Hard News by Russell Brown


The Internet in New Zealand

It's been an interesting month or two for the internet in New Zealand; both grand sums of money and big ideas are at stake. For the former, there's the government's $300 million promise for rural broadband – strikingly dismissed as insufficient by Federated Farmers chief Conor English – alongside a $1.5 billion election commitment to "super-fast" broadband, whose details remain elusive.

The role of Telecom in these plans has taken on a fairly stark focus. The complaint by JP Morgan analyst Laurent Horrut that Telecom is becoming "a worst-case scenario worldwide for the effect of government regulation on an incumbent telco" may well be correct. This is, let's be clear, a function of the failure to do telecommunications right 20 years ago, but we're now obliged to consider the cost of fixing it. Many New Zealanders, many superannuation and retirement funds, have a stake in Telecom's fortunes. ()Why, I can even see some merit in what Rodney Hide says!

And yet, only Theresa Gattung would deny the positive impact of regulation on the consumer market. Telecom's competitors may bitch righteously about the cabinetisation project, but speeds from our local cabinet reach 10Mbit/s at times. I've been able to switch both my voice and internet services between providers, and back, almost painlessly.

And there's more coming. Vector, a power company, has currently running a substantial campaign across both social and traditional advertising media aimed not at us, but at attracting the attention of those who hold the government's broadband purse strings.

And now, actual enterprise is promising to fill the big, international hole in the government's vision. If the Pacific Fibre founders can raise what they need to build a new trans-Pacific cable based on a model of plenty, things will change.

And then there are the big ideas …

Chris Barton's Herald Review feature on the Department of Internal Affairs child pornography filter provides a useful summary of opposing views. I can see both sides of the argument.

On one hand, the filter is in line with the DIA's established, nuanced approach to dangerous content – while by comparison, Australia's politicians and regulators continue to blunder through the minefield, as ever – and on the other, it crosses the line at which governments begin to pre-empt access to the internet.

And PublicACTA has been assembled by Internet NZ to expose the issues that big copyright owners – and certain governments – would prefer to be aired only in secret.


By coincidence, a clutch of reports landed last week to shed light on what it is we are doing online. The most prodigious of these is The World Internet Project's The Internet in New Zealand 2009.

More New Zealanders say they consider the internet an important source of information than say the same of television – two thirds of us "compared with half who so rate television, newspapers or other people."

Our usage increasingly embraces contribution: half of us post online messages, images or videos, and one in 10 earn income from such activities.

(The latest split from Nielsen Media Research offers another look at the same phenomenon -- and is directly relevant to this site. A higher proportion of Public Address readers – 54.6% -- contributed to "a message board, online forum or blog" in the past four weeks than readers of any other website in the country. Nicely done, all of you.)

Eighty three per cent of us are internet users. Eighty three per cent of home users enjoy broadband access, and 93% of users use the Internet at home, 68% at work, and 24% at school or university. About 40% of all users spend at least 10 hours a week on the Internet. Only 6% of us access the internet on a mobile phone for between one and four hours a week. Half of all users have been using the internet for fewer than 10 years, and 14% have been online for more 15 years. Telecom Xtra is the ISP of 52% of us, while the market share of, say Orcon, remains tiny.

When we're there, about half of us use social networking services – and of those who do, 75% use Facebook on 75%, and 18% Bebo.

Nearly 60% of us make at least one online purchase per month, reflecting a change that is accelerating in some industries. Amplifier reported last week that is customers are opting more for a download purchase of the new Hollie Smith album than buying a CD by a factor of five or six. For her last album, the proportions were roughly the reverse.

Vey few of us say the internet has decreased our contact with others, while 60% report increased contact with friends and family. But we still use SMS texting to make contact with each other far more often than we use email. More than a quarter of us say the internet has decreased our face to face contact with family.

The trend in previous reports for more of us to report that the internet has increased our contact with people in our ethnic group than decreased it continues. Nearly two thirds of Maori and Pasifika speakers " believe that the Internet is contributing to keeping their languages alive."

Money still matters:

Income level does not factor into the number of hours spent online at home or at school. However, there is a relationship between household income and weekly hours spent online at work; 33% of those earning $100,000 or more spend ten plus hours per week online at work, while 95% of those earning less than $25k never go online at work.

Overall, 64% of us say that the arrival of the internet has improved our workplace performance.

And 60% of us access government or council information and services online. This figure ought to be drummed into people who propose forcible disconnection from the internet as a response to copyright infringement. Being on the network is part of being a citizen. About 45% of us believe the government should spend money to ensure universal access.

Meanwhile, the Advertising Standards Authority's report on advertising turnover for 2009 saw the internet's share of the overall national advertising spend break 10% for the first time. In doing so, the spend on interactive advertising grew more than 10% against an overall industry decline of 12%. Interactive advertising is now equal to radio and magazines in scale, but still well short of television.


With so much to discuss, it seemed a good time for Media7 to focus on where we are with the internet in New Zealand. And so I'm pleased to say that this week, we'll be discussing the above with Paul Reynolds (that's McGovern Paul, not Telecom Paul), former Vodafone marketing chief and now Pacific Fibre founder Mark Rushworth, and Computerworld editor Rob O'Neill.

If you'd like to join us for the recording on Wednesday, we'll need you at TVNZ by about 5pm. Click reply and let me know if you want to come along. Meanwhile, allow me to invite you to discuss it all here.

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