TUANZ endorses Crown Fibre proposal

Labour says National's plan is based on its Broadband Investment Fund

TUANZ is pleased with the tenor of the government’s broadband plan, announced today with a press release from ICT minister Steven Joyce revealing that the government proposes establishing a Crown-owned investment company — Crown Fibre Investment Co — to drive the project.

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.

TUANZ sees little to criticise, says CEO Ernie Newman. It sets out an “open and inclusive” structure which does not prejudge the merit of potential suppliers such as telcos or power companies, he notes.

While the plan leaves architecture options relatively open, it does signal awareness of the need for consistency in that area, he says.All LFCs [regional fibre-deploying companies] will be required to adhere to common technical and commercial standards in key areas such as open access, equivalence and interconnection (in particular, interconnection at neutral points of presence),” says the government’s draft proposal.

Meanwhile, Labour spokesperson for Communications and IT Clare Curran says National has based its policy on Labour’s Broadband Investment Fund (BIF).

Curran says National has shifted from favouring a single, regulated utility model for delivering broadband to one that is regional, open and contestable - like BIF.

After National won power late last year, TUANZ called on it to consider and retain as much of BIF as possible.

Curran says, however, that the Government only requires a dollar from the private sector for every dollar of the public's $1.5 billion investment, where BIF would have required up to double that

“Another important question is: What sort of regulatory framework would underpin the establishment of the new Crown Owned Holding Company given the Commerce Commission has been severely weakened by the resignation of its chair Paula Rebstock?" she asks.

TUANZ, in its National Digital Architecture report, issued last year, said there was a critical need for “strong government leadership” in setting the architectural parameters of the network, which it compared to building regulations or the Road Code.

While not quite that firm, the government proposals “go some way to acknowledging the need for a common architecture and signals there’s work to be done in that area,” Newman says.

The proposal concentrates on providing dark-fibre infrastructure. “Having done that, they’ll get out of the way” and leaves the services implemented to the free market, he says.

“Is this too hands-off? I don’t think so,” says Newman. There are enough serious business application providers – Xero being an obvious example – just waiting for the broadband infrastructure to stimulate their market, he says.

The proposal notes: “The government is confident that the development of an ultra-fast broadband network will provide New Zealanders with the base infrastructure that will support advanced broadband services, including high-speed, real-time internet connections to the world”.

“Over time, this will facilitate and encourage new enterprise and innovation and spur increased productivity.

“It is important to note that the potential uses for new general purpose technology are almost never fully realised at the time of deploying that infrastructure. This is particularly the case for broadband infrastructure, and in the telecommunications industry more generally where the pace of change and innovation is rapid.”

One of TUANZ’s few misgivings about the proposal is that the target of 75% of the population covered by broadband within 10 years is beginning to look unambitious.

“We hope that in the medium term the target can be re-visited with a view to increasing the percentage of people with access, and shortening the time line,” TUANZ’s prepared statement says.

“This will be of particular benefit to people in rural areas, who are the group with the most to gain from the services that this technology will unlock”, the TUANZ statement says.

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