What will be fascinating about their decisions is whether Telecom is an unsuccessful bidder. If the telecoms giant does not succeed, then the regions will see the deployment of a new telecommunications infrastructure - probably a combination of wired and wireless technology.
That would create some interesting competitive forces. In parts of Wellington, where TelstraClear has competing infrastructure, Telecom reduced its prices and it is highly likely it would do the same in Southland and Northland to keep its customers. That would make life difficult for a new player, even though it would have the advantage of being able to start from scratch with modern technology.
Either way, the new player would need a significant proportion of the region's customers to support its investment. And Telecom is going to fight hard to hold on to those customers and protect its "sunken" costs - its copper wires and ancient NEC exchanges.
That's not to say Telecom isn't investing in new technology - just that its transition to the new always has to be balanced against its sunken costs.
Last year, for example, its capital expenditure was $357 million. Of that, $165 million (46 per cent) went on next generation platforms. Legacy platforms took $59 million (17 per cent) and $133 million (37 per cent) went on technology to marry old and new together.
As Telecom builds its new internet protocol (IP) network with Alcatel over the next few years, those percentages will change, with more being spent on the new technologies. But unlike the 20-year-old NEC exchanges, broadband technology advances at a much faster rate.
Already Telecom's two- to three-year-old Nokia DSLAM technology, which provides broadband to much of the country, is considered first generation technology and will no longer be installed in exchanges. Second generation Alcatel DSLAMs, which provide more bandwidth and reach greater distances, will now be used for exchange upgrades.
Sadly, Taranaki, which has just underwritten the broadband enabling of Telecom's exchanges in its region, gets the first generation technology. But Telecom's deployment there and in Otago does at least show the company has a new-found interest in largely rural areas.
But while Telecom's advance to the new world of IP communications is made with one eye constantly on its past sunken costs, Southland and Northland just look forward.
Their visions are to create an infrastructure that will provide broadband now and for many years ahead - requiring planning for capacity that grows, like all things on the net, exponentially.
The significant hurdles to such a brave new broadband world are not just in finding a wireless path to customers' homes and businesses, but also installing capacity to cope with projected gargantuan traffic levels.
Then there's the issue of price. Because the new services will be able to offer local voice and toll calls as well as high-speed internet, the new players will be looking to offer customers more for less.
How much less? Monthly rentals for voice and internet in the order of $45 to $65 - about half the price of Telecom - are not out of the question. But this is a highly competitive and commercially sensitive zone with much at stake.
Which is why the Government tender process must be squeaky clean, and the independent consultants running it, Amos Aked Swift, must be seen to be above reproach.
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Venture Southland request for proposals
Amos Aked Swift
Provincial Broadband Extension Project
