New Zealand's field of dreams
If we don't build it, they won't
come, writes Keith Newman
First published in an abridged form in
Computerworld, August 2008
Caption: Frank March (left) and John Houlker were instrumental in
signing a deal with NASA for a 50% subsidy in the costs of linking Waikato
University to the US internet backbone which went live in April 1989. Photo
Photograph: Peter Dengate Thrush.jpg
Caption: Peter Dengate Thrush was involved in a legal and advisory
capacity in the formation of the Internet Society of New Zealand (now
InternetNZ) from 1995. He now heads the global internet body ICANN.
The past two decades are littered with hype and broken
promises, the legacy of dominant carriers who put more energy into curbing
competition and maintaining profits than investing in the essential
The phrase from the 1989 film Field of Dreams "build it and they
will come" springs to mind. Every time there has been an increase in
available bandwidth that capacity has been rapidly devoured. Expectations
that the Tasman 1, Tasman 2, PacRim East, and Southern Cross cables would
each meet our need for the foreseeable future proved wrong. Southern Cross
is still struggling to cope with our international traffic needs.
As a nation we have played this waiting game too long. Build then
bottleneck, over and over. Like the wagon trails, the railways and the
sealed roads that enabled revolutions of the past, the new infostructure,
comprising high speed copper, wireless and fibre-optic cabling is the key to
our field of dreams. The challenge, however, is more dire than ever: if we
donít build it, they wonít come.
"They" are investors, international business people and businesses
looking for world class infrastructure and lifestyle.
Dial-up mentalityWhile 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.
Weíre prepared to buy back the railway lines and trains, but appear
uncertain about how to progress tomorrowís core fibre-optic conduits into
business and homes to replace our rotting copper network.
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 Telecomís 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.
Nationalís 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 weíve 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 thatís just 1.6% growth on September 2007.
Broadband penetration is still appalling and, during peak hours, speeds
often decline to below dial-up levels.
Todayís 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.
Closed ISDN trials were planned from 1987 and it was expected that by
1990 a narrowband digital network would be commercially available, enabling
users to operate telephone, videotext, packet switching, facsimile and
various data networks as one integrated service. Telecom
then insisted "broadband" ISDN (30x2Mbit/s channels) should be available to
all New Zealand homes and businesses by 1995. It never happened.
By the time narrowband ISDN arrived in 1992 it had
virtually been superceded by 2Mbit/s dial-up lines, the advent of next
generation frame relay (up to 45Mbit/s), fast packet-switching and
independent fibre networks. Hardly anyone could afford it.
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 Zealandís 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
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.
As Kiwi Cable (acquired by Saturn) expanded its cable TV and
communications network into Wellington
and Christchurch, Telecom began digging up the same streets. Then a stoush
with Sky TV curtailed the content it could offer. After an estimated $200
million investment and passing
only 68,000 homes it was over.
Telecom claimed it had found more appropriate technologies to carry fast
data and video and began pulling cable out of the ground, all the while
saying it would continue looking at the relevance of fibre to the curb.
A new technology called digital subscriber line (DSL) would deliver
everything we need more cheaply, they said.
Meanwhile, Bell Atlantic and Ameritech, having reinvested very
little in New Zealand, took the money ($11.5 billion) and
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
A couple of years later Telecom was talking about IPTV, on-demand movies
and services over the internet delivered by shortening the copper loop and
taking fibre closer to the curb. It ran several trials and stated in its
2006 Annual Report that IPTV would be rolled out late in 2007 over its NGN.
It even formed a business unit to oversee that, but the deadline shifted out
to 2009 due to the demands of unbundling and operational separation. This
year, the unit was quietly dismantled. IPTV is no longer on Telecom's
Closed to open access
In the midst of the debate over the need to increase funding for open
access fibre, I am stunned to hear the input from the leaders of our two
major telecommunications providers again attempting to dumb down the game.,
TelstraClearís CEO, Dr Allan Freeth, should have known better than to
tell us "true high speed broadband available at home is not important for
New Zealandís future" only days after informing the country it was about to
embark on a major investment in broadband infrastructure. His comment that
fast internet to the home would mainly be used to view faster porn and movie
downloads was an insult to home business and remote workers who have been
demanding better service for years.
And recent comments from Telecom CEO Paul Reynolds questioning why New
Zealand should spend billions of dollars on creating 100Mbit/s fibre-to-the-home
when people arenít using what they already have, leave me fearful for the
He stated a motorway without cars wasnít smart and was clearly
undermining the debate about the need for open-access fibre Ė in other words
fibre Telecom doesnít own - saying the majority of New Zealanders are yet to
be persuaded to subscribe to ADSL over copper let alone pay a premium for
fibre. Of the 93% of New Zealanders able to get ADSL, he said, only 44% had
taken it up.
This reminded me of Telecomís previous input into the infrastructure
debate. Back when dial-up was the only way to get online we were told
28.8kbit/s was adequate for anything anyone might want to do. Then, once
56kbit/s modems were mainstream and there were interminable delays in
rolling out DSL, we were again told dial-up was sufficient for most peopleís
With DSL finally here we were told 128kbit/s was broadband until Telecom
admitted a couple of years on that perhaps 256kbit/s was where it began. Now
2Mbit/s is too slow for most users and, when the throttle was opened beyond
that, the shortcomings of the aging copper network were again exposed.
In Telecomís 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 thereís 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
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
The membership of InternetNZ, including many of the nationís 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.
Iím reminded of the quote from sci-fi writer William
Gibson, who coined term cyberspace: "The future is here, its just not evenly
distributed yet." We canít afford another three years of digital
Newman has been writing about communications technology for over
20-years. His new book, Connecting the Clouds Ė the Internet in
New Zealand, covers the development of our infrastructure from Morse
code to our evolution as a digital node on the global network. The book
commissioned by InternetNZ is published by Activity Press and online as a
wiki ( www.nethistory.net.nz
). Newman also updated his Kiwi Telecommunications Timeline at
Connecting the Clouds
Signed copies available from
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