KEY POINTS:
Chorus, the newly separated part of Telecom that owns the network, is touting for business: "Chorus is interested in working with councils and local community groups to extend broadband infrastructure out into zone 4."
Zone 4 - it sounds like some kind of hell. According to Telecom's 2008 Operational Separation Undertakings, it's where some 16 per cent of our population reside - in the towns that pass in a blink when travelling State Highway 1. The hinterland, backblocks, remote, rural New Zealand.
But when it comes to broadband, entering our heartland is to cross over the edge of the abyss, the boundary of the digital divide. Zone 4 is where the have-nots live. Not to worry. Chorus is here to help. "We are open to ideas about how we might extend the network into the challenging zone 4 region and are willing to consider public/private partnerships." PPPs - the new magic bullet for our infrastructure woes - will sort it out.
In an email to councils, Chorus says it is actively seeking to work with communities to submit combined Broadband Investment Fund (BIF) applications. What it wants is to get its hands on some of the $75 million that the Government has set aside to extend the reach of broadband into "underserved regions" - the rural part of its $500 million fund designed to take us to a fast broadband future.
But here's the catch: "We would look to design, build, maintain and own [my emphasis] any networks that we were involved in," says Chorus, adding that the network would be "open access" to service providers at the "lit fibre layer", at a regulated price.
What's wrong with this picture? Not much seems to have changed. The separated Telecom still owns the network, is still calling the shots and still controls what kind of service providers can buy. Worse still, it wants a government handout to do it. It's a message that sounds very much like: "Give us the money and we'll extend the exchanges and put in our technology (ADSL); here's the price book, like it or lump it."
If this all sounds a bit deja vu - like Project Probe (Provincial broadband extension), only bigger - that's because it is.
Our Government's previous "commitment to investing in critical infrastructure", completed in 2004, divided the country into 15 regions, offering a total of $48.3 million to all comers to wire our schools for the information age. Telecom won 12 of the 15 contracts.
To be fair, I don't think that is quite what the BIF architects have imagined. But if councils and community groups are going to get into bed with Chorus, it doesn't look like there are many options.
Herein lies a fundamental failing, not just of BIF, but also our unbundled, wholesale regime - especially for rural areas. In such sparsely populated areas, it makes no sense to duplicate expensive fibre networks. Yet, with an intransigent monopoly following the law to the letter, that's the unintended consequence if councils want to extend broadband to the far reaches.
It should be very clear to everyone by now that our sorry state of broadband provision - not just in zone 4, but also in urban areas - is a clear case of market failure.
Unless Chorus significantly changes its tune, or councils and the Government find a way to make it play ball, it's a failure that looks destined to continue.
