New Zealand budget includes broadband investment

AUCKLAND – The New Zealand government has announced an investment of more than NZ$500 million (US$388 million) in broadband over the next five years, in what if calls the first downpayment on a 10-year plan.

However, the investment announcement, coming after National’s NZ$1.5 billion plan, was described as underwhelming by Telecommunications Users’ Association (TUANZ) boss Ernie Newman.

“I’m slightly underwhelmed. It’s good there is more money than there was,” Newman says, describing the plan as a refreshing of the earlier Broadband Challenge concept.

Newman was also concerned about the time lag between submitting an expression of interest and approval of a project and the administrative cost of the plan. “I wonder if it is enough to meet the expectations set,” he says. “It doesn’t read like [the government] is trying to meet Key on his own turf.”

A new Broadband Investment Fund was granted NZ$325 million for operating and NZ$15 million capital funding over five years. NZ$250 million operating funding over five years has been earmarked for delivering high bandwidth services to urban areas. NZ$75 million over five years has been set aside to extend broadband into “underserved regions” and NZ$15 million to support another international cable.

Health, education and other public service sectors have been voted NZ$160 million over five years for enhanced networks. It appears as if, as has been recommended in recent weeks, health networking will be provided through the Government Shared Network.

The funding is described as “flexible” using the maximum private funds along with contestable, grants-based funding from the public coffers. The investment will also be technology neutral, Budget documents say.

Ralph Chivers, of the Telecommunications Carriers’ Forum, describes the plan as very different from National’s. He says it is targeted and has a different set of outcomes and objectives.

“The regions will welcome it,” he says. Chivers says the elements of contestability and technological neutrality are consistent with TCF’s thinking.

He says the conditions for urban projects are quite specific requiring duct networks and open access fiber.

The government says the funding is designed to build on private sector investment already announced, such as Telecom’s NZ$1.4 billion cabinetization spend.

The Budget also set aside $9.4 million to support the Digital Strategy 2.0 and the new Digital Development Council and Forum and other measures. A further announcement on the function and design of the Digital Development Council and Forum is expected in the next two weeks.

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