KEY POINTS:
Communications Minister Steven Joyce is under pressure to reveal details of the Government's $1.5 billion broadband network scheme which promises to take super-fast fibre optic internet direct to homes.
Yesterday Joyce said details of how the scheme would work would be announced in the next few weeks.
But many are concerned that the secrecy surrounding the fibre optic plan could unbalance the industry.
Joyce said that the project was too important to rush and the role of regulation was among issues being discussed with industry players.
During the election campaign National's scheme for a $1.5 billion fund was a clear contrast to Labour's $340 million Broadband Investment Fund, which backed smaller individual projects. Joyce cancelled the fund last week.
Industry views of the National policy have been mixed. Some complain the focus on fibre optic cable ignores other technology and question consumer demand for higher cost, super-fast internet.
National's scheme was so grand many wondered if it would happen.
Since it was announced last year, the global and New Zealand economies have slumped and Joyce has been silent.
The Government has indicated the $1.5 billion in taxpayer funding should leverage a similar sum from the private sector, but credit is scarce and investors are wary of risk.
Joyce acknowledged that investment was tight, but said that the fibre optic rollout would occur over 10 years, so that might change.
David Cunliffe - the previous communications minister who is now Labour's finance spokesman - yesterday criticised the lack of detail.
The decision to scrap the Broadband Investment Fund had ended individual broadband projects worth several million dollars and the Government had provided no detail on what would replace it. "It has killed investment in the sector," he said.
Joyce said it was best not to invest millions of dollars in the old scheme when it was not necessarily compatible with the new one.
Industry bodies such as the Telecommunications Users Association are confident a plan will be implemented and that it will be done sooner rather than later.
"There is a lot going on behind the scenes - this is after all a very big decision," said Tuanz chief executive Ernie Newman.
Ralph Chivers, chief executive of the Telecommunications Carrier Forum - headed by the big telcos Telecom, Vodafone and TelstraClear - agreed but said that the processes needed to be made clear. In the meantime Telecom - whose share price will rise or fall based on the shape of the fibre optic plan - will be watching closely.
Bruce Sheppard of the Shareholders Association estimated last year that if Telecom were tied to the Government scheme it could be worth up to 70c to the telco's share price.
But Joyce's discussions are linked to issues such as regulation of the new fibre optic operator, a complex area at a time when telcos are working to reverse the more regulated approach that arose under Labour.
One industry player said that the financial impact of the new scheme would depend on whether it was focused on business and revenue or on social needs.
While organisations such as Tuanz argue that fibre optic cable is essential to boost New Zealand's capacity to join the online economy, others say that faster internet will mean people watching more movies on their computer and more pornography, and spending should be focused on business and technology other than fibre optic cable.
KEY PLAYERS
Steven Joyce: First-time MP thrown into the deep end. Has to make a huge capital investment in a notoriously complex industry.
Paul Reynolds: Telecom chief executive knows that a new fibre-optic network could make or break its return to profit. He will be worried that the new scheme may be run by a distribution company like Vector.
Russell Stanners: Vodafone chief executive will be wary that the scheme is focused on fixed lines and wants the investment to be available for wireless technology such as mobile phones.
Tuanz: Lobby group has strongly supported the National Party scheme which it sees as a leap into the broadband future.
