Government outlines rural telecommunications plan

5Mbit/s set as target for communities

Cabinet has signed off on proposals for the roll out of high speed broadband in rural areas and the reform of the Telecommunications Service Obligations (TSO).

Communications and Information Technology Minister Steven Joyce says in a statement that the plans will lead to a major step-change in rural broadband.

Joyce confrims that 97 percent of rural households will have access to broadband services of at least 5Mbit/s; with the remainder reaching at least 1Mbit/s. A big part of the plan will be connecting fibre directly to rural schools, one of the most concentrated areas of broadband demand, Joyce says.

“The government’s rural broadband initiative will help deliver fibre connections to 97 percent of schools across the country and 99.7 percent of students. The remaining most remote schools will achieve speeds of at least 10Mbit/s.

Joyce says that the only significant change to the rural broadband initiative was to up-weight the importance of the community connection objectives, relative to the schools part of the initiative.

“Some submitters were concerned that too much emphasis was being placed on school connectivity relative to the rest of the community. We have changed that in the final plan to be clear that while the schools will be the original catalyst to get fibre to the community; achieving at least 5Mbit/s across the communities is the primary aim of the exercise.”

IDC telecommunications analyst Rosalie Nelson says the plan is broadly consistent with what was expected out of the TUANZ Rural Broadband Conference last year. She says government is effectively providing the backhaul to rural communities to allow other providers to deliver services.

She says schools are the hub of the rollout, but from there cellsites, many of which are within a kilometre of schools in rural areas, can be enabled with high speed services such as LTE. Other forms of delivery, such as WiMax and wi-fi, can also be supported.

The rural broadband initiative will be developed separately but alongside the government’s ultra-fast broadband initiative in urban areas.

The project is expected to cost around $300 million, and it is being funded by a $48 million direct government grant, plus $252 million from a new Telecommunications Development Levy being set up as part of the accompanying TSO reforms, which were also confirmed by cabinet yesterday.

“I want to stress that changes to the TSO levy would not affect the TSO obligation, which includes free local calls. The idea is not even on the table. Likewise, there are no plans to further loosen the rules around foreign ownership of Telecom,” says Mr Joyce.

The government will undertake a two-phase Rural Broadband Initiative tender process. It expects to call for expression of interest during April and anticipates allocating funding before the end of the year.