skip to main content

Ultra Fast Broadband's nationwide installation has been touted as productivity-enhancing factor - but the jury's still out, especially in the New Zealand case apparently.

Victoria University's NZ Institute for the Study of Competition and Regulation reckons it is far from clear how the government's $1.5 billion UFB investment, will supposedly lead to economic benefits in the order of $2.7b - $4.4b a year.

The institute's summary of its study is that "The tyranny of distance still applies."

The study itself and a powerpoint presentation of some of those figures can be found here.

"Most claims [about UFB's benefits] lack rigorous empirical support, instead being based upon extrapolations from extremely limited qualitative and case-study analyses or even subjective 'guesses' proffered by 'industry experts' with (quite likely) vested interests in a network of a particular typology being deployed in a specific economy," the ISCR says.

"There's a social return to better broadband, but it's far, far lower than the hype suggests. Most of the numbers thrown about are from shills and zealots. Honest academics looking for the effects find only modest ones."

At the presentation, Mark Obren made the points that systems such as Telstra already has in Wellington have already given us most of the productivity benefits we'll achieve.

New Zealand will still suffer from latency issues, from having to access more than 90% of our internet data from overseas.

In other words, having high speed broadband to the home won't make that much difference when there's still going to be time lags getting information from overseas. People won't really notice the difference.

The point was also made that Korea and Japan have already had UFB to their homes and businesses for the past five years. The only real observed 'advantage' or increase in productivity was an increase in gaming in Korea.

The case for Ultra Fast Broadband's still to be justified

+ Text Size -
Original generation time 1.2783 seconds.