Nats may extend UFB rollout

19:23, Aug 24 2014

The National Party could pull a rabbit out of the hat when it announces its ICT policy in the next week or two by extending its flagship $3.5 billion ultrafast broadband initiative.

The ultrafast broadband (UFB) initiative is progressing satisfactorily despite the controversies and ill-temper surrounding the financial squeeze on telecommunications network company Chorus.

More than half a million homes, businesses and schools now have access to UFB, and a respectable 39,500 have signed up to a service. But the current plan is to roll out the network to only 33 cities and towns, covering about 75 per cent of the population.

That was always a rather arbitrary cutoff, designed to cap taxpayers' contribution to the scheme at $1.35b, and it has thrown up some anomalies.

On the West Coast, for example, Greymouth is getting UFB, but Hokitika and Westport aren't, even though the cost of deployment, per premise, in the three towns probably wouldn't be that different.

As UFB take-up increases and more services are delivered over the network, the inequities have the potential to distort some regional economies. Part of the solution to high houses prices should be to make it more attractive for people to live in smaller centres.


The policy parallel is perhaps with Freeview. The Government originally planned 75 per cent of television viewers would get access to the terrestrial FreeviewHD broadcast service, which offers channels in HD, with the rest of the country having to make do with the inferior standard-definition satellite Freeview service that also has less channels.

But in 2010, when it was clear FreeviewHD was a success, the Government elected to increase its coverage to 87 per cent of the population.

The way FreeviewHD and UFB are delivered are very different; one involves building radio towers and the other digging trenches. But an increase in UFB coverage to 80 to 90 per cent of the population might be possible without greatly increasing the per-capita cost of the scheme.

It is not just newly included smaller centres that could expect to benefit from the investment. The larger the UFB network, the more services are likely to be delivered to everyone over it.

Outside the footprint of the UFB initiative, broadband infrastructure has been improving as a result of the $285m Rural Broadband Initiative (RBI), but that scheme, which is funded by an industry levy, doesn't have quite the same promise.

About 230,000 rural homes and businesses now have access to faster fixed-line copper broadband and/or a fixed-wireless broadband service delivered by Vodafone using its cellphone towers and rooftop antennas as a result of that scheme.

Chorus reported that as of a year ago, about 35,000 of them had taken advantage of better copper broadband.

The Business, Innovation and Employment Ministry revealed the number of customers connected to Vodafone's wireless service for the first time this month, saying in response to an Official Information Act request that 6064 fixed-wireless RBI connections had been sold by the company and its resellers by the end of June.

The figure is not a total embarrassment; otherwise the ministry would no doubt have continued to hide it, but it is not stellar.

Drawbacks of the wireless service include a low standard data traffic cap of 15 gigabytes, which can only be boosted to 30Gb to 65Gb, depending on the reseller, before steep charges of $30 a gigabyte kick in if you go over your limit.

Only fixed-line broadband services can deliver the data caps and low lag that households need to enjoy online games and internet television at a price that most will be prepared to pay.

Communications Minister Amy Adams appeared to hint at the possibility of extending the UFB initiative in March, when she said the Government was looking at how it could fill in gaps left by the UFB initiative and RBI. She noted the latter "as good as it is, is not the same as ultrafast broadband".

Sunday Star Times