Questions surround National NZ’s new ambitious broadband policy
The telecom infrastructure policy of the just elected New Zealand National Party appears to be fairly much in line with what it pledged back in April of this year when it was in opposition. It has promised up to NZ$1.5 billion over ten years, to build a fibre-to-the-home (FttH) network that reaches 75% of the New Zealand population. It has been still undecided as to when the network build will begin, but National estimates that it will take six years to reach its coverage target, and would like to supplement the network with satellite and mobile access where appropriate. National’s ICT spokesman and former Communications Minister of the nineties, Maurice Williamson, appears likely to return to take his former position once again. It is still unclear as to whether government legislation, needing the support of ACT and other minority parties would be needed to proceed with the fibre plan.
On paper the new government’s policy looks promising, with substantially more government investment committed than the former Labour government’s pledge of $500 million over the first five years and another $500 million in the following five years. A $340 million Labour Broadband Investment Fund was quickly oversubscribed with 36 successful applicants in 13 urban and 22 rural areas. The former government’s high speed network was dependant on Telecom rolling out fibre for its cabinetisation plan to support ADSL2+ and VDSL2 by both Telecom and its competitors via Local Loop Unbundling (LLU), to give 80% of Internet users connection speeds of 20Mb/s or higher.
It still however remains to be seen whether National will be able to pull of its ambitious nationwide network plan. There is no doubt that FttH should be the end goal of any country’s infrastructure policy, however BuddeComm questions whether National has fully thought through the all the steps that will be needed to implement it. For starters, a key question is how an FttH rollout would impact emerging LLU providers like Vodafone and Orcon. New Zealand is now just beginning to see healthy completion in the broadband access market, after years of lagging the majority of the developed world, and what New Zealand does not want is to see is its competitive environment reverting back to one that is once again far too dominated by the incumbent. Telecom is well on the way to extending its fibre network across most of the country and appears to be the only telecoms operator capable of supporting a new national network as proposed by the new government. Thus it would be the most obvious candidate for the majority of the new funding. New Zealand only has to look back across the Tasman and view the mess that Australia’s national infrastructure policy is currently in, with the future of its National Broadband Network still very unclear, to see the type of pitfalls that could lie ahead.
Although the former Labour government’s five year plan may have been a long way short of reaching FttH, through enforcing the operational separation of Telecom, it did successfully lay the ground work for a more level playing field that is now starting to provide more open access to Telecom’s network. Already Vodafone and Orcon are on the way with rolling out DSLAMs, which will further spur on Telecom to accelerate its own ADSL2+ rollout.
What is now required from the new government is a much more detailed plan that realistically details all the steps required to reach its end goal. A plan is needed that not only ensures a high speed national network is built, but also ensures a clear path is established that will ensure healthy competition can continue to grow in New Zealand.
Phil Harpur
Senior Analyst, BuddeComm
See also: BuddeComm New Zealand reports
