NZ broadband woes small compared to Oz

When a government is embarking on a massive multi-billion dollar project like broadband, shouldn't they get a national agreement, a consensus as to what they are trying to achieve?

New Zealand's Ultra Fast Broadband (UFB) project always appeared to have had that consensus, as all parties, from the main political parties to much of the business community, had seen broadband as some kind of "public good" where a bit of state intervention was necessary to help hurry things along.

Unfortunately, the consensus seems to be crumbling, with telcos and consumer groups getting upset. They fear Telecom is getting too much of the work and the UFB will become a monopoly that will harm consumers, especially if its participants benefit from a 10 year regulatory holiday.

The opposition Labour Party has also jumped on the bandwagon, saying that the Crown Fibre Bill as it currently stands will raise prices and reduce competition.

Renewing Labour Party calls for bi-partisanship over broadband; its ICT spokeswoman Clare Curren made the following threat:

"We want to minimise any risk to investors; we understand the importance of this network. We want New Zealand's future to be linked to a high speed digital network that will provide the bedrock for an innovative export-led recovery and for sustainable jobs to be created for our children.

"If the government does not moderate it significantly. If the law is driven through without significant change, then we cannot say we will uphold it, should we be elected. We cannot announce a hard and fast position until the select committee has finished its work and the Bill is reported back to the House."

Such a statement has already proved unsettling, with participants now "pricing in" the extra risk of changes to the regulatory regime when New Zealand, eventually, elects a Labour-led government.

Labour is also saying that ICT minister Steve Joyce cannot deliver the UFB project.

I am sure he will. Broadband was a central policy objective of the government, with Prime Minister John Key taking a special interest in the project.

Joyce is strong enough to push the Bill through, yet pragmatic enough to make changes and ensure he does so with business backing. He is a businessman after all. He will also want to be able to say "job done" to the voters and to the PM before the election, after which many say he will then become Finance Minister.

As for Clare Curren, her concerns over competition are legitimate, but I smile to see her quoting TelstraClear, whose boss Alan Freeth has previously attacked the UFB as network socialism that stifles private investment.

Fortunately for the UFB, Labour is unlikely to win this November's election, with current polls having it 20 per cent behind National.

Even if Labour won our election, the changes it would bring would be quite small as the parties still agree on the broad thrust of the project. Thus, taxpayer and business investment in broadband will be safe.

Contrast that with Australia, where the Labor Party is 10 per cent behind the Coalition in the polls, and if the latter is elected it will axe the NBN if it doesn't stand up to a cost-benefit analysis.

So, even though NZ has its own woes, Australian Labor is playing a higher stakes game, not only with billions of taxpayer and business investment, but also with the direction of broadband in Australia. It seems as though we across the Tasman are in a better boat after all.