By CHRIS BARTON
The Government's Probe project to provide low-cost broadband access to schools is not only missing a crucial ingredient, but also may have blown a golden opportunity. Probe's raison d'etre is to get broadband capability to schools and regions where it is sorely lacking. But nowhere in the project does it say the schools have to buy the broadband once it's there. And at the prices Telecom charges many would still say "we can't afford it".
By holding open tenders for broadband capability region by region, the Government hopes to stimulate broadband competition and hence reduce prices. But by focusing on infrastructure capability rather than actual delivery to a customer - the schools - the Government has adopted an all too familiar hands-off, free market stance. Yes, Rogernomics is alive and well in the regions and supported, somewhat ironically, by none other than the people's bank saviour Jim Anderton and closet Rogernomes Trevor Mallard and Paul Swain.
But what else could the Government do? A more logical approach would be to aggregate the broadband demand of all the schools and put that out for tender. In other words ask the market for a price to actually supply all schools and in the process gain the benefit of buying bandwidth in bulk. Such a tender would provide a massive incentive to newcomers which would be guaranteed a cornerstone customer to help justify their investment. It would also provide broadband to schools for many years to come at massively cheaper rates than on the free market - a sweetheart deal broadband vendors would fall over themselves to offer in order to win the tender.
Interestingly, TVNZ's transmission arm BCL offered the Government just such a deal before Christmas. But it was rejected - apparently because the Government wanted to make tenders for broadband to schools contestable.
It's the type of deal Optus did in Australia last year with the New South Wales Department of Education and Training to deliver two-way, broadband internet access via satellite to 171 remote and rural schools in the state at a cost of A$4.5 million. That was followed up in July with Commonwealth Government funding of A$8 million to establish a shared broadband Interactive Distance Learning (IDL) communications infrastructure for New South Wales and the Northern Territory.
As well as showing a real commitment to improving education, the Australians have rapidly provided a broadband to regions that were unlikely to ever get it, and given a leg up to viable broadband competition to the Telstra monopoly. What the Australian politicians have grasped that our politicians have for so long failed to comprehend is the fundamental tenet of telecommunications - bigger is better. That aggregating demand - in this case the bulk broadband needs of remote schools in two Australian states - is a hugely tempting carrot to dangle in front of telcos and satellite operators.
Were our Government to do the same, it would have at least three satellite operators - Optus, New Skies and iPSTAR lining up with offers. Not to mention what BCL, Telecom, TelstraClear and probably quite a few other players would do. But interestingly, to reach all of New Zealand's remote schools, satellite would be the only option able to deliver. Even wireless network BCL with its nationwide infrastructure of transmission sites admits there's at least 10 per cent of rural customers it cannot reach. And Telecom admits at least 15 per cent of its customers cannot get its fast internet. Worryingly, many of those unreachable customers are schools - and quite a few are not just in remote areas, but actually in major cities.
As a pioneer customer to help offset a $10 million to $25 million investment, schools are hugely attractive to satellite operators because they are largely daytime users of broadband. That means the operators can resell the provisioned capacity to evening and night home and business users.
But unless the Government holds out such a carrot, satellite infrastructure is going to pass New Zealand by. Already New Skies is looking elsewhere because prospects for business in New Zealand look bleak. Optus can sell here, largely by piggybacking on its Australian investment, but its technology is seen by many as first generation broadband and will need more capital soon to compete with newcomers like iPSTAR. The latter is due to launch one of the world's biggest communication satellites at the end of 2003. It promises more bandwidth than ever thought possible via satellite (2Mbps return and 8Mbs forward) and smaller dishes costing less than US$1000.
It also has spot beams and, more importantly, a gateway beam earmarked for New Zealand. But unless there's a business case, that too may never eventuate.
But the real problem this Government faces in getting broadband to schools is overcoming the philosophical and economic constraints it introduced in 1989 under the guise of Tomorrow's Schools. That dogma - whereby individual schools take responsibility for the management of their running costs - means our children are largely cut off from the benefits of bulk-buying.
In telecommunications - and in particular broadband - that path could provide not only huge savings for our education system, but also huge benefits. Not just for our children, but also for residential and business broadband users who would gain access to more choice and greater competition.
But sadly our Government is still haunted by the ghost of Roger Douglas and seems unable to break free from his ill-thought-out economics. The result is most of our Tomorrow's Schools are increasingly looking like Yesterday's.
* Email Chris Barton
iPSTAR
Bulk-buying a sensible alternative
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