This is scary!  But it is also an early indicator of where broadband-enabled technology will take us over the next 5 or so years.  So what if you do not have Fibre to the Premises?  Comment on this scary vision of our near future!.

The government's announcement that the Rural Broadband Initiative will be available only to national bidders is bad news for our rural communities.

First is that the national provider aspect is a clear indicator that Telecom Chorus, after separation, will win the RBI tenders and hence receive the $300M funding from the Rural Broadband initiative.  This means that our rural areas will get a fibre-to-the-node network rather than the future-proofed fibre-to-the-premises alternative.  We will get this at Chorus' deemed timings and with little regard to regional needs.

Chorus have done a grand job of rolling out fibre-to-the-node networks over the last 2 years.  It has a lot of fibre in the ground around the country.  Note that Chorus have done this because the government required it as part of the functional separation agreement (which itself came about because of competitive pressures).  We should also note that Chorus have responded rapidly with fibre installations when competition threatened its position in some areas.

Secondly, to give the RBI funding to Telecom Chorus, Chorus has to be fully (not just functionally) separated from Telecom.  This will take time to effect and whilst Telecom and the government work through the process, there will be no investment in rural broadband beyond what they are required to do under the functional separation agreement and so our rural areas will again have to wait.  Rural areas have been waiting for 6 years already and the time for NZ Inc to secure economic benefits from an advanced ICT infrastructure has passed us by.  Our rural areas will now likely suffer an economic decline because of the lack of action by successive governments.

Thirdly, the presence of real competition has resulted in companies like Opto Networks rolling out fibre-to-the-farm networks.  For a $500 install charge plus $100 per month, rural users get 100Mb/s, no data cap and an included telephone line.  I do not see anyway that Telecom/Chorus, as a monopoly provider, will choose to match that.

Thursday's announcement is about New Zealand taking a step back in time.  If Chorus had been separated from Telecom at the time of privatizing Telecom, then great.  We would not be in this broadband pickle.  But the time to do that is now past.  Telecom has clearly demonstrated that it requires a serious threat of competition to make it perform.

John Allen

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Hon Steven Joyce

Minister for Communications and Information

August 2010 Media Statement Rural broadband: final proposals sought

The government has today issued a request for proposals for its Rural Broadband Initiative.

In April, expressions of interest were sought from organisations and groups of organisations interested in participating with the government to roll-out fast broadband infrastructure to rural New Zealand.

The Minister for Communications and Information Technology, Steven Joyce, says a significant number of high quality proposals were received. “These have informed our final decisions on how to proceed with upgrading rural telecommunications infrastructure. “We are now seeking national coverage proposals, rather than region by region proposals. “It’s clear that some national infrastructure companies will be able to meet the government’s rural broadband objectives, along with having the financial backing to guarantee their proposal, across the whole country.

“It was also evident that while regional bidders were able to make a significant impact on broadband coverage, they would fall short of achieving the Government’s targets for coverage,” says Mr Joyce.

As a result, the government is encouraging regional infrastructure companies and other stakeholders to partner with national bidders, and is providing an additional six weeks for proposals to be prepared in light of the discussions that will need to be held with regional companies and stakeholders.

“With this approach I am confident we will achieve our target of 80 per cent of rural households and businesses having access to broadband services of 5Mbps or better and the remaining 20 per cent on speeds of 1Mbps within the -six year period,” says Mr Joyce. “I expect the first agreement to provide fast rural broadband to be signed by the end of this year.”

The tender process closes on 12 November 2010. Intending participants in the tender process should download the Request for Proposal from www.gets.govt.nz. Information on the Government’s Rural Broadband Initiative is available at www.med.govt.nz/rural-broadband.