KEY POINTS:
The most colourful criticism I've read of the Castalia report goes like this - "A typical product of cardigan-wearing economists with conceptual blinkers on."
The 87-page report, commissioned by Telecom, Vodafone and TelstraClear, argues against the Government's mooted $1.5 billion spend-up on a fibre-to-the-home broadband network.
The
cardigan line came from an anonymous comment-poster to an Australian tech news website. While they may have chosen not to identify themselves, certain telco industry players have been happy to put their names to some equally blunt criticism of the report.
"This is a backward-looking, negative, self-serving report," said Ernie Newman, chief executive of the Telecommunications Users Association. "The authors fail to grasp the transformational outcome New Zealanders aspire to from early, ubiquitous access to ultra high-speed broadband."
Internet NZ's executive director, Keith Davidson, said the report's "key pitfall is the lack of vision in reiterating tired arguments about whether New Zealand needs fibre or not".
The report is unquestionably self-serving to the telco heavyweights who commissioned it. They have collectively invested billions in the country's communications infrastructure and are, not surprisingly, perturbed at the thought of some new government-subsidised network eating into their return.
But what seems to irk the report's critics most is that its backers' attitude reeks of an arrogant attitude that should have been left behind when the Government moved to strip Telecom of its local loop monopoly in 2006.
Telecom, in the days prior to the arrival of chief executive Paul Reynolds, was renowned for using its monopoly position to smash rivals. The company's approach to businesses is markedly different today but the Castalia critics have got a whiff of the bad old days from this report.
Castalia is right to point out that there's no point wasting scarce public money over-engineering the national broadband network. But the likes of Newman and Davidson are also right to stand up in defence of a strong vision of technology-enabled economic transformation.
Fibre to the home is not the be-all-and-end-all of achieving the Newman/Davidson vision. As IT entrepreneur Rod Drury points out elsewhere on this page, we also need to improve our international broadband connectivity if we want to keep up with the rest of the world technologically.
There's also a need for more investment in telco "backhaul" infrastructure, a less sexy but just as important component of the overall national network.
I'm not sure whether Castalia's consultants really do wear cardigans, but their anonymous critic is correct to imply there's a certain style or flair lacking from their report. It somehow fails to find the value of an intangible element to New Zealand high-teching itself up.
As Davidson puts it: "A fibre rollout is clearly a nation-building exercise and, as such, requires significant investment by the Government. The incumbents [Telecom, Vodafone and TelstraClear] need to focus on how they can work with government to help deliver on the vision, rather than trying to stand in the way."
The Government's role, meanwhile, is to hold on to the vision while also being fiscally prudent.
