This is huge news for New Zealand, and I hope they can push it through.
NZ really is hampered by their external infrastructure. I lived in Wellington for 2 years. Offshore speeds were horribly slow, domestic speeds better. Downloading a 1GB demo from Xbox Live Marketplace took a day on the fastest DSL connection I could get (plus burnt through a large chunk of my download cap that month). It takes me less than an hour in California.
The university was charging students per MB, which I hope is a policy that has since been rescinded.
The cruel irony is that New Zealand's brightest new economy is largely on the net; some of their programmers and designers are the best you'll find anywhere.