Belated go-ahead for urban broadband projects

The five applicants have been approved for government funding - but with cutbacks

The five urban Broadband Challenge applicants knocked back by the government last month have all now been approved for government funding — but with cutbacks.

According to the Ministry of Economic Development each applicant got 75% of the amount requested.

“This will certainly mean deploying less than we hoped we might,” says David Haynes, managing director of the Hutt Valley’s Smartlinx3 consortium, which has received $2.3 million in funding.

“But you can hardly call it a cut as we didn’t know what we were going to get. It’s dangerous to expect anything.”

Even the amount requested was dependent on how much the shareholders of the projects could come up with, he says, since the Broadband Challenge grant is intended to “match” funds from other sources.

“We could have had a much more ambitious project if we’d found more money from our side,” says Haynes.

Smartlinx3 is designed to provide broadband and WiMax capabilities to Hutt City, Upper Hutt and Porirua. The consortium has not yet decided where the original deployment will be reduced, says Haynes. The first task is to finalise a funding agreement with the government. The schedule for deployment will depend on completion of that stage, he says.

The envisaged urban fibre networks will be “open access”, to encourage competitive and innovative services, and should provide two-way data transfer rates of at least 1Gbit/s, according to a statement from communications minister David Cunliffe.

Auckland’s North Shore City has been the biggest winner from the $16.3 million funding pool, receiving $4.6 million for a joint project with power company Vector to extend the latter’s fibre network through to schools and city council offices and other facilities.

The idea of concentrating on schools is to spark demand from the rising generation, says North Shore City Council spokesman Roger Matthews.

Bandwidth growth is in a “market failure” situation, where the providers don’t provide because there is no demand and vice-versa. “If we had a Gbit/s in our homes and offices most of us wouldn’t know what to do with it. Put it in the schools and the kids will get used to working with it. Then, when they get on their home computers, they’ll scream blue murder and Telecom will respond.”

There are more visible needs at council office level and in the libraries, as well as the schools, he says. The council, for example, has a GIS system, with bulky data such as aerial photographs, which is very slow to transmit from one site to another. The schools, too, have been trying to access that data for route-planning projects.

“It’s slow and it blows their data caps,” says Matthews. Schools are also talking about centralising other information resources in an online library.

The increased capacity will make Vector’s network a better bet for business, and provide backhaul that will make wi-fi hotspots in libraries and, in due course, other public areas more feasible.

Wellington’s Citylink/Cafenet model appeals, says Matthews. North Shore may franchise a similar operation “or bring Citylink in”.

The funding shortfall will be made up by trimming plans or seeking additional funding from other sources, says Matthews. But his first step, he says, is to get approval from the board of Vector, through a series of meetings starting late last week.

Canterbury Development Corporation received $4.2 million for a metropolitan network in Christchurch; Hamilton City Council was granted $3.2 million and Nelson and Marlborough $1.8 million.

Auckland City failed in its joint bid, with the regional council, for Broadband Challenge cash. It was notified earlier this year that it had not fulfilled all the necessary criteria and was unable to modify its plans in time as negotiation among six councils was required, says policy analyst Lise Eriksen.

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