A decade ago things were different - or were they?

, posted: 11-Sep-2006 20:10

MauriceMy good friend David Slack posted a very interesting link to a Wired story from 1995 written by Bob Johnstone, in the blog entry about Shinzo Abe.

It spans seven pages, but there's some real gold in the story, so it's worth reading the lot. 1995 was the year I arrived in New Zealand with family, and it's fascinating to read Johnstone's article which speaks of the aftermath of the massive socio-economic experiment that happened here, and to compare it with things a decade later.

There's a Labour government in place, but have things changed an awful lot? I would argue no, it's pretty much the same as ten years ago.

Johnstone starts off with:

For Maurice Williamson, cutting code in C++ ranks just below sex in terms of pure pleasure. Such enthusiasm for the lingua franca of engineering programming would be unremarkable if Williamson were a mere propeller head, but the 44-year-old Eric Clapton look-alike happens to be a government minister.

Eric Clapton will probably have blackballed Johnstone for that comment, but I didn't know that Maurice was such an, errm, enthusiastic coder. C++ too.

The former minister was then as now a champion of de-regulation, to the point that:

Williamson will freely tell you that Saddam Hussein could run a radio station in New Zealand if he wished.

Luckily for New Zealand, Saddam didn't get into the radio broadcasting business here. Williamson is joined in his deregulatory zeal by Telecom's then CEO, Roderick Deane:

Here's some advice for Newt [Gingrich] and Company from Roderick Deane, CEO of Telecom New Zealand, on what to do with the FCC: "Put a bomb under it, blow it up," Deane says. "Regulations slow the pace of competition."

Telecom was the focus of Johnstone's story, as it was seen as the poster boy of the deregulatory experiment. Loved by no-one for its inefficent and poor service, some ninety per cent of people still objected to Telecom being sold off to Bell Atlantic and Ameritech, who became the foreign owners of the telco.

After being sold off, Telecom cut the 24,500 work force by two-thirds and some US$4.5 billion was invested in upgrading the nationwide network. That did the trick: Telecom has been doing pretty well in New Zealand ever since.

So what went wrong then? Well, Telecom clearly knew that it needed to keep investing in new technology to keep the revenues rolling in. It built a mobile phone network, and... ran fibre-to-the-kerb trials in Auckland. In Pakuranga, where a certain Maurice Williamson happened to be the constituency MP:

Clark's initial responsibility is running two fiber-to-the-curb trials in Auckland. (One just happens to be in Pakuranga, Maurice Williamson's yuppie constituency, the other in a somewhat less upmarket district represented by the previous administration's communications minister. Telecom insists the choice of locations was a coincidence.)

At present, the service delivers 22 channels of video, some basic and some delivered on a pay-per-day basis to 600 homes.

This is presumably the First Media HFC service that Telecom was working on, but which never took off for some reason.

At the time, only 60,000 to 100,000 New Zealanders were online according to the Ministry of Commerce, and Telecom was eyeing up a potentially huge market wanting to get on 'Net.

Telecom did have competition for the customers though. Clear was one such competitor, and it fought Telecom in court over many years to get an interconnection deal. Neither Williamson nor the government at the time intervened despite Clear's asking it to do so, to resolve the dispute.

In the mobile area, BellSouth was introducing a GSM-based network, spending around US$325 million on it.

Keith Davis, CEO of BellSouth, is quoted by Johnstone as saying:
It is a position heartily endorsed by Keith Davis, Makin's counterpart at BellSouth. "This is not a deregulated environment," Davis complains grimly. "This is an environment where the power of regulation has been passed to the incumbent." BellSouth has found itself at the mercy of the dominant player - Telecom.

Jack Matthews, then head of Saturn or Kiwi Cable as it was called echoed those sentiments.

Roderick Deane knew in 1995 already that competition in the local loop was necessary:
On the interconnect issue in particular, he insists: "The only way people will believe that the deregulation model is successful is if there is competition in local access."

Rich Naylor of Citylink and John Houlker of Waikato University are mentioned by Johnstone as NZ's fibre-optic networking pioneers. What Houlker said in 1995 still stands, I reckon:

"I used to think that having a lot of fiber up and down the country was a big deal," he concludes. "But in fact, it's irrelevant." What you need to make the whole thing work, he explains, is high-speed access to the local loop. "But no one was willing to pay for the cost of laying the high-speed links into the sites."

There you have it. Over a decade of missed opportunities. I should mention the 2001 Telecommunications Inquiry led by Hugh Fletcher which led to... nothing at all. Well, perhaps that's unfair, because it did create the present, impotent regime monitored by the Commerce Commission and which led to the government's new regulatory package earlier this year.

This bit:
Williamson has carried his love of technology into politics. He relishes his evangelical role as Godzone's first Minister of Information Technology. "I've been a believer in the power of information from Day One," he says. As proof, he delights in showing visitors the database-handling routines he designed for his Wellington office. Files store lists of his constituents and their interests so that, come election time, he can mail merge customized form letters to canvass their votes. When Bill Gates visited New Zealand before the release of Word 6.0, Williamson gave him some ideas for improvements to the software's mail-merge functions. Williamson was gratified to note that many of his suggestions seem to have been implemented. "Of course, it was probably just coincidence," he admits.

... is quite remarkable too. Do the good Pakurangans know that Maurice Williamson keeps a database of their interests like this?

Other related posts:
Wikileaks keeps publishing despite Assange's arrest
Letter to Simon Power, minister of commerce re: Copyright (Infringing File Sharing) Amendment Bill
NZ government could create new last-mile monopoly with UFB

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