TelstraClear boss: Telecom is best pick for Crown fibre

TelstraClear chief executive Allan Freeth was in his usual maverick form at the Tuanz Telecommunications Day conference in Wellington today.Weighing in on the government's $1.5 billion ultrafast broadband (UFB) project, the telco boss said:"To us, the present proposal looks likely to play out in a way that's reminiscent of the Tragedy of the Commons.

TelstraClear chief executive Allan Freeth was in his usual maverick form at the Tuanz Telecommunications Day conference in Wellington today.

Weighing in on the government’s $1.5 billion ultrafast broadband (UFB) project, the telco boss said:

"To us, the present proposal looks likely to play out in a way that’s reminiscent of the Tragedy of the Commons.

“I personally believe we should choose the player or the team with the best chance of maximising the ‘commons’ - that is, the limited resource - for the best outcome.

“In this case, that’s probably Chorus.

“Let’s find a way for tem [Chorus] to do so, while regulating for open access and equivalence.”

Afterward, Dr Freeth told NBR it didn’t matter to TelstraClear (now operationally merged with its parent, Telstra) whether Chorus (Telecom’s networking division) was spun off, or not.

Crown fibre bidder Axia violently objects to telcos with wholesale and retail operations, like Telecom, TelstraClear and Vodafone, having a foot in both camps (read Canadians: why we should get Kiwi Crown fibre).

In his speech, Dr Freeth criticised the restriction on telcos with both wholesale and retail divisions being restricted from majority control in a Crown-partnered Local Fibre Company: “I am at a loss as to why you would set up a system for provincial teams to play the Rugby World Cup, having excluded the All Blacks because they are involved in retailing”.

Overbuild: Freeth v. Joyce
Overall, however, Dr Freeth’s perfect Crown fibre model remains no Crown fibre - or at least not in the form of the government’s urban-centred ultrafast broadband (UFB) project.

The TelstraClear boss would have poured all available funds into rural broadband (where the government does have a parallel project), so that dairy farmers in the Waikato, Otago and Southland could better connect to the world.

The market will look after urban areas, said Dr Freeth, who reiterated his stance that the government’s UFB initiative represents “network socialism” and that his company (which operates fibre networks in Wellington and Christchurch) and others will compete vigorously against any Crown fibre contenders.

There is a risk of overbuild, and incentives for private investment being dampened.

Communications Minister Steven Joyce rebutted the overbuild point during his speech to the conference, later in the morning.

"If you remove the risk of overbuild then you're left with a Hobson’s Choice: the company who has fibre (already) in any given street is the company you have to work with," Mr Joyce said.

However, Dr Freeth acknowledged that “you can’t fight City Hall” and the reality was that UFB was going ahead.

Given that, New Zealand needs “a player with the best chance of succeeding,” Dr Freeth told NBR. “For me, that’s Chorus.”

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