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The (inevitable) broadband tax

Apparently, Kiwis are flocking to broadband from dialup in droves.

Well that's hardly surprising is it?

What is surprising is the amount of money that "power users" like myself find themselves still forking out each month to get a half-decent broadband service.

Sure, I could fall back to a plan that offered throttling, traffic shaping and/or a smaller data-cap but that would mean keeping an eagle eye on my download/upload totals while also facing an even greater degree of sloth at peak hours than I do now.

And things aren't going to get any cheaper for "power users" like me any time soon.

That's because Telecom (the defacto monopoly provider) is now going to have to fork out a cool $168 million to fund part of the rural broadband initiative.

That money is going to have to come from somewhere, and chances are that this "somewhere" is the pockets of customers.

While it might seem like a great idea to levy the industry for the costs associated with rolling out broadband to rural areas, I can't help but wonder if this is a tax that will produce waste and inefficiency.

As is the case with so many taxes, the government will collect this new levy from all the players (in proportion to their size or whatever) then bend, fold, mutilate, spindle, "do lunch", have some expensive seminars, appoint well-paid executives to manage it, employ almost as well-paid secretaries to do the actual work and then -- once all these "overheads" have been removed, give the paltry remainder back to "the industry" so they can spend it actually laying fibre and installing equipment.

The government's heart is in the right place but, as usual, their brain is in neutral.

There has to be a better way to fund and organise the delivery of broadband to the rural sector than this simple "tax, waste, and spend" strategy.

Given that Telecom has long argued that the majority of rural customers are loss-makers and no other major telco has stepped in to address this market (because they know it's not profitable) then maybe it's time to just set up a state-run rural fibre company and accept that it's a not a commercial venture but a critical piece of essential infrastructure.

With that in mind, it's probably also time to wake up and realise that the whole broadband network is something far too strategic and essential to allow any private enterprise to have ownership or dominance.

Just look what happened when we sold the railways into private ownership. They were run-down through a lack of maintenance while profits were sucked out and repatriated overseas leaving Kiwis with a train-wreck of a system that eventually had to be bought back for an extortionate amount. The end result was that the NZ taxpayer might as well have just kept the damned thing right from the start and give Toll Holdings a big fat cheque for staying away.

Now there are plenty who would argue that the national broadband infrastructure (including copper/fibre to the home/business) is even more important in the 21st century than the rail network.

So surely, if even an aging right-wing redneck like myself can see the importance of having a strategic asset and piece of critical infrastructure like this kept out of the hands of private industry then it's time we gave that some serious consideration.

Of course I may be jumping the gun a little here, since government hasn't really made it at all clear exactly how this rural connectivity and the NBN will be structured from an ownership perspective -- but given the colour of the current government, you can bet there's a lot of consideration being given to private/corporate ownership.

I'm the first to rally against the bureaucracy, incompetence, bloat and sloth that so often accompanies state-run enterprises but I really think it's worth taking the risk this time.

However, I'm the first to admit that I could be wrong and it could be a case of fryingpans and fires.

Have we done any better in terms of avoiding being gouged by greed when it comes to the corporate giant that is Telecom compared to the SOEs that run so much of our electricity generation, distribution and retail industry?

I think it's time we had a change of mindset and realised that where an asset is owned by the people of NZ, it should be operated on a cost-recovery basis, rather than the "here's another chance to sneak in a covert tax so let's hike the prices" one.

If, as some idiots are claiming, ubiquitous broadband access is the new refrigerated ship this country needs to survive in the 21st century, then let's make sure that it's not only readily available but also affordable.

Just as important as the technology will be the legislation that government puts in place to ensure that we can all afford to purchase this essential service at a reasonable price and to prevent it being seen as another chance to simply feed the corporate or state coffers through the leverage of yet another monopoly position.

What do you think?

Should the rural and NBN networks be privately, publicly or state-owned?

Is it important that, where a natural monopoly like this exists, legislation is enacted to ensure that the public isn't going to (yet again) be rorted by leveraging that monopoly to effectively gouge the consumer or simply introduce a covert form of additional taxation?

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