Adams hoses down Vodafone UFB plan

UPDATE / March 7: Telecommunications industry types can stop their furious online debates.

Amy Adams has dismissed Vodafone's proposal to scrap the UFB in Wellington and Christchurch.

"Vodafone is obviously pursuing its own commercial interests," the minister tells NBR.

The government will not be stopping the UFB build in any of the candidate areas."

Yesterday, it was reported Vodafone CEO Russell Stanners had written to Crown Fibre Holdings, suggesting the public-private Ultrafast Broadband (UFB) rollout be scrapped in Wellington and Christchurch - the two cities were Vodafone inherited a hybrid coaxial fibre (HFC) network when it bought TelstraClear. The move would save money, and prevent unnecessary overbuild.

TelstraClear was a fierce critic of the UFB in the build up to the project.

Then CEO Allan Freeth called the rollout "network socialism", and said the UFB, backed by $1.35 billion taxpayer cash ($929 million for Chorus), would dampen private sector enthusiasm to invest.

At the time, then ICT Minister Steven Joyce said that expanding existing fibre (or older HFC, in the TelstraClear case) would be a "Hobson's Choice" that always favoured incumbents. Mr Joyce added that carriers had had years to expand fibre, but had done little - particularly in terms of fibre-to-the-premise. Left to their own devices, telcos would - quite sensibly from their commercial perspective - take a long time to expand fibre, Mr Joyce argued. He saw the UFB as a strategic government intervention that would see fibre rolled out sooner, for the greater good of business and the economy.

InternetNZ strongly opposed to Vodafone's plan to scrap the UFB in Wellington, Christchurch

March 6: InternetNZ says it's strongly opposed to Vodafone’s suggestion, made public this morning, to scrap construction of the Ultrafast Broadband (UFB) network in Wellington and Christchurch.

The non-profit, which administers the .nz domain, was responding to the idea that the old hybrid fibre-coaxial cable (HFC) network be used in lieu of new UFB fibre in Wellington and Christchurch, InternetNZ’s CEO, Jordan Carter, says that it’s a retrograde move that makes little sense for anyone other than Vodafone.

Vodafone inherited the HFC network when it bought TelstraClear.

“UFB needs to be rolled out to as much of New Zealand as possible. This suggestion by Vodafone begs the question, why would Kiwis choose to make use of a second-class network when we are already on our way to having a first–class network?," Mr Carter says.

“From the beginning, we’ve been a huge supporter of the UFB. InternetNZ welcomed Prime Minster John Key’s commitment to the plan in April 2008, and even commissioned research on the cost of a fibre build that was released later that year. Our long-term commitment to a fibre future is well established.

InternetNZ expects the Government to stand strong on its position, which has been that the UFB rollout will continue around the country.

“Minister Adams has been spot on with her comments that regardless of Chorus’ financials the UFB build must go on. We back her and the Government to make good on their election pledge of a world-class network for New Zealand,” Mr Carter says.

“It makes good economic sense for Vodafone to seek to make best use of the HFC network it bought when it took over TelstraClear, but replacing the UFB isn’t the way to go.

“While we support Vodafone and others doing some lateral thinking about how to speed up and improve the UFB rollout, this particular suggestion just doesn’t pass muster. The HFC network can deliver decent speeds, but it’s not future proof – the UFB is, and New Zealand needs to stick with it,” Mr Carter says.