This article appears in the August 12th issue of the Franklin County News

Like it or not, Telecom's proposal for full separation of its lines company Chorus, represents the best way of delivering a national fibre network in a cost-effective way. There is a but however.

This 'best way' seems not to be this government's view and nor was it the previous Labour government's view when they forced operational separation on Telecom back in 2008. The operational separation of Telecom's lines, wholesale and retail arms resulted in an agreement that, amongst other things, saw Telecom undertake to provide a Fibre To The Node (FTTN) network. This was to go to all towns and cities with more than 500 telephone lines and so reach 80% of New Zealanders with broadband speeds of better than 5Mbps. The last mile connection from the nodes to businesses, farms and homes would be by ADSL2+ or VDSL technologies over existing copper telephone wires.

Rural areas did not figure until Telecom gave an undertaking to “...explore partnership options with other parties, including councils and other funders to extend coverage to … remote and rural areas.” Telecom recognises that the business case to reach that final 20% of people is very challenging. This undertaking gives choice and self-determination to our local communities and is an option that Rural Connect has discussed with Telecom Wholesale and with Chorus.

The new government was elected on the back of a promise for a modern Fibre To The Premises (FTTP) network and action was quickly taken to implement the $1.5Bn Ultrafast Broadband (UFB) initiative for urban areas. But again, not much consideration was given to broadband in rural areas until the $252M Rural Broadband Initiative (RBI) was launched earlier this year.

The RBI promises to deliver high speed broadband to 97% of all rural addresses within six years - much more quickly than we may have dreamed of. But for some, six years is simply too long. The lure of high speed broadband has raised expectations by many rural people who need it now. But also, and more importantly, to bridge the funding gap in the business case, the RBI initiative gives money to local fibre companies. Understandably, Telecom want a piece of that funding and this wanting can only result in delays.

Actually what Telecom want is all of the funding in both the UFB and RBI initiatives, which is what their proposal to completely separate Chorus from Telecom is partly about. Not to be unkind to Telecom, their separation proposal is also about seeking to avoid competition to their core business being established on the back of taxpayers' money whilst they are regulated to spend investors' money in the Fibre To The Node program that will deliver a lesser standard of service.

Which brings me back to the but of the opening paragraph. Whilst the government consider Telecom's separation proposal, the country waits. Whether Chorus should be established as a monopoly provider of a fibre cable network, or whether multiple competing Local Fibre Companies should provide the fibre network, the waiting means that rural people will miss out. More rural businesses and residents will re-locate to the towns and cities because their businesses suffer setbacks in the waiting.

So many people love to hate telecom. But the fact is that Telecom, as a public company in a competitive market, are behaving in an entirely predictable manner. If blame for delays in providing high speed broadband needs to be attributed, it should be laid at the feet of successive governments with differing ideologies.

Until the government sorts out the mess, it is Telecom that has offered a solution for rural communities.

Communities with a need for high speed broadband are able to build and submit a business case for their own high speed broadband. That business case can be used in any of three ways: submit it to Telecom Wholesale to advance a FTTN installation, submit it to the competing Local Fibre Company to advance a FTTP, or to raise funding to do the installation themselves.

For each of the rural communities that Rural Connect has worked with, each of these solutions is being explored. They each start with the building of a business case, and the time horizon in which the business case can be applied is limited. If Telecom win their full separation gambit, the current inertia to instal a fibre network will be lost.

For Pukekawa, a community meeting is scheduled for Monday 16^th August. The state of the copper cable network in this area suggests a fibre to the premises (FTTP) solution and because of the likelihood of delays to the RBI consequent on Telecom's structural separation proposal, the Pukekawa community may well have to implement this as a community installation.

For Ararimu, a community meeting is scheduled for Monday 23^rd August. This is an area with a school still using dial up, a significant demand from businesses requiring high speed broadband and a local community with many people wanting broadband. The area, which is within 5km of a Telecom fibre cable, is seen as a very desirable area for a Local Fibre Company to establish themselves as a credible competitor to Telecom. Whether this local fibre company is a competitor or a community partnership working with Telecom remains to be seen.

Another part of the separation agreement provided for 'unbundling' of previously monopoly services so that Telecom Wholesale could offer retail services to other ISPs that compete directly with Telecom Retail. This is a murky part of the separation agreement that has resulted in cries of anti-competitive behaviour against Telecom. Next week, Rural Connect will have a look at whether Telecom are using their network to to foil competition.