Telecom offers fast-link choice

Telecom chief executive Paul Reynolds said schools and hospitals were central to both broadband proposals. Photo / Hawke's Bay Today

Telecom is proposing two options for achieving the Government's ultra-fast broadband goals.

At the end of March, Communications and Technology Minister Steven Joyce announced public-private partnerships would be established to deliver ultra-fast broadband to 75 per cent of New Zealanders within 10 years.

The Government would establish a Crown-owned investment company, Crown Fibre Investment Co (CFIC), to handle its investment.

CFIC would invest alongside private sector co-investors in regional fibre companies that would deploy and provide access to fibre optic network infrastructure in the 25 towns and cities covered by the initiative.

The broadband roll-out is a National election commitment and it has set aside up to $1.5 billion to achieve it.

Interested parties had until Monday to make submissions on the proposal.

Telecom said one of its options would involve co-ordinating Government investment with Telecom's current fibre network and future fibre plans, dramatically extending the reach of fibre optics throughout the country. That option would deliver the maximum amount of fibre.

The alternative option was to create a national network of ducts, owned by a Crown fibre network company, which all network and service providers would have open access to. That asset would build on New Zealand's existing ducting and fibre assets.

Prices would be set so that Telecom would not make a profit from the government component of any investment - all the value would be returned straight to the country.

Telecom said that central to both its proposals was the ability to connect fibre to 2000 schools and all hospitals in the North and South Island within two years of work starting, with the remaining 600 schools connected six months later.

Telecom chief executive Paul Reynolds said schools would be able to form local broadband hubs, increasing the opportunity of rolling out ultra-fast broadband into rural New Zealand.

Under Telecom's proposals, the 75 per cent fibre coverage area would include Queenstown, Greymouth, Rangiora, Gore and Waiheke Island.

"Telecom's proposals are a combination of building on the 23,500km of fibre optic cable already in the ground and integrating the Government's $1.5 billion investment with Telecom's existing plans to extend the reach of fibre to more and more New Zealanders," Reynolds said.

Paul Winton at Temple Investment who has done work for the NZ Institute on broadband said Telecom's plan may be difficult to sell politically. "I understand the rationale behind it but I question whether the Government would be willing to play that game."
Among other submissions on the Government proposal is one from the New Zealand Regional Fibre Group, made up of lines companies and local fibre firms. Members include Vector, Aurora, Northpower, Waikato-based WEL Networks, Unison, PowerNet, Christchurch City Networks, Network Tasman and Velocity Networks.

Vector chief executive Simon Mackenzie said the group's view was that the most effective means of achieving the Government's vision was through a nationally aligned, regionally based model based on transparent, open access principles.

Vodafone said while it supported the broadband vision, issues still needed to be addressed including:

The final investment, which according to some research could be as high as $6 billion.

As an investor in both retail and wholesale operations Vodafone said it was concerned about restrictions proposed around eligibility and equity participation as being too limited to enable effective investment.

The local fibre company concept posed significant issues for any investor with the loss of scale negatively impacting the business case.

- NZPA