KEY POINTS:
A long time ago in a galaxy far, far away, someone thought it would be a great idea to privatise the nation's phone company."
This was Communications and Information Technology Minister David Cunliffe's introduction to "a brief history of telecommunications policy" at last month's Digital Summit 2.0 .
It's code for saying "we must have been insane". Cunliffe is talking about an event not that long ago (1990) in our own backyard - the Labour government, in a fit of stupidity, selling Telecom for $4.25 billion.
The problem today, as Cunliffe so succinctly lays out, is recovering from such a great idea is no easy task.
Take rural services. Half of our 231,000 rural telephone lines simply aren't capable of providing broadband. And I'd wager the other half aren't up to much either. That's bad and made worse when you consider the paltry $22 million a year Telecom has invested on its rural network over the past 13 years, covering both growth and replacement investment.
As Cunliffe points out, Telecom's annual depreciation of its ancient rural asset is $50 million to $70 million, which means an ongoing replacement programme is long overdue.
Adding insult to injury, Telecom actually receives around $25 million a year in subsidies from the rest of the telecommunications industry for providing this clapped-out service.
"It is fair to say," says Cunliffe, "Telecom's average net new investment on rural lines in the recent past has therefore effectively been negligible."
What to do? Cunliffe says he's revisiting the Telecommunications Service Obligation from which Telecom reaps its subsidy.
He is also looking to state-owned enterprise Kordia to provide an alternative rural infrastructure. Bravo - except he's yet to get the several billion needed to do it.
But at least Cunliffe is saying what needs to be done - something I don't think I've ever heard a politician articulate since we got into this mess.
He's spot on too when he talks about our high price for transporting data from New Zealand to the US - about $9 a month for each internet consumer.
And he goes straight to a solution - "a partial contestable subsidy for a further fibre cable to Australia for resilience and security purposes". Bravo again - now he's just got to come up with about $100 million to do it.
In the last two years Cunliffe has faced down Telecom and carried through with regulation to undo its rapacious monopoly power.
Interestingly, Telecom's response to regulation has been to invest - at a level we haven't seen since 1990.
But despite an extra $303 million above Telecom's business-as-usual investment over the next four years, to bring more fibre closer to homes and businesses, Cunliffe knows it's not enough. Once again Telecom is investing at a trickle because it can.
With no real infrastructure competition, Telecom is doing what it has always done - investing just enough to keep its monopoly intact.
Meanwhile the country slips further behind. Again Cunliffe cuts to the chase. Telecom is putting in roadside cabinets with ADSL2+ technology while overseas telecommunications networks are now developing for VDSL2 - technology that provides speeds of up to 50Mbps over copper loop lengths of 1km.
"Telecom's proposal to only cabinetise copper lines that are over 3.6km in length would appear to be very cautious," says Cunliffe.
What to do? Set some goals. Long term, Cunliffe says, the Government's vision is fibre to the home. Another first - after 17 years the Government finally acknowledges what has to be done.
But then he gets a little wishy washy - saying the economics of fibre to the home (billions) in the short to medium term are "simply too challenging". But full credit to Cunliffe for trying. Which is why he gets my nomination for IT/telco man of the year. Many will be watching the next budget to see if his fine words translate into action.
