Apr 2, 2008

Fibre To Every Home And Business The Only Solution

Very interesting report out today from the New Zealand Institute. We agree with Skilling that the problem is Telecom. We also agree with those on radio suggesting that a 3 year return on this type of investment is absurd. A high quality nationwide fibre optic network is going to have a life of many years. It is infrastructure akin to roading. Treasury requires benefit cost calculations to assume a payback within 10 years for roading projects (which is also absurdly short a period). Internationally 40 years is becoming the norm. We would have thought that somewhere in the 10-20 year period would be where full payback should be assumed for a fibre optic network.

We would be much happier with a private sector solution to one involving Government investment. Government should be restricting its role to regulation. Forcing Telecom to divest its copper network would be a good place to start.