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Fibre Watch: A good Rogering

16 Jun 2011

The Telecommunications Amendment Bill passed its second reading in Parliament this week, meaning there's little more than a bit of rubber-stamping left to be done before it becomes law.

The Telco Bill paves the way for Telecom – or, more precisely, its soon-to-be-hived-off Chorus division – to assume its new role as the main builder of the Government’s $1.35 billion Ultrafast Broadband initiative.

The legislation signals massive changes to the telecommunications landscape and it has had its fair share of critics along the journey to becoming law. The controversial ride is just about over, however, with the Bill now due back in the House next week for its third and final reading, which will just be a formality.

Before the Bill passed its second reading, however, nay-saying MPs had the opportunity to voice their disquiet and, as Communications Day reported, Act politician Roger Douglas let rip with both barrels. Sir Roger said the Bill was the culmination of the National government's blind promise, before the last election, to deliver a nationwide fibre network. It was a blind promise, he said, because it was made without any evidence that such a network was needed or that it would deliver on its promises.

"The greatest flaw with this Bill is that it lacks vital information to make an informed decision. There has never been a wide economic analysis done on the Bill by Treasury," he said. This is true, as Communications Minister Steven Joyce has admitted, so perhaps Sir Roger is correct to criticise the Bill, and the UFB network it precedes, as a blind piece of policy by the government.

On the other hand, all technology investments are essentially steps into the unknown. The government is taking a gamble, but it's a gamble with a huge and vital upside for the country's economic wellbeing if it pays off.

Joyce says the net cost to tax payers will eventually be whittled back to $600 million once the debt the Crown is stumping up for Chorus is eventually paid back. That, he argues, is by international standards a very cheap price for a network which will provide fibre broadband to three-quarters of the population.

Sir Roger may not see it that way, but Joyce has struck a good deal which should deliver a decent network at a very reasonable price. 

We now just have to hope that it gets built as promised, and that it does indeed deliver an economic fillip to the country, proving Sir Roger wrong in the process.