We'll build it, but will they come?

We'll build it, but will they come?

Summary: I hate to rain on anybody's parade, but the New Zealand Government has uncovered an uncomfortable truth that blows an almighty hole in its flagship broadband policy.


I hate to rain on anybody's parade, but the New Zealand Government has uncovered an uncomfortable truth that blows an almighty hole in its flagship broadband policy.

The Commerce Commission regulators have found that fewer than one fifth of New Zealand consumers are willing to pay more than NZ$10 per month extra for ultra-fast broadband.

As for businesses, three quarters of small businesses are happy with their existing broadband service, and the commission said that there is "no strong demand" from them for applications like high-definition video conferencing.

Of course, such a lack of demand will not mean the end of the ultra-fast broadband (UFB) project in New Zealand. Too many politicians, telcos, the tech sector and big businesses have invested so much, not to mention their own credibility, to allow the project to falter.

All the same, the Commerce Commission survey does present a blow to the UFB's many cheerleaders, who have claimed that the project is vital to New Zealand's national economic interest. And poor demand is bound to slow the roll-out somewhat, since the rate of progress of the roll-outs depends on consumer take-up, unless the UFB suppliers are willing to take a hit on their revenue forecasts.

Personally, I would pay that extra bit for faster broadband, but I am a bit of an internet addict, with a sufficient if not massive income. Fast broadband helps me with my work, too.

However, I know of many who are on struggle street, and they could not find the extra funds even if they wanted to. They have enough trouble even putting food on the table, never mind paying for broadband.

Indeed, the New Zealand Herald has this week been running a series of articles about how tough many Kiwis are having it, even if some might think that their financial problems stem from their own bad choices.

And, likewise, businesses are also having it hard, so they won't be able to cough up extra either, even if faster broadband will benefit them.

Today's survey confirms the need for providers to better sell the merits of faster broadband. They need to justify their expenditure of the taxpayer dollars, just as Australia has to with its own National Broadband Network (NBN).

The argument has often been like the one given in the movie Field of Dreams: "Build it and they will come."

Trouble is, after today's revelations, we must again ask ourselves: "Will they?"

And with Australia's NBN project being far greater and far more costly than the UFB project at this side of the Tasman, such a question seems even more pertinent for Australians.

Topics: Broadband, Government, Government AU, New Zealand, NBN

Darren Greenwood

About Darren Greenwood

Darren Greenwood has been in journalism, not all of it IT, since the days of typewriters and long before the web spun its way around the world.

Coming from Yorkshire, he can be blunt, and though having resided in New Zealand, as well as Australia, for quite some time, he insists he is not one of the 'sheeple!'

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  • You're making a common mistake of thinking that the NBN is all about giving people faster internet. People have to stop using this myopic approach. The cost saving to the health service will very likely pay for the entire NBN once everyone is attached to it, while at the same time revolutionizing health care for everyone (especially those in rural areas and the elderly). It will give the country a new business platform which will provide much needed innovation opportunities in country whose innovation levels are so bad that we may as well all go and dig holes in the dirt such is the skewed economy. It will revolutionize education. Many people won't ever have to commute again and can work in parts of the country that have no industry other than tourism - transforming society. Who gives a rat's bum if people are saying they don't want faster speeds now? It's only techies and early adopters who'd want faster broadband on principle. Media SERIOUSLY needs to start looking at the big picture and not focus on silly little things like this when it's not even been built yet! It's like complaining there's noone to telephone when the phone network hasn't been built.
  • Yes I agree with ABCnick from the perspective that once the capability is in place, people will figure out what to do with it!
    Knowledge Expert
  • Look at the history of telephone rollouts. Initially they were unaffordable for many and there was a great deal of doubt about their utility - after all, you could usually just go to the local post office if you wanted to make a call, so what was the big deal?

    Unlike telephone rollouts (and their later enabling of MODEMs and dial-up banks) the NBN replaces an existing service. In that regard it's quite different, so we can't draw a direct comparison with the infrastructure rollout for phones.

    On the other hand, the copper phone network is ailing. There aren't enough physical lines to service increasing population densities as discrete houses are replaced with flats, high density developments, etc. High-frequency cross-talk from multiple ADSL services on long parallel copper lines is degrading service and causing poorer results for all users. Junctions and pits are needing more and more maintenance as they age and corrode. Installing new copper is more and more expensive as the price for copper goes through the roof.

