Rules may change under Nats' net policy

National leader John Key has been to two strip clubs.
National leader John Key has been to two strip clubs.

National leader John Key has not ruled out the possibility of using regulations to get Telecom to play ball with the party's proposed national fibre optic network.

Mr Key unveiled National's broadband policy yesterday, saying an "ultra-high-speed" network was critical to economic growth.

National would make the government a cornerstone shareholder by putting up $1.5 billion and introducing new telecommunications regulations.

Mr Key said no one had firmly fixed the cost of a national fibre network, but mid-range estimates are $3 billion to $5 billion. A recent New Zealand Institute study has estimated the cost would be $4 billion to $5 billion.

Though details are scant, the plan is to roll out fibre to the homes of 75 per cent of New Zealanders. In the first six years, priority would be given to businesses, schools, hospitals and clinics. Funding would also be provided for a mix of fibre, satellite and wireless broadband for remote areas.

The network would be open-access, which means any Internet service provider would be able to use it to compete for customers.

Mr Key said regulation would be one of the key tools of rolling out the network, but it should be "wielded lightly".

Telecom is in the early stages of developing a $1.4 billion fibre-to-the-cabinet network that promises speeds of at least 10 megabytes per second (Mbps) to 84 per cent of lines by 2012, as part of its deal with the Government. Fibre to the home could be 50-100 Mbps.

The New Zealand Institute says Telecom's upgraded network would provide only about a third of the estimated $2.7 billion to $4.4 billion of economic benefit generated from a truly high-speed fully fibre network.

Telecom spokesman Mark Watts said the company welcomed National's policy and was open to private-public partnerships.

Asked how the company would view a new raft of regulations after last year's regulation of its fixed network and this year's operational separation, Mr Watts said: "I can't hypothesise for what the future might bring but whoever's in charge after the election, we're happy to work together on ways of doing more with broadband."

Business groups are backing the policy, with some reservations.

Business New Zealand chief executive Phil O'Reilly said such a network would especially help small to medium exporters gain a cost-effective global presence.

It would also be a plus for multi-national companies considering setting up in New Zealand, and a reason for those already here to invest further. But even with the right regulatory settings, it would be hard to get the private sector to invest several billion dollars, Mr O'Reilly said.

Tuanz, an advocacy group for business telecommunications customers, said the policy would receive strong support from its members. .

Tuanz chief executive Ernie Newman said the Labour-led Government's strategy had been too short-sighted and National's policy could prove cost-effective in the long run.

The Dominion Post