Dial-up mentality

While much of the developed world is focused on delivering hundreds of megabytes to the door, many of us are still struggling to get beyond dial-up speeds.

According to the World Internet Project New Zealand has the second-largest proportion of narrowband users in the 30 countries surveyed in 2007. Only Colombia has a larger percentage.

We’re prepared to buy back the railway lines and trains, but appear uncertain about how to progress tomorrow’s core fibre-optic conduits into business and homes to replace our rotting copper network.

Photograph:  Telecom caretaker Peter Troughton (centre) with Tom Burns (left) chairman and managing director of Ameritech-Bell Atlantic New Zealand and deputy director of Telecom with banker David Richwhite who helped broker the sale of the former State-owned enterprise. Photo: TUANZ Archives.

Despite a stream of reports and recommendations from industry groups, think tanks, scientists, economists, technologists and visionaries, action lags rhetoric. The lack of a clear government roadmap and incentives is holding back investment. For example, several major community fibre plans remain stalled after a follow-up to the 2005 Broadband Challenge funding failed to materialise.

Telecom has promised to deliver 10Mbit/s to 80% of New Zealanders and 20Mbit/s to 50% by 2010. A series of reports suggest that will have to quickly ramp up to 100Mbit/s to cope with user demand. Huge investment and momentum is required way beyond Telecom’s commitment to $1.4 billion investment on its next generation network (NGN); funding first announced several years ago and re-announced under new management.

A growing number of competitors, partnerships local authorities and others keep beavering away to widen true broadband coverage The $900,000 profit of independent backbone provider FX Networks says it all: Do it right and the investment pays off.

National’s promise of $1.5 billion to accelerate the roll-out of fibre-to-the-home to 75% of New Zealanders within its first six years in office sounded like the needed leg up. However, the counter move by Labour, $340 million over three years, now known as the Broadband Investment Fund, leaves me wondering how serious the government really is in pursuing its goal of getting into the top half of the OECD broadband rankings.

The fact is we’ve been waltzing between place 19 and 22 in the OECD for the past six years, and remain compost at the bottom of the heap.

The latest Statistics New Zealand survey shows a 10.7% increase in broadband numbers to 891,000 for the six month period ending March 2008 while the number of dial-up customers dropped 9.3%. The announcement is something to celebrate but comparatively that’s just 1.6% growth on September 2007.

Broadband penetration is still appalling and, during peak hours, speeds often decline to below dial-up levels.

Today’s dilemma is built on 20-years of squandered opportunities. We failed to appreciate our pioneers, dismissed the reports and recommendations of highly qualified, hands-on engineers, technicians and visionaries and expected somehow that "market forces" would lead the way.

In April 1989, New Zealand became the first nation in the Asia Pacific region with a full 9.6kbit/s connection directly into the US internet backbone, through a subsidised NASA link into the National Science Foundation (NSFnet) node in Hawaii. That connection was achieved - at a time when the government and Telecom backed proprietary networking - by innovators in academic institutes who had no government mandate or support.

Not quite network

Instead of leading the world into a new era of affordable, high-speed digital communications, customers and competitors of Telecom have had to fight for every increment in bandwidth and every drop in price.

In June 1990 Telecom was sold to wholly owned subsidiaries of Bell Atlantic and Ameritech for $4.25 million, in the biggest business deal in New Zealand’s history. In 1992, the World Communications Laboratory (WCL) had been established to promote New Zealand as a centre of excellence for broadband connections capable of supporting voice, data, video and graphics. There was a specific focus on the faster roll out of fibre-optic cabling with initial funding from government, business and carriers. The funding plug was pulled in late 1993.

In 1990, Telecom embarked on hybrid fibre-coaxial (HFC) cable trial claiming it would deliver movies and fast data connections to 300,000 homes. First Media piped more than 20 channels of TV to the Auckland suburbs of New Lynn and Pakuranga.

Meanwhile, Bell Atlantic and Ameritech, having reinvested very little in New Zealand, took the money ($11.5 billion) and ran.

In June 1999, Telecom finally let its fast internet service out of the bag. Jetstream, however, was not fit for video, pricing was high, data caps were low, and due to the condition of much of our copper, performance was often poor.

In Telecom’s own statement only 75% of customer lines are capable of speeds higher than 6Mbit/s, and it is doubtful you could get more than 8Mbit/sec over 65% of them. The average speed is 2Mbit/s to 3Mbit/s. The journey to 20Mbit/s is going to be a long one.

Even existing broadband goals are unlikely to be met due to the dire shortage of skilled contract labour. While there’s an obvious need to ramp up broadband momentum, Telecom wants to dampen down "open fibre" plans and slow the pace of development in case its two-decade vice grip is further loosened.

Visionary viewpoint

In reviewing the history of communications technology in New Zealand for my book Connecting the Clouds (Activity Press, 2008), I was once more appalled not only at how Telecom has been able to hold the country to ransom for so long, but by the refusal of successive governments to take the evolution of our telecommunications infrastructure seriously.

We have failed to train the right people for the times ahead, undervalued our knowledge workers, inventors and creative people and allowed our progress as a nation to be hijacked.

So who do we listen to? Those constrained by three year thinking or shareholder expectations of a quick profit, or those with a longer term goal in mind; the engineers, computer scientists, researchers and innovators who have done their homework and know that the future is about light-speed communications?

The membership of InternetNZ, including many of the nation’s internet and technology pioneers and the up and coming generation they are mentoring, are more than willing to share their collective wisdom on such issues. No government can afford to ignore their advice, their independent analysis or their willingness to be involved in forging our digital future.

We are at a critical crossroads. We can move rapidly into catch-up mode or further isolate ourselves from the trends that are reshaping business, communities and nations.