MED report says rural broadband a goer

A new report on the country's telecommunications infrastructure makes for interesting reading, especially in light of Telecom's claim that it will need $100 million to upgrade its rural network to 9.6kbit/s speed.

A new report on the country’s telecommunications infrastructure makes for interesting reading, especially in light of Telecom’s claim that it will need $100 million to upgrade its rural network to 9.6kbit/s speed.

The report, written by Wellington-based consultancy firm Amos Aked Swift for the Ministry of Economic Development, pays particular attention to the rural sector. Towns in provincial New Zealand are broken down into rural towns, with fewer than 800 inhabitants, and small urban towns, with between 800 and 9000. There are 250 altogether, along with other communities that are too small to be included but are definitely considered rural. “It is estimated that 50% [about 125 towns] are already serviced with sufficient basic telecommunications infrastructure in the backbone network to provide broadband access capacity to the switch site, with little specific extra capital investment needed in the network.” Another 25% are considered close enough to a network to cost only $1000 per township to make them broadband-capable. The last 25% are considered highly costly at $10,000 plus per town. Costs for provision from the switch to the customer vary, says the report, from $1000 to $5000 per customer location. The report defines broadband as faster than 128kbit/s, which is really quite slow — the OECD report on broadband excludes 128kbit/s lines — but is still a lot faster than the cellphone kind of speed Telecom is talking about. What this tells me is that the myth of rural New Zealand being too remote for broadband is just that — a myth. Telecom is talking about upgrading the network for 95% of New Zealanders to 14.4kbit/s, yet this report would imply that even remote New Zealanders can and should be capable of receiving broadband internet access for peanuts. Yes, it would cost money to upgrade. No one is disputing that, but looking at the figures from Federated Farmers and other groups, farmers are crying out for such access speeds. Sixty percent of farmers own a PC; that’s a huge potential market, especially when you consider that farmers are actually making money this year. Someone should be getting in there and demanding a piece of that action. Apparently, someone is. Fonterra online arm Fencepost has put out a request for proposals for a rural telco network (see Fencepost net excites interest) to deliver at least 64kbit/s speeds to its members and has received at least five serious replies. This is a good thing because, frankly, without farmers New Zealand is little more than a tourist destination with a few hungry city-dwellers. Our manufacturing sector has never really taken off and unless we get busy with other sectors, like education, to fill the gap we’ll continue to be reliant on primary producers for our national wealth — such as it is. The report also shows up the current boom in fibre cable-laying in the country’s main CBDs as something of a lie. Yes, the business communities in the central cities are crying out for bandwidth, but let’s not forget about the rest of the country. With TelstraClear’s formation it seems unlikely that its rollout of fibre will continue at the pace it once claimed, if at all. More likely we will see TC leasing space on Telecom’s network at wholesale rates. It will strengthen its focus on the business community and probably leave the consumer market to its own devices. If this is the case, I feel it’s a short-term view. The home market is just as important as the business market, albeit a lower-value model: we residential users whine too much and use valuable helpdesk and support services to complain about the internet not downloading properly and we want it all for $30 a month. I can understand a cash-strapped telco turning away from such a low-margin customer in favour of the so-called “high value” businesses. The oversupply in that market is going to lead to tantrums and tears, however, and I think we’ll see some bandwidth providers getting very hot under the collar before it’s all sorted out. They would be better served, I think, looking further afield at those high-value but distant customers in the outlying regions. The report can be found here. Brislen is IDGNet’s reporter. Send letters for publication in Computerworld to Computerworld Letters.

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