The government has set aside a bundle of money for regional broadband initiatives. What do businesses and development agencies intend to do with their share?
On budget night in May, the government announced that a sum of somewhere between $20 million and $99 million was to be set aside for the development of broadband in the regions. A specific sum wasn’t named, for fear bidders wouldn’t put in bids below that amount.
Schools were the initial target for the funds, which will come from the ministries of education and economic development, but the wider community was the ultimate goal.
Under the plan, the country will be divided into 14 regions. Telecommunications providers, or consortia of providers and community interests, will bid for the contract in each region.
The budget move was welcomed by many, but for some areas it will be a rising tailwind rather than a standing start. Regional broadband projects are already up and running in Otago, Southland, Northland and several other provinces, and all except Otago received funding in a regional broadband pilot scheme by the same two ministries last year.
IT minister Paul Swain says most of the pilots will be superseded by tenders received under the budget scheme. However, the Northland pilot, which has taken the form of the “virtual telco” model, is likely to be a bidder for that region’s contract, he says. “I’m certain the Far North will be putting in a tender.”
Chris Matthews, spokesman for the Far North Development Trust which has been coordinating the project, says a request for proposals closed on July 1 and the trust is currently going through an evaluation process. The winner of the tender is to be announced around the time this article goes to press.
The RFP was for customer premises equipment and wireless local loop gear. The service will use VoIP (voice over internet protocol) to provide voice and data services over the 3.5GHz frequency.
“We have a memorandum of understanding with BCL and we’re in the market for a retail service provider. One option is to form our own service, or we could partner with an existing service provider.” A report prepared for the trust last year identified the “virtual telco” model as the best for the region.
While the Far North Development Trust has been the driving force in the early stages of the project, “it’s now a Northland-wide thing”, Matthews says. A group of Northland schools are already being served, via the government’s Digital Opportunities project, by Farnet, a network linking the schools and providing a minimum of 128kbit/s and maximum of 512Kbit/s via frame relay.
Fly by wire
Northland and most of the other pilots are utilising wireless technology, but in Otago the province’s community trust convinced Telecom last year to take the risk of upgrading a dozen of the region’s exchanges to ADSL by underwriting the carrier’s risks in upgrading in an area where it would normally be uneconomic to do so.
Former Otago Community Trust chairman Clive Matthewson says the scheme has gone well from the trust’s point of view. “In some places, notably Oamaru, Wanaka and Alexandra, it has been very successful, with a big take-up, but in others, such as Kurow and Palmerston, there has been little or no take-up except at the high schools.”
Getting broadband to the schools in those towns has been worth it, he says, even though it has meant part of the underwriting fee the trust paid to Telecom — which across all the upgraded exchanges was $236,000 — will be called in.
One who is benefiting from broadband is Tim Pierce, who owns Wanaka United Travel.
Pierce says broadband is all it’s cracked up to be. “It’s great and we no longer feel we’re a hick little country town, because we’re hooked up the same way people in the main centres are. We no longer feel disadvantaged.”
Having JetStream at work has improved his business’ operation and at home, it’s now a pleasure to browse the net, instead of an annoyance, he says. “I’ve got two teenage children and they come home and get on the net and they don’t tie up the phone line anymore.”
Matthewson says if the trust hadn’t done the underwriting deal with Telecom, 61% of Otago businesses and 47% of the province’s residences would have ADSL. “But since it was done, 91% of businesses can get it and 74% of residences.” The remaining 9% of businesses and 26% of residences unable to utilise Telecom’s JetStream or JetStream Starter are in rural areas more than 7km from an exchange.
Taranaki has taken a leaf out of Otago’s book, adopting a similar model, with the New Plymouth, South Taranaki and Stratford District Councils underwriting — to the tune of $536,000 — Telecom’s upgrade of 14 rural Taranaki exchanges to DSL capability.
Four exchanges are already DSL-enabled, says Anthony Stening, systems analyst with Taranaki development organisation Venture Taranaki.
Under the terms of the deal, Telecom is required to have the 14 exchanges DSL-enabled within 90 days of July 1, the date on which the South Taranaki and Stratford councils joined the New Plymouth District Council in signing.
