NZ Communications Minister Steven Joyce (Credit: NZ Govt)
Dark fibre backbone infrastructure will be a significant component of New Zealand's planned $1.5 billion national broadband network, the country's Communications Minister Steven Joyce said yesterday.
"I can tell you today that it's our intention to invest at the infrastructure level — i.e. that is the provision of dark fibre infrastructure," he told a conference in New Zealand yesterday.
I can tell you today that it's our intention to invest at the infrastructure level
NZ Communications Minister Steven Joyce
"We anticipate that that is the level that the market will not provide at this point. And government investment at that level will facilitate the competitive commercial provision of ultra-fast broadband services over fibre, with the minimum regulatory intervention."
The move represents a significant deviation from the model that Australia is likely to follow with its own NBN, with bids for the network so far believed to be focused on rolling out infrastructure to customers' premises; known as "access" networks rather than "backhaul" infrastructure.
Joyce also outlined why a centre-right National government was making an ideological shift towards government intervention in the telecommunications market. Citing projects in the UK and US, Joyce said governments the world over were promoting strategies to improve broadband coverage for its economic benefits.
The New Zealand government believed the market was not providing enough fast broadband.
"The development of an ultra-fast broadband network will be critically important to New Zealand's growth prospects," he said. "It will provide New Zealanders with the base infrastructure that will support advanced broadband services, including high speed, real-time internet connections to the world."
Joyce spoke of internet speeds in excess of 100 Mbps within ten years, which meant replacing copper cable with fibre in coming years. But left to the market, this might take more than 30 years, denying New Zealand an annual expected economic benefit of NZ$2.4 billion to $4.4 billion, according to independent estimates.
The global financial crisis also made the government's $1.5 billion investment "even more important", he said, including playing a key role as the New Zealand economy moved out of recession.
Some media critics had expected and hoped Joyce would have given more details of the government's broadband polices, including how the $1.5bn will be spent. However, Joyce promised details "in the next few weeks".
Ernie Newman, chief executive of the Telecom Users Association of New Zealand, told ZDNet.com.au he was "very impressed, very happy" with the government's reaffirmation to the NZ$1.5 billion broadband investment.
"This is about benefits to New Zealand after the downturn. I think the whole investment offers a stimulus," he said. Newman added the minister showed he was mindful of how the government's own proposals "need not chill the investment" of the private sector.
Indeed, the telcos recently commissioned a report from researchers Castalia which said the government's own proposals were unnecessary and threatened private sector investment.
However, after the minister spoke, Telecom NZ CEO Paul Reynolds issued a statement saying the telco wanted to "play a major role" in bringing fibre to every doorstep — and that it wouldn't aim to make "a single dollar profit" on a taxpayer-funded network.
"We stand ready, willing and able," Reynolds was quoted in The National Business Review.