Council should not get into the internet business

Council should not invest $75,000 in a new internet company, said Porirua City Councillor Robert Shaw.

For the first time ever the Porirua City Council will invest in a company and appoint a company director. This is a significant new policy direction for the Council.

The Company is Smarlinx3 which is based in the Hutt Valley and will provide an internet network in competition with other providers.

It is expected PCC will have a 10% share in the company.

The Upper Hutt City Council and the Hutt City Council will also be shareholders and it is expected the focus of the work will be in the Hutt Valley.

The PCC will not be able to decide how its $75,000 is spent or the level of directors' fees.

Council will participate in any dividends issued from profits.

Cr Shaw said "the ratepayers' money should not be used to compete with the private sector in the internet business which is dynamic, unpredictable, and highly competitive".

"The goal of establishing broadband throughout Porirua City is worthwhile, but establishing a company is not the way to go".

"I understand the company intends to help a small number of existing city centre businesses that want greater broadband capacity at cheaper rates" Cr Shaw said.

He said we would be better served by a scheme to subsidize broadband throughout our City.

"I would support the $75,000 going to Business Porirua, so they could improve the situation for all businesses and households."

According to the Ministry of Education, all Porirua schools have broadband access already.

The way to assist everyone is through wireless technology, and the ratepayers' money could be used to support the link between Porirua and Wellington, he suggested.

Since the company Sartlinx3 was brought to the attention of the Porirua City Council, wireless technology has been introduced to provide broadband to the whole of the Hutt Valley.

The cost of a similar facility in Porirua City has been estimated by industry sources to be less than the $75,000 now being spent to establish a company. The main cost is the link back to Wellington.

"The ratepayers' money should be used for basic infrastructure not company overheads" Cr Shaw added.

The appointment of a director will be made at a special meeting of the council next Tuesday 27 April. The public will be excluded from the meeting.

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