Faster broadband for New Zealand

Last updated 11:56 31/03/2009

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The Government is promising its $3 billion broadband plan will deliver "quantum faster" internet speeds for Kiwis.

Communications and Information Technology Minister Steven Joyce said a new Crown-owned company would work with private sector partners as a key part of its plan to deliver ultra-fast broadband to 75 per cent of New Zealanders' homes, workplaces and places of study within ten years.

The Government has committed up to $1.5 billion of taxpayers' money for the roll-out and expects that to be at least matched by the private sector.

Prime Minister John Key said the initiative would give internet speeds of up to 100 megabits per second – "for most people, speeds which are quantum faster than anything they currently have".

"They will be able to watch TV comfortably and easily over their computer screens, they will be able to run businesses from home. . ."

The move would bring New Zealand into the 21st century, enabling it to compete with countries such as Korea, Singapore and Hong Kong.

"We are a small country, we are a long way away and if we want to connect with the world in the cheapest, most efficient way possible, we have to have world-class broadband capability."

Twenty-five towns and cities would be covered by the initiative.

Those in areas outside the 25 identified would eventually get better services but that would be in the second phase of the initiative. They could expect faster broadband but would not have the fibre enabling the ultra-fast broadband, Mr Joyce said.

Partners would be selected based on:

* the amount of additional fibre coverage being proposed;

* the proposed capital structure;

* commercial viability of the proposal;

* consistency with Government objectives;

* and the company's track record.

Selection would be based on the amount of additional fibre coverage being proposed, the proposed capital structure, commercial viability of the proposal, consistency with government objectives and the potential partner's track-record.

The 25 centres, in order of population, are: Auckland, Christchurch, Wellington, Hamilton, Napier and Hastings, Dunedin, Tauranga, Palmerston North and Fielding, New Plymouth and Hawera, Kapiti and Levin, Nelson, Rotorua, Whangarei, Invercargill, Wanganui, Gisborne, Cambridge and Te Awamutu, Blenheim, Timaru, Taupo, Masterton, Whakatane, Ashburton, Tokoroa, and Oamaru.

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The Crown-owned company would be called Crown Fibre Investment Co, or CFIC, and would focus on providing the cables needed to enable private companies to connect to it to provide the service.

A key element is "dark fibre" - fibre optic cable in the ground or on poles but which is not yet active. The fibre becomes operational by adding optical electronics at each end, to provide a service to households and businesses.

"Internet service providers and other telecommunications providers can purchase access to dark fibre, add their own electronics and then use it to provide a retail service," Mr Joyce said.

"The government investment will be in fibre networks that will operate only at the wholesale level, selling 'dark fibre'-based services enabling telecommunications providers to design and specify their own downstream services.

"This approach will ensure that all decisions regarding active network technology options are left to private sector investors."

Mr Joyce said the model would ensure all telecommunications companies could use the fibre.

"This model aims to provide government investment on favourable terms, while minimising government involvement in commercial operations which we believe the private sector is better positioned to direct."

The proposal is open to consultation. Submissions close on April 27.

- Dominion Post, NZPA, and BusinessDay

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