NZ starts $300m rural broadband plan

High speed rural broadband in New Zealand moved a step closer today, with the country's government opening the tender process for its $300 million Rural Broadband Initiative via a call for expressions of interest.

Within six years, New Zealand aims to have fibre reaching 93 per cent of rural schools, enabling speeds of at least 100Mbps, with the remaining schools achieving speeds of at least 10Mbps. Furthermore, more than 80 per cent of rural households will have access to broadband with speeds of at least 5Mbps, and the remainder to achieve speeds of at least 1Mbps. The project will also include some upgrading of rural voice services.

The expressions of interest are to be received by the end of May. Requests for proposals will be issued from August 2010, with the first contracts due to be signed by the year end.

"The government anticipates interest in the tender to come from telecommunication infrastructure and wholesale bandwidth providers, lines companies, and community organisations in partnership with strategic investment partners and technology suppliers," ICT Minister Steven Joyce said today in a statement.

"I encourage rural communities to think proactively about how they might involve themselves in this step-change development for their communities."

The Rural Broadband Initiative is separate to the New Zealand Government's $1.5 billion Ultrafast Broadband Initiative.

The rural scheme is part funded by a $48 million government grant, with the remaining $252 million being paid for by the new Telecommunications Development Levy on telecommunications companies. This levy recently replaced the Telecommunications Services Obligation, where companies pay Telecom New Zealand to maintain rural services, including free calling.

Telecom last month said changing this system, while still keeping Telecom's obligation to protect rural services, would cost it $168 million over three years.