Will Fibre Co ever see the light of day?

If the New Zealand Institute's detailed plan to fibre New Zealand turns out to be the departing chief executive David Skilling's swansong, he's certainly left us with plenty of food for thought.
The NZI has been very proactive in formulating ideas for some coherent policy on broadband. It understands that we need good-quality, high-speed connections at affordable prices to take advantage of the weightless economy. Now it has added some concrete figures to the mix and made some pretty significant suggestions that already haven't gone down well with industry players like Vodafone.
Chief among those suggestions is that Telecom's network be nationalised and other fibre network assets be bought up to create one big monopoly player, Fibre Co.
Monopoly, you say? But isn't all this regulation we've seen introduced designed to bulldoze Telecom's monopoly? Yes, but the NZI reflects a point of view that there simply isn't enough incentive on the part of Telecom or anyone else to invest in securing us the type of broadband we need for the future.
As the NZI explains: "FibreCo is a national price regulated monopoly granting equal, non-discriminatory access to dark fibre on a cost per connection basis Price regulated monopoly."
It would involve the structural separation of Telecom (which officially split into three groups on Monday), possibly the buy-up of other assets from players as diverse as TelstraClear, Citylink and Vector. Those players would get a shareholding in Fibre Co along with the Government and accept a conservative rate of return (10 per cent) on the investment. According to the report Telecom averages $80-100 per premise per month in revenue ? Fibre Co's more modest aim is for $50 per premises.
The estimated investment needed to get FTTP (fibre to the premises) to 75 per cent of the country is $4 - $5 billion over the next ten years, with the Government expected to chip in $1 billion.
The bulk of the cost, $3.5 billion, would be spent on 25,000km of fibre ducting, laying the passive infrastructure, the rest of the cost made up of the equipment that would run the network and other costs. Thrown in is an estimate of the cost of brining FTTP to 97 per cent of the country - $10 billion. The institute has already suggested the annual productivity gains it believes a national fibre network would deliver to the country - $ 2.7 - $4.4 billion.
The Fibre Co build out would happen in stages with the first one aiming to reach up to 300,000 premises.
"Capital is raised in tranches. First round funders get a right of first refusal on future rounds in proportion to initial investment," notes the institute, which has been studying similar public-private partnerships around the world, including the Amsterdam FTTP project I had a look at in February.
It's an ambitious project which would have far-reaching consequences, perhaps too far-reaching. It would play havoc with the existing plans of telecoms operators and with Fibre Co in place there'd be little incentive to come up with alternative infrastructure, such as WiMax networks. Everyone would get the same base fibre, so companies would be able to compete only on their services.
Very egalitarian and probably good for the country over all. But companies are naturally self-interested and I think there will be few big players willing to throw their lot in with Fibre Co.
Wellington tech entrepreneur Rod Drury, who has worked closely with the NZI on the plan seems to be of that opinion as well.
"?I also feel a sadness that this visionary plan, that leverages our competitive advantages of size to get organized, has little chance of actually happening," he wrote on his blog today.
What do you think, Is Fibre CO, a bridge too far? Should Telecom be nationalised. Is there any better alternative to get the high-speed network we need to stay internationally competitive?