Back in the early 1900’s, an economic return on investment did not forestall the development of a nation-wide electricity network. And the societal benefits of that public investment are clear today.  
On the 4th August, our public electricity network turns 128 years old. Over that timespan, our forebears developed an asset base on which our prosperity and wellbeing is based.

Last week’s headlines shouting out “Chorus victorious in Commerce Commission copper pricing decision”, denies the lessons of the history of our electricity networks. That history is instructive in highlighting how our modern broadband network might have developed under a different ideology.

Reefton was the first town in the southern hemisphere to have a public electricity supply. The electricity was supplied from a water turbine on the Inangahua River that ran for over 60 years until the town was connected to the National Grid in 1949.

The development of the National Grid and a network of hydro-electric plants around the country, was driven by government programs. The Minister of Public Works, Gordon Coates, said in 1922 “The Government is most anxious that the people should get their electricity at as cheap a rate as possible.”

Compare that to the Minister of Communications, Amy Adams, saying in 2014 that rural broadband is not an economic proposition and therefore, it will not be paid for.   Perversely, Chorus’s victory is a consequence of the Minister’s intervention.  The ‘win’ ensures revenues to subsidise urban people to connect to ultra-fast fibre broadband.

Is the comparison a fair one? To me, both networks are a public-good utility, both have the potential to improve individual prosperity, community resilience and business productivity.

That older ideology, of government programs for equitable public benefit, resulted in the rapid growth of industrial and private electricity demand.

Our rural areas were particular beneficiaries – extending the electrical grid with the intention of creating demand, did modernise the countryside.

That newer ideology, of promoting only programs that provide economic returns to corporates, is marginalising our rural communities.

The different ideology arrived in 1987 when a Labour government corporatised the NZ Electricity Department to become a State Owned Enterprise – the Electricity Corporation of NZ. That changed our society from having access to the second cheapest electricity in the world, to one priced at the world average, despite around 75% of it coming from renewable sources with sunk costs.

A National Government continued the commoditisation process with the 1992 Energy Companies Act. This replaced Electric Power Boards and Municipal Electricity Departments with commercial companies, responsible for the distribution and retailing of electricity in local markets.

countiespowerOur very own Counties Power replaced the Franklin Electric Power Board in 1993 as a consequence of this legislation.

Unlike many communities, the idea of selling public assets for private profits was resisted in Franklin with ownership of Counties Power being retained by a community trust.

In 1993, the shares of Counties Power were valued at $30.8 million. Today, those same shares are valued at over $200 million in addition to over $150 million having been distributed within our community.

Compare this outcome to Wellington’s Capital Power which was sold off to a Canadian company for $190 million. Over the following 14 years, those assets were sold on four times at ever-increasing profit margins to private owners.

Back in the early 1900’s, an economic return on investment did not forestall the development of a nation-wide electricity network. And the societal benefits of that public investment are clear today.

Were those old principles applied to the UFB and RBI programs, we would see an equitable broadband network and not the rural/urban digital divide being created by our government.