KEY POINTS:
National's ambitious billion-dollar-plus plan to bring faster internet access to three-quarters of New Zealand homes and companies has been hailed by business and internet groups.
But the Government says it is extravagant and opportunistic.
Party leader John Key yesterday promised a taxpayer investment of $1.5 billion over six years in high-speed internet technology if National wins this year's election.
Within a year of taking office, Mr Key said, he would convene negotiations with telecommunication companies to thrash out their role in contributing the remainder of the $4 billion it would cost to meet National's broadband target.
National wants to see the current copper wire network upgraded to a fibre cable network.
That shift would greatly improve upload and download times, and Mr Key predicted benefits of between $2.7 billion and $4.4 billion a year to the economy.
"New Zealand has already fallen behind our global competitors when it comes to broadband," he said. said.
"We've delayed the big decisions and put off investment for long enough.
"Every year that goes by with us languishing behind other countries is another year of missed opportunities."
Broadband was as important to New Zealand's economy as roads and railways - areas in which the Government had invested billions of dollars.
Mr Key's deputy, Bill English, has downplayed the need for public money to be spent on broadband, but yesterday Mr Key said better internet access has passed the "national interest" test.
"If it were left solely to the market we would be extremely surprised if fibre to home is rolled out any time in the foreseeable future," he said.
"That's because the business case for it initially probably wouldn't support the investment, but over the medium term it will make a tremendous difference for the New Zealand economy," Mr Key said.
Communications Minister David Cunliffe said National's plan would cement Telecom in as the dominant fibre network provider.
The party's plan amounted to a state subsidy for a monopoly firm, Telecom, Mr Cunliffe said.
"The only logical bill partner is the incumbent, Telecom. The Crown will need to get a return on that capital and it will also be the case that Telecom will want to get a return.
"That means they will have to sell access to the network that they alone control, and it is the terms of that access that will be difficult for the rest of the market to believe will be truly competitive."
Labour's broadband plans are still under wraps, and observers expect an announcement in next month's Budget.
Telecommunications companies said that regardless of which party was in power after the election, faster broadband was in the best interests of New Zealand.
Telecom spokesman Mark Watts said the company thought Mr Key's idea was worthy of further exploration, and the company had talked about a possible public-private sector partnership in the area for some time.
"Whoever is in government after the election, we are happy to work with them in this area," Mr Watts said.
"If this proposal is a way of putting some more money in the pot overall and helping to extend things further in more innovative ways, we are happy to look at some of the potential there."
Telecom had already made a substantial investment in faster internet, and had a four-year $1.4 billion "cabinetisation" programme to increase speeds.
Vodafone corporate affairs general manager Tom Chignell said all companies subscribed to a vision of broadband driving economic growth, and his firm would support moves towards that by whatever government was in place.
"We are certainly of the view that fibre has a big role to play in that future, but we also believe mobile technologies do too, so we see fibre and wireless being the enduring technologies."
But consumer demand would need to be high for Mr Key's plan to succeed, Mr Chignell said.
"If enough people aren't going to take it up, it's going to be difficult for anybody really, be it other parties or the government, to make business sense of this."
FIBRE DIET
* National wants fibre cables hooked up to 75 per cent of homes and businesses to give faster access to the internet than existing copper cables.
* If it wins the election, National says, it will negotiate with telecommunication companies within a year about expanding the fibre network. It has pledged to provide up to $1.5 billion over six years of the estimated $4 to $5 billion cost of the upgrade of the broadband network, with the rest to come from the private sector.
* Companies would tender for contracts to improve access to fibre cables, and local government would also play a role. Businesses, schools, health facilities and homes would take priority.
* National would also double spending on improving broadband access for remote areas.
