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.