    Given that, the NBN rollout is the replacement of infrastructure that'll otherwise become more and more overloaded, ineffective, and expensive to operate. I increasingly see its actual performance benefits as secondary.
  • Cheers everyone!
    And thanks ABcNick for that good selling job of NBN/UFB.
    Trouble is, while government can certainly see uses for it, consumers cannot and so it seems, many businesses.
    It looks like that when the UFB has been rolled out in certain places, the providers will have to better sell the benefits of faster broadband to the masses, especially if they need some revenue to fund that further expansion.
    One difference between the two countries, is that the NZ project seems a little modest compared to the Australian one.
    Thus, New Zealand's UFB has all-party support, where the only serious division has been over the role of Telecom NZ.
    Australia's NBN, however, seems of such a vast scale that it was bound to create ructions and debate over whether it offered the best way forward.
    At least this debate raises the profile of your NBN and allows its argumenets be they for or against to filter more into the public conscious.
    Darren Greenwood
  • I always see interesting arguments against the NBN, yet the people making them are already on some sort of broadband, not dial-up. It getting tiring. Back in the days of Web 1.0 and simple e-mail, dial-up was sufficient. Sure, sometimes downloading an e-mail with an 8Mb attachment could leave you waiting 30 minutes but we mostly lived with that. Then came parts of the world moving up to broadband. This spurred web 2.0, MP3 music, on-line photos and the like. Already a 56k dial-up modem got VERY frustrating for me, as web 2.0 web pages could take minutes to load. The internet became annoying to use. I finally got ADSL1, on the artificially throttled 1.5Mbps maximum. This was great for a while, but now facebook, a lot of the news articles I read, and of course YouTube all host video. On most days, this is all very watchable and doable, as the fake 1.5Mbps throttle got released to the theoretical 8Mbps, but then there's the days when the kids are on school holiday and particularly between 7-9 in the morning and 4-6 at night where videos are again non-watchable and web pages are slow. Why? Over-capacity. ADSL is a shared medium and you basically share the bandwidth on your exchange with all others in that exchange.

    My point is, whether we move along with broadband (NBN) or not, the rest of the world will keep moving along. VoIP and IPTV will become prevalent, and our poor ADSL1 and even a lot of ADSL2+ service outside of the 5k radius of the exchange (or not even!) will choke badly on the stuff that's coming around the corner. If we stick with what we have we will again feel like we're in the days of dial-up modem.

    This is not to mention new innovations that WILL come along with the higher capacity bandwidth that will become available globally that Australia will be left behind on if we keep on the same track we are now.

    Everyone is always screaming about the cost to the tax payer, not taking into account it is an investment. An investment with a return that sure, will take a long time, but will pay for itself eventually. I'm not just talking about the physical cost, but the costs savings that arise in the quality of productivity once you have you own dedicated fibre strand capable of 100Mbps (currently) and beyond (in the future).

    The NBN is a good thing. No, a great thing. Cast your minds back to dial-up. Try living today with a dial-up connection (I know a LOT of country areas still do).

    I would really like to hear an opinion from someone in the country with no/bad/or even stable dial-up connection living in today's internet world instead of nay-sayers on already half decent ADSL2+ connections. They need to open their eyes.
  • This argument reminds me of the days were we would download files with a 1200kb modem running Kermit.
    You would start your down / up load at 6pm and pray when you got into the office in the morning it had not

    ADSL 1 & 2 with all the congestion at present is really not much better.

    Mobile Internet works OK around town, but the moment you are in and around country towns it is non existent
    or it is so slow it, the frustration will kill you..

    Fibre has been around for years, it has always been an expensive medium, but the benefits out way the cost.
    Just think if Telstra and Optus had the foresight to run fibre when they were building their Pay TV Networks or
    someone in Government had thought of the NBN back then !

    As technology moves ahead we will require more bandwidth for the new applications which the current technology
    does not cater for.

    Just look at how intelligent TV's are becoming, built in WiFi and web browsers, once you have fibre to the home,
    the old humble TV will take on an entire new role.

    The NBN is an infrastructure project, it will be expensive and it will take time. If you cannot see the benefits of the
    NBN, or you just agree with the garbage that the Lib's come out with, just stick your head back in the sand, and I
    would be happy to sell you my 186 IBM Convertible laptop that runs Win 3.1 on the dual floppy drives.
  • NBN? NBN!
    Get your head out of the sand. Move to Moranbah and try and get a phone connection. Not enough Ports. Want an internet connection, try again in six months.
    If NBN rollout is SO EASY why can't basic phone conections be made to the homes of ew workers in the coal fields two hours drive from Mackay. Long term residence that have been there forever have there connection from the early days but move to the new residentaial developments and telecommunication goes back to the dark ages..
    NBN - get the basics right first. Before you say "mobile" moranbah fals in that 5% area that Australians can't reach and if you are lucky enough to get reception, don't try and use it at peak demand
    Fred of Townsville
    • The aim of the NBN is to improve the current lot of most Aussies.
      • Ooh and Kiwis :-)