Report proposes utility expansion for broadband future

The final report Broadband Strategy Options for New Zealand has been prepared by independent consultancy Network Strategies as the second part of a research project initiated in June. It investigates the investment required under differing scenarios to introduce real high-speed broadband with at least 100Mbit/s for domestic users and 1Gbit/s for commercial users for 75% of the population within 10 years.

InternetNZ Executive Director Keith Davidson hails the document as a serious contribution to the debate that will provide valuable input for Government, local body and industry discussion.

"This report provides the first publicly-released comprehensive costing model for a fibre network in New Zealand. It is very timely as the Government prepares its infrastructure plans for the New Year and beyond."

Dr Suella Hansen, Director of Network Strategies, commented that the consulting team had applied a techno-economic modeling approach to investigate in detail different technology, business and market scenarios.

“Public sector participation will be important as our modeling shows that the levels of required investment are beyond that of a commercial operator’s typical payback expectations,” says Hansen.

InternetNZ commissioned Network Strategies to independently investigate workable models for a New Zealand Broadband Infrastructure, applying six principles around fair competition, affordability, timeliness, high-speeds, independence, and avoiding of excessive duplication. Business models considered included lit Fibre-to-the-Premises, Open Access Ducting, unlit Fibre, and utility expansion. An extension of Telecom's cabinetisation rollout using VDSL was also considered.

Davidson says the model of utility expansion hasn't been visible in the ongoing public debate in respect to broadband infrastructure and now must be seriously considered. "The potential cost benefits of using utilities for broadband expansion cannot be ignored."

He says the Government recognises that New Zealand needs a step up in broadband infrastructure in order to compete globally. "Given the current economic environment it is even more crucial that money is spent wisely and in ways that will enhance our competitiveness and address our geographic isolation. We trust this report will assist in the Government's considerations."

For more information contact:

Keith Davidson

Executive Director

InternetNZ

021 377 587

exe.dir@internetnz.net.nz

Dr Suella Hansen

Director

Network Strategies Ltd

09 522 1702

s.hansen@strategies.nzl.com

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Background:

In April 2008, The New Zealand Institute released a discussion document (Delivering on the Broadband Aspiration: A Recommended Pathway to Fibre in New Zealand) containing a considered and costed roadmap as the first part of a proposed project for New Zealand to “develop a fast path to fibre to capture the economic benefits”.

National Party leader John Key’s Leader’s Speech (Achieving a Step Change: Better Broadband for New Zealand) of 22nd April 2008 flagged a political intention to invest “up to $1.5 billion of Crown capital over six years to accelerate the roll-out of a fibre-to-the-home network for New Zealand”.

The previous Government’s Broadband Investment Fund was released as part of the budget on 22 May 2008, pledging $325m of operating spending to support rollout of broadband Internet infrastructure on a contestable, technology-neutral basis. The Fund includes $75m specifically set aside for rural broadband issues.

InternetNZ released its RFP for the Research and Analysis of Broadband Strategy Options for New Zealand at the end of June. Network Strategies was selected from 10 respondents.

Phase One of the report was released in September.

National won the General Election and reaffirmed its commitment to rolling out national broadband infrastructure.