Minister plays down broadband hopes

Faster, cheaper broadband may not arrive before 2008, Communications Minister David Cunliffe repeated today in a bid to counter the growing hopes of internet users.

Since the Government announced its plans to open Telecom's network to rivals three weeks ago there has been optimism in some quarters that improved broadband is a matter of months away.

But Mr Cunliffe today moved to hose down those expectations.

"It is very important that both the public and the industry are realistic," he said today in a speech to the Telecommunications Users Association of New Zealand (TUANZ).

He said the Government would introduce legislation this year, but it might not be fully passed until early next year.

The Commerce Commission would then need to research how it applied the final shape of the law, which would also take some time.

Although it might take some time to get things right, Mr Cunliffe said the potential gains from moving to better services borne from greater competition were great.

It was estimated that significant improvements would increase New Zealand's GDP over time by 0.5 per cent to 2.5 per cent.

But Mr Cunliffe said it was encouraging that some companies had already announced their intentions to invest more in their infrastructure due to the announced changes.

He said speculation that rural communities would not benefit from the Government's plans were wrong.

However he acknowledged there could be a time lag for the benefits reaching rural communities.

He said the Government would continue to launch initiatives to bridge that gap.

Telecom chief executive Theresa Gattung's speech at the conference -- attended by rival operators and major business users -- was conciliatory.

She addressed the view in the industry and the media that Telecom was only moving begrudgingly to introduce new technology and stressed the firm's commitment to New Zealand.

"We are not arguing to turn back time; we are not going to be obstructive; we are not going to mount any rearguard actions; we are not going to fight old regulatory battles; we are not going to hide behind legalistic arguments," Ms Gattung said.

"We are New Zealanders. We are committed to New Zealand and New Zealanders, and we are acting swiftly to get traction right across the company with our new directions.

"Throughout Telecom, we are 100 per cent committed to making the new environment work."

- NZPA