This blog post strays a little from the central perspective of the real estate market, but I think you will clearly see the contextual relevance.
The new government has made a commitment as part of the election promises to “invest up to $1.5 billion to drive the roll-out of a “fibre to the home” ultra-fast broadband network in New Zealand” – that is great news, as for the more than 853,000 broadband subscribers in NZ will atest having broadband is now a need-to-have rather than a nice-to-have, especially when for some reason you end up having to experience dial up again!!
Recent articles have indicated that the performance in the growth of broadband penetration in NZ positions ourselves in the top 6 countries for rate of growth, but as we all know fast growth often comes off a small base and the data from the OECD annual report (June 2008) shows that NZ ranks at #19 of the 30 countries for subscriber penetration at 20.4 subscribers per 100 inhabitants as the graph below shows.
Clearly being below the OECD average means we have a lot of catching up to do, however what is concerning in my judgment is the facts hidden in the makeup of the graph – what form of broadband do we have ? The graph above shows how dependent our broadband is on DSL – with very little cable and virtually no fibre.
This is the crux of the issue – if you believe broadband is reflective of DSL performance then we are failing to aspire to the vision of true broadband. Think of it this way – we here in NZ on our DSL lines (through copper wires) are experiencing the internet with the equivalent of a 1930 DC3 whilst the rest of the world is flying around in Concorde – the fact is that today the maximum speed that our major broadband supplier is able to offer us in Auckland is 7.6 Mbps and for that we have to pay between $49.95 and $79.95 – now compare that to Stockholm in Sweden, households there have a 100 Mbps fibre connection for the equivalent of $29! – 13 times the speed for almost half the cost. (By the way these are download speeds, let’s not start to examine upload speeds of just 128Kbps in NZ!)
Not only that but the inhabitants of Stockholm (a city of similar size to Auckland) have the ability to switch broadband ISP provider at the click of a mouse as price competition is a reality with multiple providers.
The reason for this hyper-connected environment lies in the “dark fibre” as alluded to in the title of this blog post. I must admit a week ago I would have made the assumption on hearing the term that it referred to the next Batman movie – but no, it is in the judgment of Brough Turner (SVP and CTO, NMS Communications) that the key to unlocking broadband performance is in who owns the network of fibre cables that connect your house – which when unlit by a laser are called Dark Fibre. For as he states you own the right-of-way to your home and thereby you can allow all delivery trucks, postal and other service companies to attend to your needs, so it needs to be with the fibre connection.
Brough was a speaker at the Emerging Communications Conference in the US earlier this year and spoke to what he called “Own the Network – A Radical New Approach to Internet Connectivity“, I came across the presentation by way of IT Communications podcast and was motivated to listen a couple of times to fully appreciate the significance of this subject.
The critical issue is the recognition that the core infrastructure of dark fibre should not be left to the ISP providers to install rather it should be seen as a primary utility infrastructure much as with water and waste pipes and other services, thereby allowing more open competition to those who want to provide services to “light-up” the fibre. Now unbundling of the local telecommunications network in NZ is a move in this direction, but from reports this only applies to the existing copper wires. For our collective future we need to see more investment in fibre as this is the future of Information Communications.
Finally, it is not just super connected Sweden that outshines NZ – here is a comparison of other countries broadband services as compared to ours – hopefully with the new government’s planned to springboard us up the OECD ladder of broadband we will soon be connecting across the world at supersonic speed.