KEY POINTS:
The Government's $350 million five-year funding boost to speed up the roll out of faster broadband in yesterday's budget was underwhelming but pragmatic, an analyst says.
The Government's response to National's promise to contribute $1.5 billion to a public-private partnership for a faster fibre-optic network to most homes by 2012 may have disappointed an electorate hungry for more broadband, said IDC NZ analyst Tim Shepheard.
However, the targeted fund aimed at increasing speeds to businesses, universities, schools, hospitals and under-served rural areas supported the Government's newly created competitive and regulatory architecture, Mr Shepheard said.
Operating funding of $325m over five years and $15m capital funding would be distributed through the Broadband Investment Fund. The contestable fund could support a range of possible technology platforms, the Government said.
A further $15m would support another international cable, which Mr Shepheard said would presumably back state-owned enterprise Kordia as it constructed a trans-Tasman link.
"The industry should breathe a sigh of relief," he said.
The budget may not be visionary or transformational. But it was consistent, supporting the regulatory work, investment commitments and new competitive plans of the past two years.
The strategy would not drive New Zealand broadband into the top quartile of OECD countries, meaning further debate was needed about how the country, with its geographic and scale limitations, could support continued fibre deployment, he said.
The National Party was looking for transformational, not incremental, fibre deployment with half government control.
"While this would meet their economic and social objectives, it would also have far-reaching commercial consequences, many of which may be unintended," he said, such as locking the country into one technology path and renationalising the network.
Analyst Paul Budde said the fund was a good start, but roughly $1 billion was needed to take a proper fibre network.
"I would have liked to see a higher amount ... (but) you don't need $1 billion now, it is something that you need over the next five to 10 years."
Private investment could also increase the amount, Mr Budde said.
"The Opposition is promising a little bit more money, and that is obviously more in that ballpark figure."
- NZPA
