The announcement by National Party leader John Key that a National government would invest up to $1.5 billion to roll out an ultrafast broadband network has sparked major interest in the telecommunications industry.
The Otago Daily Times understands the announcement caught the Government by surprise and has meant a rapid rewrite of the digital strategy policy, which was to be included in the 2008 budget being released on May 22.
Many of those attending the Tuanz Telecommunications Day, in Wellington, spoke in glowing terms about the commitment by National for a "fibre to the home" network.
With both major political parties committed to providing the ultrafast network, the debate now is around how it will be rolled out.
Whatever happens, the private sector, represented by many of the 140 delegates attending the Telecommunications Users of New Zealand conference, will be asked to stump up and help pay.
National Party deputy leader Bill English assured the Daily Times he was not about to announce anything new.
However, he did point to private investment in the public-private partnership model as the most likely way National would go about funding the fibre to every home and business in New Zealand.
Communications and Information Technology Minister David Cunliffe spent much of his 45-minute address repeating what the Government had already achieved in telecommunications. He also spent 10 minutes taking National to task about its plans.
Mr Cunliffe did say the Government's "comprehensive" digital package will be released soon.
It was not appropriate to pre-empt it at the conference. It would follow the policy framework already adopted by the Government.
Any new measures would be competitive at all levels, robust, technology neutral, driven by the needs of consumers and highly leveraged with private-sector co-investment to generate maximum economic and social benefit.
The Government would avoid replacing incumbent dominance over copper with a new dominance over fibre, reduce the costs and barriers for rolling out fibre to the home for all providers, upgrade New Zealand's rural broadband infrastructure, co-ordinate public sector spending to provide incentives for investment, leave the Commerce Commission with full authority for setting wholesale prices and not pursue connection goals in isolation from the other key components of the digital strategy.
"While fibre to the home must remain the end goal, the means to achieving this end are critical and deserve close scrutiny. I believe we have made remarkable progress over the last couple of years and it is important that any new policy initiatives build upon rather than undermine this progress." he said.
Mr English said the conference was an opportunity to explain why National "moved across the line" to enthusiastic support for fibre to the home.
His rationale was that it would open up the possibility of services that no-one could expect.
Mr English admitted to being a late convert to the benefits of an ultrafast broadband network, but he was now firmly in the camp of having New Zealand homes and businesses connected to the best network available.
He used the story of text messaging on cellphones as an example of a service that, he said, came from its popularity with Japanese teenagers.
Now, text messaging was the main way he kept in contact with his six children, knowing when to pick them up from practice or where they were at 2am.
"This wasn't a service anyone expected."
The phenomenon that would drive a National government's policy for fast broadband was the social interaction available, with the most significant aspect of that being the ability for self aggregation, Mr English said.
Fast broadband gave people around the world the ability to, at no cost, find other people with whom they wanted to connect.
The barriers of regulation and government interference were mainly removed.
The National Party would introduce incentives for public investment and change the way that infrastructure was funded away from cash to a mixture of cash and long-term borrowing.
That would probably apply to the fibre-to-homes project.
Up to $70 billion was needed to be spent on infrastructure by central and local government.
By doing that 10% more efficiently, a fast broadband network could be paid for many times over, Mr English said.
A National-led government would be prepared for the Crown to take a loss on the establishment of the network, but that would not be a permanent situation.
A return on investment would be needed and users could not expect a free service.
National believed people would pay for good services. If they would not pay for what was provided, then the mix was not correct.
National had told Telecom just before it released its policy but had not changed anything after that meeting, he said.
Skill shortages emerged as a major stumbling block to implementing policy from the Government or NationalIndustry representatives spoke of how tough it was to attract people of all ages into the information, communications technology industry at all levels.
Telstra Clear chief executive Alan Freeth said his company had a large project underway in Kapiti. A lack of New Zealand workers meant 30 workers from India had been brought in for the job. It was the second time Telstra Clear had done that.
Most of the workers were supporting an extended family back in India.
"It's a global market for these people. You find us all competing for the same skills."
Telecom wholesale chief executive officer Matt Crocket said Telecom had been recruiting people offshore, as well as working with international partners, to get enough staff to work on some of the projects.
It was estimated that 200 gangs of fibre layers would be needed to install fibre to 75% of New Zealand homes. There were not enough digging machines available in New Zealand to do the job.
Telecom had a graduate programme that was proving successful, with 95% of the graduates staying on to work for the company, he said.
Vodafone offered university scholarships to attract staff, chief executive Russell Stanners said.
Recently, the company had employed 150 people at its call centre because that was all it could find.
Tuanz chief executive Ernie Newman said he could not find one person in government who had a sign "the buck stops here" when it came to skill shortages.
"There are pockets of activity everywhere but none of them are connected. You need to get someone identifiable in government who can take responsibility for this," he told Mr Cunliffe.
That included having people ensuring the next generation was trained with the right skills.
Mr Newman offered what he said was a simple solution to the problem of getting the fibre to 75% of New Zealanders.
"Practically every farm and rural property in this country already has a line of poles going to it. Stringing fibre cable across the existing electricity or phone corridor, possibly using community labour such as groups of farmers under professional supervision, would lower the cost dramatically".
"It's a matter of thinking about users pushing lines in towards the network rather than telcos pushing lines out to the user".
That implied that Resource Management Act issues could be dealt with. Balance was required, he said.
The enormous economic and social benefits of high-speed connectivity were matched by environmental benefits.
Tele-presence reduced commuting and transport needs, environmental resources such as water and fertiliser could be better managed through increased information, and health and education could be improved.
"So if the environmental flip side is that a string of fibre cable is added to the power poles in provincial and rural areas, that seems to me a very easy trade off. We won't destroy the planet hanging it from power poles".
"It's crucial that we are realistic about the balance between the desire for services to go underground and the economic and environmental benefits that ubiquitous fibre will bring to areas with low population density," he said.
A key question that needed to be resolved was the role for local government.
Central government had been at best ambiguous and at worst contradictory in the signals it had given to local authorities about their role in telecommunications.
There was an expectation that councils would be involved in some way in the next generation of telecommunications development and several had already taken the initiative.
But the scope of the role was unclear, Mr Newman said.
There was a wide diversity of financial resources available among various councils.
If the Government looked to them all to take a role, what would happen to the councils that genuinely did not have money available?
"A better definition of the expectations for the future was required".