A 15th exchange is expected to go live after that, Stening says, “but there’s more work needed on it”.
The DSL-enabled exchanges will deliver broadband to 83% of Taranaki, he says, while the remaining 17%, encompassing much countryside, will be serviced by a wireless deal.
Horses for courses
In Southland the pilot involved several projects, including wireless transmission via BCL towers and Vodafone’s network to deliver data at up to 128kbit/s to Waiau College (which has since become Tuatapere Community College) in the remote Southland town of Tuatapere.
The connection allows Waiau students to take part in courses offered via Cantatech, a South Island online learning programme.
Students from schools where a subject isn’t taught can take that subject by an internet connection, with the teacher preparing material online and direct communication via a two-way speakerphone.
However, Southland’s broadband extends to the whole province.
In May, Venture Southland, the Southland District Council’s economic and community development agency, put out a request for proposals for a “whole of community telecommunications service”.
The RFP closed last month and Venture Southland project manager Steve Canny says the response has been positive, with eight proposals, involving 13 potential partners, received.
“There are a range of service providers, from organisations offering highly intelligent network solutions to a more basic level of service.”
Among the conditions of the RFP is that bidders provide a minimum of 2Mbit/s up and downstream and that customers be able to set the quality standards they need. “They will determine the bandwidth they need, whether it’s always-on or periodic.
“We’ve asked service providers to identify what they can do, how they can do it, what technology they’ll deploy, what the costs are, what scalability the technology has and what kind of support services they’ll offer.”
Interoperability with the PSTN is another requirement, Canny says “and we’re asking them to identify the barriers to provision at the fringe of the network”.
VoIP capability is another request, as is provision of services to schools. Farmers and other groups with special needs have also been identified, Canny says.
The RFP was concluded shortly after the government’s budget and Canny says there is “a good fit” between what the RFP requires and what the ministries of education and economic development want.
On the North Island’s East Coast, things have been less successful.
Nick Wood, consultant with Wellington telecommunications consultancy Consultel, prepared a report for the East Coast’s Tairawhiti Development Task Force, with funding from the pilot scheme.
The East Coast, which extends from Wairoa in the south to East Cape in the north, is the only New Zealand region without a fibre connection to the national backbone network.
“Digital microwave radio provides the links — everywhere else in New Zealand has at least one fibre-optic cable connecting the distribution network to the backbone.”
Neither Telecom nor “anyone else” has plans to install any fibre for that purpose, he says.
“It’d be a multimillion-dollar project, and under conventional business case analysis it doesn’t stack up.”
That leaves wireless as the only option for bringing broadband to the region, he says.
“Telecom has a digital microwave backbone all the way up the coast, but north of Gisborne it has limited capacity — if you want to start adding things to it, you’re looking at upgrading the network.”
BCL also has a microwave radio link, but it only goes as far as Gisborne, Wood says.
“I believe they have some spare capacity, but what it all comes down to is that if high speed internet or other broadband services are to be deployed around the region, the first thing to do would be to upgrade the Telecom link or extend the BCL one.”
“Apparently, there are a lot of good reasons why extending the BCL link would be the better option.”
Wood estimates getting wireless to “most places” on the coast would be “a $2.2 million” project, but that still wouldn’t get broadband to “the real backcountry valleys — to achieve that, you’d need to double that figure.”
Further down the eastern North Island, in the Wairarapa, Jill Greathead, coordinator of the Wairarapa Smart Region broadband project, told Computerworld earlier this month the Wairarapa is ready to do a request for information.
At the time of writing, Greathead was seeking an answer on whether the Wairarapa will be able to use the government budget money as equity for its project, but was unsure what the government’s position was.
One thing she is sure of is that different regions need to work together, even if they tackle the question of broadband access separately.
“I believe [in regions] looking at different options, but if we communicate, we’ll all come across the right solution.”
A planned South Waikato pilot “didn’t proceed, because of administrative issues”, Swain says.
However, the South Waikato District Council is now considering a joint venture with local company Rural Networks to bring broadband to the region.