<It's true that power companies might have an inclination to construct such a network but when ? >
When the profits are worthwhile. Unfortunately, Helengrad is in charge and despises profits, so Vector won't invest. Unfortunately too, even when they did, and they already own a lot of fibre, their idea of what the market will bear and what the market will bear are two different things.
The same for CityLink and the same for Velocity [two more bunches of fibre in Wellington and Hamilton respectively].
Getting back to basics, there are seven Cardinal Vices and one of them is envy. Making a lot of money is held in contempt in NZ, generally. Envy is the problem.
City councils might charge "not much" <Usually municipialities do not charge operateros much for use of right of ways - it's in their interest to become attractive as a favourable location for businesses. > But when Zenbu tried to build metropolitan Wi-Fi, the council made it difficult, Vector made it impossible.
Fibre providers have also found "not much" to be too much. "Not much" includes Resource Management Act compliance, which means wall to wall lawyers and decades of environmental approvals which means denials. The NZ government has started winding back the worst excesses - such as trimming and removing trees being allowed without costly application to councils.
The environmental approval processes, Commerce Commission risk = profit is ipso facto proof of abusive monopoly, government approvals in general, employment laws [once hired, employees legally own the company = it's assts, not the actual shares and can't be laid off], minimum pay laws, taxes and other imposts, regulatory burden [lawmakers and regulators love making guess what - yes, more of them].
Having set up all the barriers, people then start whining that there isn't cheap fibre to the home. It isn't really surprising that Hong Kong and Japan have cheap fibre all over the place. They apparently don't have laws against doing anything and they have swarms of well-off people per square metre.
But councils charge for access in another way, apart from direct use of corridors and regulatory burden. Rates [council property taxes] are now absurdly high. They have no idea on spending restraint or that there is a limit to how much people can afford. The underlying problem is as with other democratic processes, Peter and Mary vote to spend Paul's money and with the old problem of concentrated benefits and diffuse costs, "It's only a small amount of money" soon adds up to serious expense.
People look at how much money they have coming in, then they look at what they want to buy and how much they legally have to hand over to various government demands and decide what they will buy with the little they have left over after government demands and basic costs such as food, doctor bills etc. Fibre is well down the list for most people because the costs are so high.
Since governments have most of the money, they then decide for the house holder that they shall have fibre available. Because it's government doing the deciding, they ipso facto do a bad job of deciding where to put it. It of course goes down the streets of their friends and supporters. The political decision is to put the fibre down the streets of poor people, not just the wealthy. Their ideology is to bridge the digital divide between the haves and the have-nots.
Unfortunately for those best laid plans of mice and men, the problem for poor people is not the lack of money so much as the lack of brainpower. The digital divide is one of intellect rather than money. You can lead a horse to water but you can't make it think. I simply have no need for access to vast amounts of data so my petaflops per second processor can manipulate mountains of information to predict climate change or land a rocket on Mars. So if you poke a fibre right in my front door, I might not bother plugging it in, even if it's free. My brain is already full.
Politically, it wouldn't look good for governments to put money into fibre to only one side of the digital divide. The other side of the digital divide will want it too - to watch porn or Oprah on big screen with very high resolution.
A better solution would be for government to cut down their thickets of regulatory and tax impost burdens and leave people to buy and sell. Cut rates and charge what the market will bear for right of way for water, sewerage, electricity, telephone wires, fibre, gas.
Then there could be LOTS of choice. With water supply very expensive, people would start buying truckloads of it, or collecting it off their roof, or recycling waste water, or using plasma dried faeces processing, or public baths and showers, or bottled water. With high road tolls at busy times, there would be no traffic jams. People would choose trains, buses, taxis, bicycles, feet, Segways, motor scooters, live somewhere else. Fibre would be rolled out to the right side of the digital divide. People who want megaflops per second would live and work where there's fibre and fibre would be rolled out to where megaflop per second people want to live. There might not be sewerage to some places - it's easy enough to process waste water on-site and send the ash out in a rubbish bin. Some places would have gas, some would not, same as now. People could choose coal, electricity, wood, solar, heat pump, waste oxidation as energy sources. Twisted pair is handy, but there are other choices such as Wi-Fi, WiMAX, LTE, CDMA, Globalstar, optical fibre, lasers, the Post Office snail mail.
I would like to invest in fibre, either directly such as fibre to Cook Islands, or more to NZ as competition to the Southern Cross cables, but governments do it via Kordia [their subsidiary]. It's impossible to compete with governments because they set the Calvinball rules.
The PPP agreement for fibre will be an ugly beast, inefficient, ugly and expensive. Having got so much government running everything anyway, it's about the only way to get fibre because commercial providers won't want to provide while staring down the barrel of government regulation and competition. Vector would want to invest, but won't [because profits are not allowed - even if they did market it effectively].
Meanwhile, 25% of the population have voted with their feet [only the productive can leave because migrants can't bludge when they go to Oz, UK, China, Japan, Singapore, USA].
Then there's the whole net neutrality business with governments tell people how much they are allowed to charge for packets and which packets they have to carry when.
Recently, Telstra decided not to carry Zenbu packets. So Zenbu sent email to all the Telstra customers telling them that Telstra was not letting their packets through. Telstra got a lot of phone calls inviting them to fix the problem toot sweet, or else. Telstra then managed to fix the problem. Zenbu does not recommend Telstra as an ISP as a result. Reliable suppliers are needed. Subscribers to Telstra will draw their own conclusions.
It's a never-ending source of fun and frustration dealing with communities, the individual versus the collective, rules, regulations, markets, freedom vs fascism, fatalism versus power and rent seeking. Everyone votes with their money and their feet and the Devil take the hindmost.
Gong He,
Mqurice
PS: I kicked myself after I'd bought Vector shares and the government brought in rules saying "You are not allowed to make a profit more than bank deposit rates". What was I thinking? Knowing government "thinking", of course they would attack such an evil-doing monopoly. But the government now expects me to provide them with net neutrality fibre to the wrong side of the digital divide. Yeah right. Fool me once, shame on you, fool me twice, you can't do it again. |
