Last week I wrote the post “Isn’t the answer mobile?” which created a great deal of interest, commentary & thought provoking questions. Thanks to those who commented, some of what you wrote provides the basis for this post, as well as comments on Rod Drury’s blog post about FibreCo.

I guess the best starting point is to say last weeks post should have been titled “Isn’t PART of the answer mobile”. It’s clear from both these posts that mobile technology alone won’t suffice, but equally importantly neither will fibre. The FibreCo idea is audacious, and the vision both compelling and energising (which I suspect is the major goal behind it), however it does have a few weaknesses. I’m not here to throw stones at it, because I love that at least someone has provided some constructive solutions to our fast internet conundrum, what follows is my own attempt at conceiving some more.

In my opinion FTTP (key being P not H) (editors note – FTTP is Fibre to the Premises, as oposed to fibre to the Home) is only needed by a small (but hopefully growing) group of businesses. Not everyone needs a raging torrent of internet access, just like not everyone needs Mac trucks, PDA’s, high definition printers or computers at all. Hand in hand with this, I must also admit that I’m not sold on the 1:1 causality that goes with the belief that ubiquitous fast, cheap internet access will drive economic benefits. I don’t see massive queues of ‘weightless businesses” just waiting for fibre, I also don’t see all the other fundamentals (like wages, taxes and support) being addressed to drive the weightless economy. Maybe it’s chicken & egg, but I’m not convinced. Simon Arnold also asks if you need ubiquity in his comment on Rod’s blog”

But if you go back and look at the source of the benefits being claimed by NZI that make up the $2.7-4.4 billion per year (see here) most are able to be captured with much lower than the 75% penertration they are justifying the need for public investment off. I do think a bit of hard nosed analysis of marginal cost of provision versus marginal benefit is warranted.

Secondly, if you do need that kind of data throughput, you should take Bwooce’s advice …

If you want fast internet access for your business, site your business appropriately. ….. Just as you may choose to live next to an airport, you may choose to live in an area with crap internet coverage

If I may extrapolate this out a little, you may want to even have the position that if fast, large bandwidth internet access is important to you, you should pay for fibre to be connected. The great news is that Telecom’s cabinetisation program will make this more affordable. The way I read it (& again-not an engineer!) Telecom will be laying a lot of ducts & the distance to the Cabinet is going to be a lot shorter… so it should be that the cost of getting Fibre installed will decrease. This position should hold true if you are a business or consumer who wants IP TV.

Having just said Fibre is just one of the solutions it’s fair to say that I also believe that ADSL broadband has a role in our future. For some it is more than adequate. Again, as Bwooce says 24 mbps is plenty for email, internet, video conferencing etc. By that, it addresses the NZI’s ‘Telepresence’ and ‘Remote working’ economic benefits. (as a sidepoint even Cisco’s full monty Telepresence system only requires 15 mbps & that’s way more demanding than a web-cam type approach!) For digital media and other data intensive sectors is ADSL going to be enough? No, see point 1, buy fibre…

Mobile….I caught up with some folks about my previous mobile theory. According to them (the royal them) there area bunch of things you can do on a cell site like sectors, carriers & polarisation which all work to decrease contention, optimise spectrum use and generally make the experience better for the consumer & more economic for the carrier.

Despite popular opinion, ISP economics is important, if they can deliver services cheaper (and make an operating margin), then generally the price to customers will be cheaper, but it’s not all about price. Again, according to ‘them’, doing all these things could allow you to deliver speeds of up to 1 Mbps (maybe more). This speed would definitely improve if high demand users went to fibre. I know 1 Mbps ain’t fantastic against global benchmarks, but again for some it would be a great leap forward and more than suffice. I’m thinking of people on dialup (and there are still nearly 700 000 of those) or old plans (256kbps for instance, again plenty of those). Tom Chignall of Vodafone commented on Rod’s blog

We don’t need a fibre vision – we need a broadband vision which connects the people of this country to each other and to the outside world.…. Our view is that wireless has a major role to play…., The technology is in place today to deliver as good an experience as I get over my Telecom service (resold thro ugh Vodafone!)in Auckland’s central suburbs. Wireless speeds are doubling very soon and we have Telecom and NZ Comms entering the fray with similar technologies.

I agree with Tom’s major points , we need a vision that connects NZ to the world in the most appropriate way for them. I think this vision means when you buy a fast internet plan, you are going to have to make some choices based on your particular needs. If you are one of those companies or people feeling massively restrained by ADSL (financially, gaming wise, IP TV wise) then you are in one camp. If you get on the internet to ‘get the email’ like my mum, dial or mobile technology might be fine for you. The reality is though, whatever you choose, you should be aware that you are going to pay for it ….. there are no free rides. To me this is the crux of the issue for NZ . Just look at the links above, price isn’t the impediment (we’re cheaper than the OECD average), fast speeds are available, so why so many dial and low speed plans? No need for them?

For all those who did comment and weren’t referenced, your input did help, again many thanks.

1 Comment
  • Being quoted is a first 🙂

    Having digested the FibreCo proposal it appears that the aim (or one of them) is to prevent a massive investment in xDSL technology now since that tends to scupper a parallel investment in fibre being made — there has to be a RoI for the xDSL. The same argument could be made for any wireless technology that provides similar coverage. It brings to mind the AC vs DC infrastructure problem that early electricity rollouts had. This is only now being switched off. 125 years later…the free market can give ugly lumpy solutions but it gets there in the end.

    It is a great initiative from NZI and a good point to make. Fibre will have a longer lifetime and higher speeds than copper, especially dodgy copper. Rolling out a copper last-mile is like using a twisted pair bus approach for phones instead of a CAT5e/CAT6 star in a new house; the economic delta is minimal but the opportunity cost is huge. I’m less sure about dark-fibre within houses.

    I’d support mandating fibre for new subdivisions and buildings, assuming they have fibre going past their door already. Some (a lot?) are already doing it anyway. What I don’t support is more uncertainty about regulating or nationalising infrastructure, this uncertainty kills investment (such as Vodafone’s) which delivers something right now.

    I hope we can have another stimulating debate. I join you as a deluded detractor though. Sounds like a new tagline 🙂

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