Dialogue: Rural folk are missing out on the e-revolution

By JIM SUTTON*

Most people take for granted that the internet and e-commerce are going to change the world and that New Zealand is up there at the cutting edge.

However, a significant chunk of our rural people, who produce 60 per cent of our export earnings, generally without latte coffees, are cut out of the exciting developments on the net.

It is not because they can't afford computers; most have them. And it's not because they don't have modems; they do. They are cut out because they cannot get connections.

A study, by HortVision consultant Trevor Atkins for the Ministry of Agriculture and Forestry, found that 82 per cent of rural people cannot get the sort of access to the internet that is taken for granted by people who live in cities. Even worse, one in five rural people has difficulty using the 111 system for emergencies.

I am concerned that the ministerial inquiry into telecommunications has not yet appreciated and addressed the significant deficiencies in service delivery to rural communities.

When the Kiwi Share arrangement was set up, the internet was in its infancy. Now, many people cannot imagine life without access to the net and e-mail.

People are becoming increasingly dependent on the internet for communication and services. With the withdrawal of bricks-and-mortar banking facilities in particular from some rural locations, internet banking is becoming a necessity for those communities.

Telecom says that all but the last remaining party-line users have an adequate voice-phone system, but the copper wires that carry rural phone calls are not good at transmitting internet data, particularly over long distances.

Some farming families have their phone calls transmitted by microwave services, and this method of communication does not allow internet access at all. MAF research has found that rural telecommunications have not improved as fast as urban services under today's regulatory regime.

Many rural communities now consider that their social infrastructure and economic development opportunities are being harmed by the standard of telecommunications they have available. In short, rural telecommunications are becoming obsolete.

Changes in the regulatory regime may be necessary if they are to keep pace with urban services, and the demands of participation in the global economy.

A recent survey of rural people showed the quality of telecommunications services in rural areas is inadequate, despite the obligations on Telecom New Zealand under Kiwi Share.

That arrangement restricts local call price increases to the movement of the consumer price index, and imposes a universal service obligation to provide services throughout New Zealand on the same basis.

More than half of respondents (54 per cent) reported telephone line problems, including noise, electric fence interference and exchange overload. These problems are particularly of concern for internet access.

Telephone line quality becomes worse in more remote areas: 44 per cent of people living less than 5km from the nearest town reported problems, but 82 per cent of people living more than 30km distant reported problems.

More than two-thirds of people (69 per cent) thought their internet access speed needed to be faster.

Mobile phone coverage was also a problem for 76 per cent. For 41 per cent, the problems were so bad they affected their ability to do business properly.

And 52 per cent of non-farm rural businesses thought they were disadvantaged relative to their urban competitors by the level of telecommunications services provided.

Research carried out for MAF indicates that technological solutions to rural telecommunications problems will emerge within the next 10 years.

To a degree, satellite technologies may reduce this period to as little as two years, but the cost of such technologies will be high for some time yet. In the short term, rural areas will remain dependent on inadequate infrastructure.

It is unacceptable for rural areas to fall any further behind the rest of New Zealand in the development of electronic communications.

If the proposed changes to Kiwi Share are to benefit rural areas, it may be necessary to define the technical specifications for quality of service more precisely - for example by specifying minimum speeds - and to specify the time frame for delivery of the improvements.

In addition, measures are required to address the issue of rural exchange overloading. This has safety implications, with some rural users having difficulty accessing 111 lines at peak-use times.

The inquiry team seemed to consider that rural participation in the information economy will be catered for by emerging technologies and the subsidisation of access to broadband services for schools.

While emerging technologies do offer the potential for such participation, the time frame for the introduction of such technologies and the cost are unknown.

To meet the Government's goal of delivery of "fair and equitable" telecommunications services, the rural sector should be able to take part fully in the information economy, at an affordable price.

The recommendation for subsidising services to rural schools is useful and could be extended to subsidising "telecentres" for rural communities, where a central location has a high-quality internet service available for use by the community.

However, I believe telecentres can provide only a transitional step, providing users with internet skills. Increasingly, internet users will require personal access at home or their place of business.

No one is talking about imposing solutions on Telecom or making the company absorb the full cost of rural fibre-optic cabling in one sudden hit.

Nevertheless, Kiwi Share commits Telecom to providing services to rural people on the same basis and cost as to urban people. Maybe it is worth reminding Telecom's owners that they were sold the company at the low price they got it for only because of those very obligations.

* Jim Sutton is the Minister of Agriculture.