KEY POINTS:
A $350 million five-year funding boost to speed the roll out of faster broadband is among a package of infrastructure measures announced in today's Budget.
In recent times there has been a clamour for quicker broadband speeds and National has promised to contribute $1.5 billion to a public-private partnership designed to see a faster fibre-optic network delivered to most New Zealand homes by 2012.
Communications Minister David Cunliffe today unveiled the Government's alternative - a targeted fund aimed at increasing speeds to businesses, universities, schools, hospitals and under-served rural areas.
Operating funding of $325 million over five years and $15 million capital funding in the next year would be distributed through the Broadband Investment Fund, which would also be used to improve New Zealand's international internet connections.
Cunliffe said the $340 million contestable fund was designed to maximise competition and "give the best possible leverage for the taxpayer's investment".
Of the figure, $250 million would go to urban areas, $75 million to rural, and $15 million to international connectivity.
"Accelerating New Zealand on to a plan for widespread deployment of fibre or equivalent fast bandwidth, to the home, and cheaper and faster broadband for all consumers will bring substantial economic gains that will transform New Zealand's economy and society," he said.
Another $9.4 million in new spending relating to the Government's Digital Strategy was also announced.
Cunliffe said, in addition to the new money, $165 million was already going into improved connectivity in the health, education and state service sectors over the next five years and another $35 million into other existing initiatives - bringing the total promised spend to about $550 million.
Finance Minister Michael Cullen said a key part of the government fund was that it was mainly operating funding meaning it could be "technology neutral", supporting a range of possible platforms, unlike National's capital plan.
The Government has already separated Telecom into separate divisions in a bid to increase competition in the sector and wrung a commitment from it for a "fibre to node" network that would improve speeds to at least 80 per cent of homes by 2012.
Cunliffe hinted at further spending in five years' time.
"The broadband pathway does not end here," he said, "Budget 2008 represents a down-payment on our ten year vision for a fast broadband future. It is reasonable to expect further significant investment during the second five year period."
Telecommunications Users Association (TUANZ) head Ernie Newman this afternoon admitted to feeling "a bit underwhelmed".
"The amount of money is pretty sparse and I guess I was anticipating more," Newman wrote on his Downstream blog.
He said administration processes were slow and complex.
"By the time the consultation, evaluation and analysis is done, hamlet by hamlet, will the amount of money left to dig trenches through the streets of Waitotara cut the mustard?" he asked.
"I know Budgets are necessarily factual and boring, but I did hope to see a bold vision statement about the outcome," wrote Newman. "The nearest I could find was a high level goal of "widespread fibre to the home within a decade."
- NZPA / NZ HERALD STAFF
