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Government

NZ signs off on rural broadband

The New Zealand Government has finalised its NZ$300 million rural telecommunications plan to roll out high speed broadband in rural areas, with Cabinet signing off on the proposals yesterday.
Written by Jacquelyn Holt, Contributor

The New Zealand Government has finalised its NZ$300 million rural telecommunications plan to roll out high speed broadband in rural areas, with Cabinet signing off on the proposals yesterday.

Steven Joyce

Steven Joyce (Credit: NZ Govt)

Communications and Information Technology Minister Steven Joyce said that the majority of rural homes will gain access to speeds up to 5Mbps, with speeds for more remote areas expected to sit around 1Mbps. Schools will achieve higher speeds under the plan, which aims to provide 97 per cent of schools with at least 100Mbps. The remaining 3 per cent of schools would be able to access speeds of at least 10Mbps.

The plan had been modified after objectors had argued it favoured schools too highly over rural communities, according to Joyce. "While the schools will be the original catalyst to get fibre to the community; achieving at least 5Mbps across the communities is the primary aim of the exercise," he said.

The plans also included reforms for the country's telecommunications service obligations (TSO), which will significantly impact the compensation paid to Telecom New Zealand for providing services in commercially non-viable, rural areas.

Telecom New Zealand responded to the reforms, stating that its earnings before interest, tax, depreciation and amortisation for 2011, 2012 and 2013 would see losses of up to NZ$56 million if current plans are implemented.

The initiative is expected to cost $300 million — $48 million coming from a direct government grant, and $42 million per year over six years ($252 million in total) from a new telecommunications development levy, instigated as part of the governments TSO reforms.

The rural telecommunications plan will be implemented alongside the New Zealand Government's NZ$1.5 billion ultra-fast broadband (UFB) initiative, and will address the 25 per cent of residents living outside urban areas.

A tender process is expected to determine both the date of completion for the project and which providers will be selected for its implementation. It has been estimated, however, that the project will begin in early 2011. Expressions of interest will be sought in April, with a request for proposals planned for release in July or August.

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