Q: What happens to investment when a government threatens to nationalise infrastructure?
A: Investment in infrastructure falls.
If you don't believe me, and you wish to ignore the mountains of international evidence supporting that answer, then ask yourself why Jenny Gibbs and the residents of Remuera, Howick and Paritai Drive are finding it difficult to get broadband. The answer in this morning's Herald is that Telecom is not investing sufficiently in infrastructure in those areas -- and why the hell should it, when that investment is subject to being taken out from under the investors by government edict. As Telstra Australia's CEO Sol Trujillo said in similar circumstances, threatening not to lay the fibre allowing an Australia-wide broadband network: “My duty is to our shareholders — including 1.6m ordinary Australians. I will only invest where I can earn an economic return.”
Unbundling Telecom's property will increase broadband penetration? Don't believe a word of it.
LINK: She's a multi-millionaire and still can't get broadband - NZ Herald
Telstra shrugs? - Not PC (May, 2006)
RELATED: Telecom, Politics-NZ