Government's Rural Broadband announcement is disappointing

"The government's announcement last Thursday that the $300M Rural Broadband Initiative (RBI) will go to a national provider will disappoint many," says Rural Connect’s John Allen,  "but most of all it will disappoint those rural businesses and households that had expectations of an early solution to their broadband woes."

For people in the Glenbrook Beach Road area, the announcement means that their call to action to solve their own Internet problems now takes on an urgency.  That urgency is driven as much by the developing politics of the rural broadband program as it is by their own needs.  The Residents & Ratepayers AGM on Monday night saw the formation of a sub-committee charged with gathering the names of people likely to sign up to any new high speed broadband offer.  Enterprise Franklin’s role will be to support the initiative and seek grant funding to employ a consultant to build the business case.  Once the economics of a community broadband system are determined, the sub-committe will decide on the next steps to be taken.

The government's announcement moved the RBI’s goal posts by focusing on a national bidder rather than a number of regional bidders.  This move is seen as a strong indicator of the $300M RBI funding going to Telecom's separated Chorus company.  "The many fibre companies that invested a lot of money in the RBI process will not just quietly accede to these new rules" John mused.  "And those who have seen progress in rural broadband provisioning because of competition against Telecom, will rue this announcement."

Communications Minister Stephen Joyce has advised that regional bids for RBI funding will not be accepted.  Those bidders, if they want to remain as bidders, will have to form an alliance with national providers.  Regional Telcos that have been active in installing rural broadband are effectively blocked from further work unless they form an alliance with whichever company wins the RBI.   Opto Networks is a case in point.  

Opto have been providing fibre to the farm at an installation price of $500 plus $100 per month for 100 Mb/s, no data cap and a telephone line included.  "It is improbable that the amalgam of Chorus, Telecom Wholesale and an ISP like Telecom Retail will get anywhere near to that pricing in the near future." John says.

There are only two credible national bidders - Telecom Chorus and the NZ Regional Fibre Group, although other national groups may now form to submit a revised bid.  The Regional Fibre Group are a collective of electricity lines companies around the country, represented in Franklin by Counties Power.   CEO Neil Simmons says "Counties Power are staying with the revised process and looking forward to preparing our detailed proposal."

In requiring all bidders to review and re-work their proposals, the government delays the implementation of a strategic program that is crucial to the economic development of Franklin's rural areas.  "We should expect delays to the RBI implementation caused by some intense political lobbying as the government consider Telecom’s separation offer." says John.  "Rural businesses and residents alike will be disappointed that the government's promise of action on rural broadband will be delayed and that the impetus that strong competition lends the process will be undone."