Microsoft New Zealand takes diplomatic approach

2.00 pm - By PETER GRIFFIN, IT writer

Microsoft New Zealand is distancing itself from a spat between its Australian sister company and the Australian Government, but the technology issues at the heart of the dispute are faced by both countries.

Microsoft Australia sparked an indignant response from the country's IT minister Richard Alston early this month when it released a 50-page lobby paper punching holes in the Australian Government's IT policies and offering words of advice.

But "The Way Forward" paper, which was critical of Australia's slow take-up of broadband services, its approach to intellectual property protection, IT skills training and the digital divide, drew widespread support from the Australian IT sector.

Locally, the paper's airing has been met with a more diplomatic response - not suprising considering the amount of business the major vendors do with the Government.

Microsoft's managing director Geoff Lawrie would not comment directly on the New Zealand Government's IT policies, but a Microsoft statement praised initiatives such as the digital opportunities project kicked-off by the Government last year and a software agreement between Microsoft and the Ministry of Education that is expected to deliver $10 million worth of software to schools over two years.

Microsoft however had little to say about Government moves to encourage high-speed internet use, despite New Zealand languishing in 20th place in the OECD (Organisation for Economic Co-operation and Development) in terms of broadband penetration. Australia is in 16th place.

New Zealand's pricing for broadband does not compare favourably against other OECD countries because of the restrictive download caps Telecom puts on its Jetstream high-speed internet service.

Across the Tasman, Microsoft warned the Government to "keep a critical eye" on broadband pricing, particularly from Telstra and described Australia's high-speed internet subscriber base of around 123,000 as "a pittance given Australia's overall population and given that we are widely viewed as early technology adopters."

Microsoft recommended the ACCC undertake an independent assessment of broadband pricing and improve competitors' access to Telstra's local loop.

Last week the Australian Government was scrambling to defend itself, describing Microsoft's paper as "confused". A spokesman for Senator Alston said the onus was on software vendors to develop applications that would stimulate demand for high-speed internet.

"All new technologies are expensive initially, but once you get a killer app, you punch through that. That is what will drive it, not whether you give Government subsidies or try to force down [broadband access] costs. You can stream broadband into every single home, but what are people going to use it for?"

Peter Revell, the New Zealand country manager of network software company Novell, said broadband services would develop commercially with the government taking a largely hands-off approach.

"I would be very doubtful that the government would, or should, see it as their responsibility to do anything other than create the right climate for the telcos to make their contribution.

"The strength of the players in the telco market in New Zealand augurs well for them to make an appropriate contribution to bandwidth requirements."

Technology Policy Blueprint: The Way Forward