Joyce walks tightrope with broadband strategy

Crown Fibre Investment Company to invest in 25 regional fibre companies

Communications minister Steven Joyce admits that government will be “walking a bit of a tightrope” in spending $1.5b on a national broadband network. While anxious not to be seen to line the pockets of the large telcos, it must at the same time avoid duplicating network capacity that those companies (predominantly Telecom) have already put in place.

“We’re trying to achieve a step-change in broadband services” while at the same time not compromising existing services, he says. That will require some delicate decision-making. The proposal released [on April 1] is the first step in that process, with public responses to that as the next step, he says.

A two-level structure is contemplated, with a Crown Fibre Investment Company (CFIC) putting money into as many as 25 Local Fibre Companies (LFCs) as joint ventures with the private sector. That term, Joyce makes clear, does not exclude local authorities, many of whom already have some knowledge of planning and financing broadband.

The network will initially be formed around New Zealand’s 25 largest towns, but the same RFC might put up a convincing proposal to handle more than one region, resulting in fewer than 25 regional companies, Joyce says.

A regional structure will encourage smaller players to come into the picture, “harnessing the expertise and enthusiasm that’s in regional areas” and boosting competitiveness, he says.

Dominance by one telco in most regions, as happened with the previous government’s Probe scheme, is a risk, Joyce acknowledges, but the structure of the scheme seeks to minimise that danger by stipulating that companies with a retail presence in the market be limited in terms of their voting power on LFC boards. The requirement that the network be open to access by all service providers should also reduce the project’s attraction to companies simply wishing to dominate, he says.

At the same time, the CFIC will not strive unrealistically to establish diversity in providers at the cost of effectiveness and efficiency in any region, Joyce says.

The CIFC and the first few of the LFCs should be in place by the end of the year, he says.

The town-based plan has come under predictable attack from rural lobbies such as Federated Farmers for neglecting the economic engine of the rural sector. Joyce has told Computerworld and other media that fibre to every farm is hardly practical and that the major challenge for country areas is providing backhaul.

“There might be a different solution there,” he says, promising further information on rural plans in “the next several weeks.”

“We’ve got some more thoughts around rural,” he says, in response to a question on the apparent stinginess of the $48m assigned to the 25% of the country not tackled in the first part of the plan. An extension of TSO to even out the costs of broadband between town and country is a possibility, he says, cautioning us at the same time not to “over-read” the reference in the proposal document to TSO reform alongside rural plans.

In answer to TUANZ’s contention that broadband to 75% of the population in 10 years does not seem very ambitious any more, Joyce talks of “walking before we can run”, but emphasises that in his view the plan still represents a “big audacious goal”.

It’s important, he says, that the public sector, particularly health and education get theirown houses in order on the broadband front. This will both provide an example to private companies and individuals on the value of broadband and in practical terms, make it a more attractive economic proposition to run fibre to some areas.

As for the proposition that fibre to the home will simply make us a nation of entertainment junkies, Joyce points to the practical business applications, from mapping products through commercial software-as-a service to the huge potential of teleworking (there are some social questions to be tackled there, he acknowledges) all demanding increasing bandwidth.

The minister discounts any favouring by government of providers who will encourage business-like, productivity-enhancing uses of broadband rather than leisure-focussed applications.

“That would be a bit too dictatorial,” he says.

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Tags Steven JoyceNetworking & Telecomms IDrfcbroadband fibrecfc

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