Thursday, September 10, 2009

Subsidising entertainment and business

That's what Steven Joyce is advocating with new "targets for rural broadband".

Apparently if you locate your business and home where the square metre of land is cheap, where there is no traffic congestion, where you don't pay for parking, where it is quiet and the air is clean, and you have ample space to do, well most things, you don't have enough advantages over major cities. No. You should get communication networks akin to them, without paying the full cost.

Given rural local road networks are already effectively subsidised by urban ratepayers and state highway users, it's not surprising of course. Fair? No.

"Over 80% of rural households will have access to broadband with speeds of at least 5Mbps, with the remainder to achieve speeds of at least 1Mbps"

You might ask why this is special? If it is for business purposes, I'd expect it to be a cost of business, and so treated as such. After all, businesses in cities have costs that rural businesses don't have (far more expensive land, parking for example), but do not expect those to be cross subsidised by rural businesses.

If it is for private use then why again? High speed internet is fun for looking at pictures, watching Youtube, listening to internet radio, downloading music, multiplayer games or whatever. So why should rural folk, again with far bigger opportunities for a wide range of outdoor activities, get these subsidised?

"Mr Joyce says he expects the rural policy to cost around $300 million". That's just over $210 per household in tax across the country. This is to reach 25% of the population, so if that is pro-rata that means the subsidised households get $857 each from this scheme. Take away the $210 per household and it is $647 each.

You'd think if it was THAT special, they might all pay that.

It's not though. You see, I bet they'd rather spend that on something else. I bet you'd rather pay that for something else too.

3 comments:

WH said...

I think you should qualify your statement "Given rural local road networks are already effectively subsidised by urban ratepayers and state highway users, it's not surprising of course. Fair? No" this should be some rural local roads, because as discussed under your NLTP columns there is also rural regions that are effectively subsidising the major metros.

Need to be careful about applying universality and one solution, sometimes there are multiple solutions because there are multiple (and different) problems across NZ's regions.

Sally said...

Excellent summation WH.

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