Appeal for sale of Telecom's fixed lines

The New Zealand Institute is proposing Telecom sell its fixed-line network as part of the think tank's plans to generate greater national income from broadband.

The institute yesterday proposed setting up a new infrastructure entity to oversee the investment and rollout of a full fibre-optic network, and argued the case for Telecom to sell its copper and fibre lines linking it to customers to the new fibre company. Telecom, which is an institute member, was unenthusiastic with the sale plan, but said it shares the institute's aims for faster broadband and is keen to contribute to the discussion.

The institute proposes broadband be delivered by fibre to the premises of 75 per cent of the population within 10 years. It estimates the cost to be $4 billion to $5b, with about $1b required from the Government.

Institute chief executive David Skilling said that depending on service providers' technology and pricing, download and upload speeds of 50 to 100 megabits per second (Mbps) could be expected.

In comparison, Telecom's $1.4b network upgrade plan promises speeds of at least 10 Mbps to 84% of lines by 2012.

Telecom's upgraded network would provide only about a third of the estimated $2.7b to $4.4b of economic benefit generated from a truly high-speed fully fibre network, the institute said.

Telecom spokesman Mark Watts said the company formally committed to the Government to trading separation and rolling out the next generation network only on Monday and that is where its focus and energies would be.

Skilling said the institute's proposal is aimed at encouraging debate over the most efficient way of reaching New Zealand's economic goals.

He said the key question is whether New Zealand wants to continue ploughing money into copper-based technology or moving to higher-yield fibre.

The institute envisages the fibre company granting equal and open access to service providers. The Government would regulate the price of access. Private investment in the network would be more attractive than now.