Broadband digest

A digest of submissions to the government's broadband plan

Over the weekend, the Ministry of Economic Development published submissions received on the government's plan to deliver fibre to 75% of New Zealand premises. Here's a digest and links to some of those.

NZICT Group: NZICT emphasise cloud computing and shared services. Government should stimulate demand. It warns that broadband is not a panacea: "The other [areas in need of development] are: applications, people (skills), process and attitude.”

A step change is possible for schools, it says, and its members will supply applications. It recommends further development of media, graphics, gaming and 3D applications, and the increasing use of telepresence as a productivity tool.

"New Zealand also has the opportunity to be a global showcase for cloud computing and shared services, with locally developed applications servicing the public and private sectors," it says.

"NZICT is willing to assist the MED in a facilitator role to actively engage existing infrastructure owners and related parties, to ensure unnecessary duplication infrastructure investment is avoided."

It argues that international links need boosting and recommends R&D grants to developers to use New Zealand as a test base.

Smartlinx: Local Fibre Companies (LFCs) may not be profitable, Smartlinx says, but will become cashflow positive early and the asset will always be there.

Differential equity rights need to be clarified early, it says, to provide incentives for private companies to come in. That is, government will accept a lower return on investment to give private partners more.

It asks for a "clear commitment as to the minimum concessionary rights the Crown Fibre investment Company (CFIC) will be prepared to accept".

It says overbuild can be avoided by seeking access to existing fibre, however, existing owners may not be willing to provide access.

SmartLinx also talks of the risk to the value of Telecom’s copper investment and separation undertaking to build fibre further out. Telecom could mitigate this by investing in the new plan as it proposes to do, but on its own terms.

Smartlinx, like some other submitters, says it sells Layer 2 Ethernet services, but does not and cannot differentiate between wholesale and retail. Therefore the “no retail presence” stipulation for LFCs is unrealistic.

North Shore City Council: The council says it has experience of rolling out broadband but uptake is disappointing. It says this is due to high onward bandwidth and ISP costs and insufficient expertise for schools to use broadband in any different way from existing ADSL services.

It also cites a "level of sunk investment in existing systems that schools are unwilling to move away from".

The council says there has not been enough attention to the uncertainties in demand. Also, the high cost of international capacity and peering are not addressed. It suggests the timetable for the rollout should be modified to allow for piloting to assess demand.

Enterprise North Canterbury: ENC says Christchurch is considered as one area, while the "multi-centredness" of Auckland and Wellington are noted.

It says not enough attention is being given to existing providers.

"It is simply wrong for the Broadband Investment Initiative to ignore the collaboration that is occurring in the Greater Christchurch area to meet future infrastructure needs, and which is now being translated into specific planning designations by the local authorities involved."

ENC also says its region is growing so it's not enough to rely on 2006 census figures.

It says Transpower's infrastructure is being ignored. This is a massive governmment-owned resource that should be exploited.

ENC also note the lack of attention being given to rural areas, the “backbone of the economy”. It says it identified telemetry opportunites under the previous government's BIF scheme.

"The Rural Broadband proposals should be released forthwith,” it says.

Network Waitaki (an electricity lines company): Network Waitaki says it can build fibre but lacks expertise in commercial complexities.

"Our preferred process would be for the CFIC to select a preferred partner for each location and then work with it to develop a local solution. We favour a cooperative approach over a competitive approach."

It is also concerned that ownership of power poles might be compromised and questions the affordability of service.

FttH Council Asia Pacific: Says it is concerned that only 75% of premises are targeted.

It says well-regarded studies show "all successful government supported FttH initiatives have comprehensively addressed issues well beyond just infrastructure."

The council says decisions should be based on a solid understanding of future industry structure, competition, regulation, and application requirements and adds it is the government’s role to clarify these at the outset.

It notes that Australia seems to have been held back through the unintended consequences of regulation favouring static efficiencies of greater utilisation of the incumbent’s copper network at the expense of the dynamic efficiencies of infrastructure investment.

Although its government has recently announced a new A$43b FttH policy initiative, substantially more needs to be done before its goals will be achieved. The government has yet to put to bed the "myriad uncertainties" that have held its industry back.

Other suggested measures include:

• a nationally coordinated deployment plan,

• a clear industry development policy,

• a well defined competition framework that delivers fair and predictable outcomes,


• appropriate incentives to support all industries that stand to benefit from the

planned FTTH deployment.

Priority users should be FttH-enabled in a manner which assures that every nearby

home and business has a straightforward and low-incremental-cost path to being

physically FttH-enabled.

It says incentives are needed for providers to evolve their networks in line with doubling demand for speed every 18-24 months.

"Maximise the potential for niche application developers to reach the entire New Zealand marketplace and maximise consumer choice in application providers by ensuring that wholesale bitstream access services are available to every consumer connected to the FTTH network," it says.

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