In this series of articles, I have long argued that broadband technologies are fundamentally changing our society.  From health and education benefits, through to entertainment and social networking applications, our daily lives are rapidly changing.  More and more people are spending more and more time on-line, both from home and when mobile.   

Technology has developed an inertia of its own that now seems close to being out of control.

1990 was a momentous year for New Zealand. The Commonwealth Games was held in Auckland, we celebrated our sesquicentennial - 150 years since the signing of the Treaty of Waitangi - and a National Government was elected in a landslide victory.  Our population was around 3.4 million and our GDP ranked us at 34th in the OECD scales.  Our 1 cent and 2 cent coins were withdrawn from circulation and Telecom was sold to international buyers for $4.25Bn.

World events were no less momentous.  In 1990, Nelson Mandela was freed after 27 years in prison, the space shuttle Discovery carried the Hubble Space Telescope into orbit and Germany was reunified.

Then, at the end of 1990, a revolution took place that has fundamentally changed the way we live today.  The systems to create the World Wide Web were first defined by the web’s London born inventor and physicist Tim Berners-Lee. 

The promised benefits of the government’s $1.8Bn investment in new fibre-based broadband infrastructure will be limited to health and education providers unless households and businesses take up the new services.  The key to this uptake will be the price of the new services.

Communications Minister Steven Joyce has indicated that retail pricing for fibre services “...should be around 20% above wholesale pricing.”  With gst added, retail prices will then be around 38% higher than wholesale.  

The final aspect of the government’s action plan for the benefits of high speed broadband covers e-Business.  Like e-Development, this is an area that is difficult to quantify.

The business case for the up to $6Bn spend on high speed broadband is “difficult” according to Telecom New Zealand CEO Paul Reynolds.  Which means that for Telecom to make that investment, they need to be certain of a business return on their capital.  The uncertainty factor of that return is whether there will be sufficient demand for connections to the new fibre-based networks.