Steve Lowe: Fibre goal no longer pipe dream

New Zealand's size and topography make it important to encourage a broadband model that supports urban and rural needs.

Despite the contested nature of the high-speed broadband debate, most people seem to agree that the best way forward is through a collaborative approach.

Given the scale and political nature of the project, a partnership between Government and key stakeholders will be important if we are to deliver the best outcome for all New Zealanders.

With the Communications and Information Technology Minister Steven Joyce confirming the Government's $1.5 billion plan to roll out a fibre-optic network to 75 per cent of New Zealand homes, interest in broadband has never been higher.

The Government's commitment to invest in New Zealand's broadband infrastructure clearly demonstrates the importance of our ICT infrastructure as an enabler of business and a driver of international competitiveness.

It was anticipated that the Government's broadband package would be (at least) equally matched by private investment, and the minister's announcement earlier in the week confirmed this approach.

The Government will set up a Crown-owned company, Crown Fibre Investment, which will work with private-sector partners in regional companies to provide fibre-optic infrastructure in 25 towns and cities.

The investment needed to build New Zealand's "fibre future" is considerable and the approach outlined by Government calls for significant investment.

It's for this reason that the debate around partnership models and deployment plans has been so widespread.

And we can't lose sight of the fact that cost is only one aspect of this complex equation. Large established markets, like Japan, rolled out fibre broadband without a clear application beyond providing a "big pipe".

Only now are service providers truly taking advantage of the bandwidth available. The time is right for New Zealand consumers and SMEs to dream about how they want to use enhanced broadband and pull through the required enablers and applications - even before the bigger pipe is rolled out.

Rather than adopting a "build it and they will come" approach, the Government, with industry, must evaluate the bandwidth requirements for New Zealand's digital future and respond in a way that makes both economic and technical sense. However, speed for speed's sake is not the answer to our broadband problems.

Too much of the broadband debate so far has focused on the "last mile" of infrastructure and centred on broadband access alone.

In contrast, service and application growth remains an area that has been overlooked. The Castalia Report suggested that consumer demand for high-definition IPTV wasn't a strong enough reason to roll out fibre to the home - and it was right. But the possibilities offered by a high-speed broadband network extend far beyond recreational consumer use.

Faster broadband will encourage developments in areas such as eHealth, opening the door to real time remote healthcare monitoring and diagnosis. Education will also benefit, through improved research and communications technologies and enhanced distance learning.

Both of these applications can and will be delivered to the home, with more bandwidth delivering a better experience. This is a practical example of the application needing broadband rather than vice versa.

The private sector has a vital role to play in offering applications that make use of high-speed broadband capabilities. Equally, the Government must also work to stimulate demand, by sponsoring research and innovation.

A fibre-future is one full of new opportunities and challenges. Crown Fibre Investment will encourage continued vital collaboration between the Government and key stakeholders.

There are a number of issues to work through and it remains to be seen what will happen to plans such as local-loop unbundling and cabinetisation. Engaging with the country's major telcos will help the Government form a clear picture of the existing broadband roadmap and enable it to develop an effective plan for the proposed $1.5 billion in spending.

New Zealand's size and topography make it important to encourage a model that supports urban and rural needs. Private investment should be encouraged in the broadband network where economically viable and subsidised where not.

If we can maintain focus on the goal - the construction of world class network infrastructure that is cohesive, secure, resilient and scalable - the path there becomes less relevant.

Perhaps the best way forward is a compromise between the approach suggested by the Government and that proposed by Castalia.

Rather than building a nationally funded fibre-to-the-premise network, a fibre-to-the-most-economic-point view would encourage smarter investment and improve viability.

Under such an approach, the Government could leverage the short-to-medium term broadband investments planned by the likes of Telecom, Vodafone and TelstraClear to deliver fibre-optic cable where the business case supports it.

Where that investment is uneconomic, such as in sparsely populated rural areas, the Government could consider alternative technology options to ensure complementary high-speed broadband infrastructure.

A public-private partnership approach will help deliver broadband to a broad section of the New Zealand population, while helping to manage the required public contribution to network construction.

High-speed broadband will play an important role in helping New Zealand to realise its potential. All players must work closely together for the good of the country and find a model that is both commercially viable and politically compelling.

* Steve Lowe is the chief executive of Alcatel-Lucent New Zealand.