profile New Zealand’s new Communications Minister Stephen Joyce has the gargantuan task of dragging New Zealand into the next broadband age, a labour which is slated to take 10 years.
Although the Kiwi target of reaching 75 per cent of its population with its own national broadband network (NBN) is much lower than Australia’s lofty 98 per cent, New Zealand has upped the speed ante with its fibre-to-the-home play. New Zealanders will be able to enjoy 100Mbps from the country’s planned NBN, much higher than Australia’s plan of 12Mbps.
Yet New Zealand isn’t throwing nearly as much money at its broadband goal as Australia, allocating $1.5 billion to its NBN plans, in comparison with Australia’s $4.7 billion. Some of that is because of the smaller population and target, but some of it is also the government’s strategy of leaving the customer access layer of the network to the industry, while providing just the backbone infrastructure, which Joyce sees as the natural bottleneck and candidate for monopoly.
“We’re focusing on the dark fibre layer. We see the wholesale and retail services being provided on top of that,” Joyce tells ZDNet.com.au during a recent interview.
New Zealand is also looking to go cheap on rolling out the fibre, with micro-trenching and hanging fibre on power poles only some of the strategies being planned to keep the costs down.
There is a certain amount of faith with all of these things.
Yet even removing the cost of the access layer and reducing the bills for laying fibre, it’s a big investment and one which no government can take lightly.
Speaking with Joyce you get the feeling it’s like walking a knife edge: trying to bring New Zealand’s broadband forward, but not so far ahead that no one uses the brand spanking new infrastructure; trying to pump money into the market to speed up the advent of fibre-to-the-home, but not stopping market investment in its tracks.
Given these dangers, Joyce needs his belief that the money is worth the projected benefits to the economy and New Zealand’s ranking in the skills market.
“It isn’t cheap, I agree, but we think with a judicious crown investment we’ll be able to get something happening a number of years faster than it would have happened otherwise,” he says.
To naysayers who wonder what on earth the average New Zealander will do with 100Mbps, Joyce replies there is no way of knowing where the industry will go.
“I think the history of the internet and the history of IT frankly is that the best ideas are stabs in the dark. The only thing we do know is that the rate of growth in processing power, the need for storage and the need for pipes is dramatic. It always heads towards that certain Moore’s law approach,” he says. “There is a certain amount of faith with all of these things.”
Joyce has the faith; perhaps his conviction comes from his successful commercial career, which has seen him build up a radio empire.
I think the history of the internet and the history of IT frankly is that the best ideas are stabs in the dark.
The politician and businessman started his first radio station, Energy FM, at age 21. Together with partners he bought up other stations and fostered their growth over 17 years. These assets built up to become RadioWorks, with 22 local radio stations and four national radio networks under its belt.
The company was sold to Canada’s Canwest in 2001, after which Joyce resigned as managing director, having made his millions.
In the vacuum of retirement, Joyce turned to politics, something he had long had an interest in. He chaired some of the National Party’s reviews, before stepping in to manage the 2005 election campaign which saw a strong National recovery that still, however, failed to displace Labour as the largest party in Parliament.
Joyce stepped back into the private world for two years, taking a role as managing director of a company called Jasons Travel Media, a tourism marketing company based in Auckland.
Last year, politics drew him in again. He chaired the National Party’s 2008 national election campaign and was successfully elected as one of five list only MPs — those who didn’t have to contest for an electorate.
After the win, he was appointed Minister for Communications and Information Technology as well as Minister for Transport, with Prime Minister John Key’s mandate to drive the plan for the roll-out of ultra-fast broadband.
He has leapt to it and spoken about the proposed plan to media and industry. Yet although the goal posts have been laid out so industry knows which way to shoot, the rules of the game have still not been set. Joyce is currently sitting on information such as what the government expects in the way of a regulatory environment, whether it intends to have equity in the project and multiple technical requirements.
That’s the challenge, is for this to be iterative and not either chilling or unnecessarily replacing private investment.
Any questions on such important matters are answered with “You’ll just have to wait and see”.
“We have to go through our internal processes and test it all thoroughly and it’s not far away now,” he assuresZDNet.com.au. “The sort of issues you’re raising will all have to be addressed in the plan. It’s not like we haven’t thought of them.”
In the next few weeks, Joyce will lay out these plans and ask for comment, after which the government will confirm or modify them and start with the process of picking partners — although what form that process would take, tender or otherwise Joyce is unable to say.
Which makes it a waiting game for the public, media and the industry. Joyce understands the risks this means for investment, with the possibility that industry will hold back on investment until it knows what is happening.
“That’s the challenge, is for this to be iterative and not either chilling or unnecessarily replacing private investment. That’s why we’re taking our time to get it right and not just rushing in the door for the sake of it, because I think there are risks around that,” Joyce says.
The fact that Joyce hopes to be underway by the end of the year might ease concerns in that direction, but as Australian Communications Minister Stephen Conroy has found out, things don’t always move as quickly as one wishes.
Whatever his thoughts on the Australian process, Joyce isn’t ready to air them.
“It’s a different plan that the Australian government is proceeding with and it’s entirely up to the Australian government in terms of how it does its things. In the same way, I wouldn’t expect them to commentate on how we are doing things.”
It can be hoped that Joyce won’t be dogged with the same problems that Conroy has been faced with.
He was prepared to say that from looking globally he had discovered that it was important to set things up as much as possible so as to enable different organisations to be able to be a part of different levels of the process, and that New Zealand would benefit the most from focusing on the infrastructure layer.
“But that’s not a comment in relation to the Australian process,” he says, “because I think it’s a different process and it’s trying to achieve the same overall outcome, a similar overall outcome, but by a different method.”
It can be hoped that Joyce won’t be dogged with the same problems that Conroy has been faced with: delays in providing information necessary for the lodging of bids; the incumbent being kicked out of the process; the financial crisis raising ugly questions on price and funding, and bushfires stopping the preferred bidder from being announced at Germany’s big show CeBIT.
Joyce may not hit the same snags, but it’s certain the ride to FttH will not be a smooth one and Conroy might secretly wish it to be so. In typical trans-Tasman fashion, Australia and New Zealand are going about the same thing in two different ways. If one falters, while the other sails on, the comparisons will leave egg on some high-up faces.