Doubts raised over rural broadband

Government may not have earmarked enough for rural services, sector says

The telco sector and rural lobby groups doubt the government has earmarked enough investment to build critical rural broadband infrastructure.

The government received 67 submissions on its rural broadband initiative, and many of the submissions from key stakeholders were critical about the government's plan.

Under the plan, the government aims to deliver ultra-fast broadband via fibre to 93 percent of rural schools, with speeds of at least 100 megabits per second, with the remaining 7 per cent to access broadband with speeds of least 10 megabits per second.

Over 80 per cent of rural households would have access to broadband at 5mps, with the rest to get broadband at speeds of at least 1mps.

The government has proposed this be funded via a direct government grant of $48 million, along with $252m from the Telecommunications Development Levy, which taxes telcos.

This funding model was separate to the government's $1.5 billion seed-funding of an ultra-fast broadband fibre network to 85 per cent of the population.

Telecom's submission said more detailed analysis was needed as it reckoned at least $500m to $600m would be required to deliver the government's aims.

The Tourism Industry Association of New Zealand agreed with Telecom, saying $300m won't provide the level of infrastructure needed in a quick timeframe for rural customers

Internet NZ said in a submission that urban consumers would gain the benefit from $1.5b of public investment, while 25 percent of consumers in rural areas only received $48m of public funds.

This was a substantially lower per-capital investment than the urban consumer, said Internet NZ. "The logic for this difference is not clear".

Internet NZ would prefer that the government funded rural broadband development from general taxes.

This view was backed by Vodafone who questioned why the government wanted to tax the information and communications technology sector.

"General taxation would be more efficient...and reflect the fact this is a government initiative, rather than an industry one," said Vodafone.

Federated Farmers said it understood that the Government expected to make a return from its $1.5 billion urban fibre plan and it didn't expect a return from its $48 million rural grant.

But farmers paid taxes like everyone else and had a right to expect that any government backed infrastructure rollout does not exclude them, the group said.|

The Telecommunications Users Association of New Zealand said the government's proposal placed excessive emphasis on schools, while dubbing the mainstream user population as "spill over."

Wiring up schools and hoping for "spill over" has proven not to work in New Zealand, it said.

The New Zealand Regional Fibre Group said if a local fibre company wanted to expand outside the 75 per cent coverage area, it only needed to provision to 5mps, merely by upgrading existing copper lines.

"This approach clearly favours Telecom to be the default rural broadband provider since it already owns the copper-based last mile. But this approach severely short-changes rural New Zealand: it consigns them to a world in which they will never be free of Telecom as a vertically integrated monopoly, and it means they must put up with dramatically slower speeds than their counterparts in the city."

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