KEY POINTS:
Telecom and the business sector are praising National's plan to put $1.5 billion into ultra-fast broadband access but the Government says it would be a huge waste of taxpayer money.
National Party leader John Key announced the ambitious plan to put broadband into every home and business through fibre cables over the next six years if his party wins the next election.
"I'm not talking about broadband speeds as we know them now," he said yesterday.
"I'm talking about download and upload speeds many, many times faster than most Kiwis have ever experienced."
Mr Key said that with the fibre network he wanted, people would be able to use the internet at lightning speed - essential if the country was to increase productivity and remain internationally competitive.
The plan involves government investment and leadership linked to the private sector through a joint venture, with total investment estimated at between $2.5 billion and $5 billion.
Telecom owns most of the network and has started investing more than $1 billion in fibre cabling.
Copper wire is mostly used at present, and it has limitations.
"That copper line may have been up to the job a decade ago, but in 2008 it looks like a dirt track when compared to the fibre highways we could be using," Mr Key said.
"It just can't carry enough data fast enough to service the latest cutting-edge internet applications."
Telecom chief executive Paul Reynolds welcomed the "substantial public funds" National would put into extending fibre-based services.
"We have consistently said that public/private partnerships have a big role to play," he said.
Business NZ chief executive Phil O'Reilly said a public/private partnership was the logical way to spread the cost of a huge undertaking.
"The main problem currently is the fact that the private sector can't make sufficient return from New Zealand's small market from the large-scale investment needed," he said.
"National's proposal...could potentially help overcome this funding barrier."
But Communications Minister David Cunliffe saw nothing but problems and trouble.
"It's back to the future...if this extravagant subsidy is ever rolled out all the good work the Government, industry and business have done in dismantling Telecom's monopoly position will be lost," he said.
"This puts all of National's eggs in Telecom's basket and means the incumbent has both them (National) and the market over a barrel in future access pricing negotiations."
Mr Cunliffe challenged Mr Key to a debate about how the plan would not create a new monopoly, waste money and reduce competition.
"National's plan risks not only a new round of regulatory failure but would also be a huge waste of taxpayers' money," he said.
The Engineering, Printing and Manufacturing Union (EPMU) said the plan was "a step in the right direction" but it might not be possible because of the skills shortage.
"We would like to see more detail about how the money promised will be spent, and we'd expect a pretty big chunk of it to be allocated to wages and training if this announcement is to be taken seriously," said EPMU national secretary Andrew Little.
Mr Key today told Breakfast TV that National would borrow to get the $1.5b needed for the policy.
"The Crown has a debt borrowing programme. It already for the last eight years borrowed $3-$4b.
"We always have that programme. It's no different from building roads or investing in Transpower, all the sorts of things the Crown does. It's just part of our capital programme," he said.
It would take a year to complete the negotiations and five years to roll out the first trance of the programme, for businesses and educational facilities.
National's finance spokesman, Bill English, last year opposed a similar policy.
But Mr Key said Mr English now backed the idea.
Mr English had said a government would do this as a "last resort," Mr Key said.
"We're up to the last resort."
- NZPA
