KEY POINTS:
I was in motorway traffic for 30 minutes, obliged to commute to the office during rush hour because the children had blown my monthly broadband data cap in 30 minutes by downloading videos.
And I reflected on how everyone I visited on a trip to France had either
just installed a new broadband service or was about to do so.
But here, 6km from the exchange, I get 0.7 megabits a second on a good day - that's only 35 per cent cent of what I pay for, which is 2 megabits a second. Once Telecom's data cap is imposed, I get 0.05 megabits a second for the last half of the month.
The phone line, call waiting, call minder, very marginal broadband service, and two mailboxes costs me $96 a month.
At present, I can buy only a Telecom broadband service with the choice of getting billed by Telecom or one of its competitors.
Elsewhere in the developed world I could buy a much better service at lower cost from any of the competing service providers.
My friends in France get a much better deal because France, like all OECD countries except New Zealand and Mexico, allows competitors to run their own broadband services over the copper wires that run from exchanges to homes and businesses. This is known as "unbundling the local loop".
As a result, for only €29.95 ($59) a month, a typical offering in France includes:
Internet
* No data cap
* Up to 28 megabits a second download speed
* Up to 1 megabit a second upload speed
* Unlimited email accounts
* 10 gigabytes of asonal web pages
* Wifi connection
Telephone
* Keep your existing phone number
* Unlimited free calls to 49 countries
* Free voicemail, call minder, caller ID, conferencing, divert on busy or no answer, or for every call, block unwanted or anonymous callers, and much more
Television
* 100 high-definition channels
* Video on demand
* Digital recorder multiple sets simultaneously on different channels
The New Zealand Government has legislated to unbundle the local loop, which means that Telecom will be obliged to provide space in its exchanges to competitors so they can install their broadband equipment and attach it to the copper wire network.
Modern technology will allow these competitors to offer broadband internet, high-definition TV and telephone services across the copper wire that runs to your home.
It appears at present only one company in New Zealand has plans to take advantage of this new environment. Orcon plans to leapfrog Telecom with technology that can deliver up to a whopping 100 megabits a second.
The question is whether we are going to be drinking from an internet fire-hose and saving bucketfuls of money when Orcon and others compete.
In reality, there are plenty of gotchas ahead of us.
The first sticking point will be how much Telecom charges competitors. The rumours are that Telecom wants $30 a month for each residential customer.
By contrast, France Telecom charges competitors the equivalent of $12.70 and Telstra $3 to $12, depending on volume. That is despite the much lower labour costs in New Zealand.
Because the monthly fee would be paid to Telecom by its competitors, the higher it is the less attractive it would be for competitors to invest in broadband infrastructure.
This higher fee would be passed on to you and me. As a result, we would pay higher prices for lower-quality services.
Only if we have a robust and competent telecommunications commissioner will the wholesale price of the copper wire from the exchange to your home be set at a level that will encourage competitive investment.
The second problem is that the Post Office engineers who built our network cleverly tweaked the systems so that fewer exchanges were needed. This means our copper wires are longer than usual, even in towns and cities.
The problem this causes for broadband is that even the newer and faster technologies all run slow for users who are at the end of more than a couple of kilometres of copper wire.
The solution to this is to run glass fibre optic cables from the exchanges to roadside cabinets, but this requires yet more investment by competitors.
The third problem is the wealth effect. The lower the household income, the less-affordable broadband is because people have less money left over after paying for the basics of life.
Unless many of your neighbours are also going to take up broadband from them, competitive internet service providers will not invest in your local exchange.
As a result, we are likely to see a patchy appearance of competitors to Telecom and prices and speed will improve only in those patches.
This is important to us because the internet, electronic trading and online shopping are among the major drivers of economic development.
From Roman roads to the clipper ships such as those that once served New Zealand, to the telegraph and onwards, history tells us that improved communications drives economic growth. We don't have 21st-century internet communications yet.
* David Haysom is e-commerce and environmental manager of a large New Zealand company.
