Govt proposes model for broadband investment

The government to establish a Crown-owned investment company, says Steven Joyce

Interested parties will have till April 27 to respond to the government’s proposed model for investment in fast broadband to 75% of New Zealand homes over the next decade.

In a press release today, ICT minister Steven Joyce revealed that the government was proposing to establish a Crown-owned investment company — Crown Fibre Investment Co — to drive its investment.

Under the proposal, CFIC will invest alongside private sector co-investors in regional fibre companies that will deploy and provide access to fibre optic network infrastructure in the 25 towns and cities covered by the initiative.

Joyce says CFIC will operate an open, transparent and contestable process to select local partners with selection based on:

· The amount of additional fibre coverage being proposed

· The proposed capital structure

· Commercial viability of the proposal

· Consistency with government objectives

· Track record of the partner

He says the open infrastructure model will ensure all telecommunications companies have the option of using 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 government has committed up to $1.5 billion for the roll out and expects that to be at least matched by private sector investment.

“This is a big investment both in terms of the money committed and the returns it will bring. It’s essential that we get it right the first time,” he says.

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