One person's opinion on funding NZ internet industry development

So, I went to a session on Internet Peering at foocamp, and I heard John Houlker from NZTE talk about peering and “other industry development ideas”. And I ended up writing this little piece of reactionary spit:

What really disturbed me was a dude from New Zealand Trade and Enterprise talking about getting around this by subsidising internet start-ups. First of all he dismissed as nonsense the idea that "content providers shouldn't have to pay to have their content delivered". I agree with his principle, but he's missnig the point somewhat. He then bandied about taxpayer money like "well, maybe if we threw $1bn at subsidising internet startups' net bills, then we could get over the problem".
I don't even think I need to channel Ayn Rand to point out what a preposterously fucking stupid idea that is on all levels. For a start, the money would go straight to Telecom and Telstra's shareholders. They'd jack their prices up to compensate and we'd all end up paying more at the end. It's like saying, maybe we can solve world poverty with a big one-off food drop, but only to pregnant mothers and people younger than 3. Oh, and actually they only get meal vouchers for McDonald's and Burger King.

John Houlker later indicated his summary of the worth of my opinon, and went on to laugh at my ignorance because I didn’t know what jargon like “hot potato routing” meant. Even though it transpired that was the basis of the starting point of my argument.

His first major rebuttal was that if the peering issues are fixed then the money might not just go to Telecom and Telstra. Perhaps I am going to need to start channelling Ayn Rand to explain why throwing money at internet startups is a silly idea. No, I’ll refrain and just say that my guess of the net effect of this is that a whole lot of people would ignore reality in search of worthless dreams, there’s exactly one successful startup that somehow manages to sell to an overseas bidder for the ironic figure of $0.9bn, a scary re-enactment of the dot-com era paid for out of the public purse.

I feel proud, I’m being called a moron because I think that the government throwing $1bn of tax take away to a pipe-dream is a dumb idea. “Stimulate the demand side instead”. Priceless.

That's a reallydumbidea!!!!!
Ayn, are you saying that investment for commercial growth should come from investors who can let their own commercial needs help filter out the workable ideas from the unworkable?
It's dumbdumbdumb!!

Sorry folks, I think that may not actually have been the real Ayn Rand. I’m not an objectivist, but I am fairly clear on the idea that government should be as small as necessary. So let’s not use such crazy speak again, huh?

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