What will happen to telecommunications in New Zealand next year?

There was plenty of pork-barrelling over broadband during the election, with National outdoing Labour in promising $1.5 billion to build a high-speed network that will reach most of us (the exact percentage of the population covered is still being debated). Although the funding promises from both parties arrived very late - let's face it, we should've started this four to five years ago - it was good to see money finally being made available for that crucial infrastructure upgrade.

Then, the global financial crisis came along and now everyone's wondering if there will be any money in the kitty to build the promised broadband network. National hasn't said otherwise yet, so presumably it's still a goer, but who knows? Investors like Dr Paul Winton of Temple Investments are trying to figure out what'll happen with the broadband investment, and it was interesting reading his five scenarios in the Herald.

In scenario one, National holds back the $1.5 billion and Telecom carries on with business as usual - moderate cabinetisation of the network, keeping copper as the last-mile access method with DSL over it - could happen, if the government rolls back some of the current regulation.

The second scenario, in which the government keeps the money and Telecom spits the dummy over regulatory requirements like operational separation and pulls up stumps doesn't seem very likely. It would force the government to intervene and hold Telecom to existing agreements.

Speedier cabinetisation as in scenario three, with the government funding some of it, is a pragmatic solution that would retain existing investment by Telecom and competitors in DSL technology. It would also offer limited last-mile competition, since apparently the cabinets have room for gear from four providers plus Telecom. If power requirements are sorted out, VDSL2 connections will become commonplace.

The FTTP scenarios, four and five, would stun everyone if they happened. Scenario four would kill existing investment under the current regulation in DSL, possibly leading to providers going to court to stop the FTTP rollout. Scenario five would kill Telecom's retail and wholesale broadband business and I can't see that happening.

I'm quite interested in a scenario in which property owners receive a subsidy from the government to lay fibre tails to the road however.
Now's the time to get the investment in a broadband network right, and make sure it'll last as long as possible. For that, copper and DSL isn't going to cut it. We need fibre to the premises somehow, to hook up with the ample fibre networks already covering much of the country. A "homes with tails" scenario seems to offer both flexibility and scalability to achieve this.





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March of the femtocells