The Don Brash-led Taskforce 2025 team has many radical recommendations for closing the gap with Australia, but spending more on broadband is not one of them.

The taskforce compares the government’s ultrafast broadband project to the Think Big follies of the Muldoon era.

The government plans to spend $1.5 billion over the next 10 years - with private partners chipping in at least that amount - to deliver fibre optic cable to homes, schools and hospitals.

“The Taskforce has no way of knowing whether economic returns would, in fact, exist for investment of this sort undertaken at this stage. But it is not clear that government officials or ministers do either,” the report says.

“In that respect, it is not obvious what marks out this initiative from, say, some of the numerous government commercial investment projects undertaken over the decades, including, for example, the Think Big projects.”

Don-gone it
Newly appointed NZX director Rod Drury - speaking as chief executive of his software company, Xero - was furious at the finding.

“I actually met with Don during the [report] process and I’m shocked that he could be in 180-degree disagreement with almost everybody else,” Mr Drury told NBR.

The Xero boss said he’d hoped better broadband would have been flagged as one of the key ways that New Zealand could close the gap with Australia.

“We’re the furtherest country away from anywhere else. This is our chance t connect to the global economy; to close the gap with Australia and everyone else.”

Thought we'd moved past this
Mr Drury was annoyed that “there are still senior people with influence don’t understand how the digital world is changing. We don’t have a national technology plan and we’re losing the opportunity to invest money the right way”.

Australia is ... wrong
In Australia - the country that we are, after all, trying to close the gap on - the government is spending $A43 billion (that is, more per citizen) on a similar public-private fibre-to-the-premise roll-out.

Dr Brash is unimpressed.

“We recognise that the Australian government is also spending considerable amounts of money on an initiative like this, but we have read and heard serious critiques of the quality of the decision-making on that project too,” says his report.

“If good economic returns actually do exist, in prospect, it is not obvious why private providers, individually or collectively, would not invest to capture them, rather than sharing the benefits with the Crown.”

A long-time Act supporter, Mr Drury has long maintained that broadband is as vital to national infrastructure as roading, and that the government should step in to push things a long if the short-term interests of a single private telecommunications company are hindering business growth as a whole.

As such, he is in vigorous opposition to Taskforce 20205 report’s finding that

Doesn't get it
Telecommunications Users Association boss Ernie Newman also met with Dr Brash during the review process. Mr Newman is currently in Europe. But before he left, the chief executive’s hopes weren’t high. The Taskforce 2025 head just “didn’t seem to get it”.

Today, Mr Newman told NBR, "The economic and social benefits arising from general purpose technologies such as railroads, electricity and broadband are always impossible to quantify precisely in advance.

"This is because the usages are not developed until after the technologies themselves are available to the masses. Historically, implementation of such technologies has depended on visionary people seeing the potential and being willing to make a leap of faith.

"Reticulation of electricity for example, would never have come about if society had waited until somebody first invented the microwave oven, air conditioner and electric toothbrush."

A taskforce falling in the forest
But although Mr Drury is annoyed by Dr Brash’s report, he can take comfort from the fact that prime minister John Key has already flagged that he will ignore most of its recommendations.

And communications minister Steven Joyce has already ignored the findings of two major reports that have promoted copper over fibre.

Mr Joyce has said that only 100Mbit/s fibre connections can keep New Zealand internationally competitive, and provide services that he would have appreciated when a business owner.

The minister said he appreciated that telecommunications companies were acting in the interests of their shareholders. But left to their own devices, they would take too long to upgrade beyond slower copper networks, harming New Zealand’s business performance overall.

"Ultra fast broadband requires a leap of faith," said Mr Newman. "Fortunately today's political leaders have the vision to make such a bold move."