KEY POINTS:
As I walked through Amsterdam this week, the smell of dope in the winter air, I wasn't paying much attention to the big trench running through the red brick footpath like a deep gash.
That was until my friend pointed out that the cables being laid were part
of CityNet, a project to get fibre optic cables to 40,000 homes in Amsterdam and eventually to as many as 420,000 citizens, companies and institutions in the canal-laced city.
The Dutch, you see, are where New Zealand needs to be this time next year - blowing fibre through underground ducts in order to get better broadband to large numbers of homes and businesses.
Our Government late last year said its goal was exactly that - so-called fibre-to-the-home, where cables capable of carrying data to and from the internet at a rate of 100 megabits per second and above are fed from the central telecoms network right into the customer's premises.
Faster, more reliable internet is seen as crucial to governments pitching their countries as good places to do business.
But it is expensive to build FTTH networks, which explains why traditional profit-driven telecoms operators have been less than enthusiastic about investing heavily in the technology.
The Dutch came to that conclusion back in 2006 when the Amsterdam municipality, a couple of private investors and five housing corporations chipped in ¬18 million ($33 million) for phase one of a FTTH network. The total cost of the network could be as much as ¬300 million.
It could well be seen as the modern equivalent of building the docks and shipyards that led Amsterdam, with its flourishing Dutch East India Company, to rule world trade in the 17th century.
Phase one is expected to be completed in the next few months but already the Amsterdam FTTH network is being seen as a model for other European countries.
For starters, it has been built on an open-access model meaning that any internet provider or telecoms operator interested in reaching the people of Amsterdam can buy capacity on the network on the same terms.
CityNet was also subject to a long investigation by the European Union which looked at whether local government involvement in the project amounted to some kind of unfair state subsidy. It ruled last year that the funding was a genuine investment, not "state aid", clearing the way for similar projects. The Amsterdam network is also interesting in its financial and ownership structure as it marries private sector Dutch lenders such as ING with local government.
The close involvement of local government is also likely to have helped the project stay on schedule by cutting through red tape.
BBned, a division of Telecom Italia, pitched for and won the contract to manage the network. It will act much like Telecom's new access network group Chorus, selling fibre capacity to players who use their own equipment to deliver everything from high definition TV to video conferencing and high-speed file uploads.
The average Dutch broadband subscriber pays about ¬50 for a triple-play bundle of high-speed internet access, telephone and pay TV.
BBned believes it can go head to head with established DSL and cable players with the same type of pricing.
Every big city in Europe is starting to follow the Amsterdam example. The old rules of telecoms infrastructure investment are being thrown out.
