raise the regional "knowledge economy", the FTTH council said.

Others argue those benefits can be delivered without the vast expense of running new fibre cables into homes.

Shaun Page, Australia and New Zealand vice-president of broadband equipment provider Juniper Networks, said the debate needed to be elevated from how people were connected to the network to the type of services fast connections could deliver.

"It's analogous to any other piece of public infrastructure you'd want to develop," Page said.

"Take the roads system as an example. We build roads for a purpose - the application being we can drive our cars on them and move from one point to another. That's what people really value. They don't value the aesthetics of bitumen."

Communications and Information Technology Minister Stephen Joyce last month reiterated building an ultra-fast national broadband network remained "one of the Government's top priorities" although he has yet to specify how the $1.5 billion pledged for the project will be spent.

Juniper Networks' New Zealand country manager, Ian Quinn, said small-to-medium businesses were key beneficiaries of fast, reliable broadband networks because they opened up access to affordable web-based software and services.

"Those type of software-as-a-service or cloud computing opportunities open up the benefits of IT for that scale of organisation that wouldn't otherwise have access to them," Quinn said.

"If we can marry that ability to access hosted applications with network-based services that assure the experience then that sector of the economy starts to get economic benefits which justify the investment people are looking to make."

Page said many of the web-based applications that would have the most significant impact on boosting productivity and enhancing the economy were yet to be developed. However, it was important that the "creative people" who could come up with solutions to maximise the potential of the technology had an incentive to do so. "Because if you don't create an environment that fosters innovation, the network might just as well not have been built."