Will ultra-fast broadband deliver anything new?
The collapse of Pacific Fibre's plan to build the country's second international fibre-optic cable is likely to put a brake on the rapidly falling cost of domestic internet access. More important, any prolonged failure to create a competitive infrastructure for international connectivity risks stifling the development of innovative internet-delivered products and services, warns a leading telecoms expert.
Dr Fernando Beltran, a senior lecturer in the Business School's Department of Information Systems and Operations Management, says the new Ultra-fast Broadband (UFB) network being rolled out across New Zealand is in danger of failing to deliver on its promise.
Early indications are that – regardless of their size – providers may be "planning to offer more of the same, just faster: more video-on-demand and more games," Dr Beltran says.
He adds that the failure of Pacific Fibre's proposed 13,000 km high-speed cable linking New Zealand to Australia and the United States – which was backed by Sam Morgan, Stephen Tindall and Rod Drury – could make the UFB network unattractive to international hosting and content delivery network operators looking to invest here.
“If New Zealand does not have additional competitive international connectivity infrastructure, incentives may be low for some entrepreneurs and start-ups to venture into innovative services whose markets may be mainly abroad,” he says.
“Also, international hosting and content delivery network operators – that may find New Zealand’s stability and business environment a plus to their plans to invest in the country – will probably delay or cancel their projects as international connectivity is still a monopoly with Southern Cross and Telecom.
"If building this expensive network is meant to deliver on the Government's expectations of innovation, creativity and economic growth, we need to identify now the opportunities for new businesses to flourish on the open access platform," Beltran says.
“Whilst it is early days, New Zealand needs to decide how its publicly-funded telecommunications structure can create space for meaningful and socially beneficial contributions.
“That planning requirement is important because we already have schools in this country with fibre to the door and no providers willing to offer valuable services, which is a ridiculous situation.”
Beltran says the emerging UFB platform will enable new entrants to compete for the provision of IP-based services, meaning that the focus will not just be on entertainment uses. However, more international capacity is required because the UFB cannot remain an "in-house" New Zealand enterprise.
He says the recent Internet Technical Architecture Conference, which met in Auckland, looked at places such as Cleveland in the United States where optical fibre has been used for 30 years. Case Western Reserve, Cleveland's main university, has in that time used it to connect with the poor communities in the city.
“It is now used as a non-commercial way of getting essential services to people, such as healthcare and education,” he says.
“With the willingness and integration of several providers, this has been a great success. A similar thing could be done here on a smaller scale.”