Crown Fibre's mandate will extend to rural broadband, mobile black spots

Thursday 22nd October 2015

Crown Fibre Holdings, the government entity tasked with overseeing the taxpayer-sponsored fibre network build, will have its mandate extended to cover rural connectivity, which Communications Minister Amy Adams wants delivered at faster speeds over the next decade.

The agency will continue to be responsible for the ultrafast broadband programme, which is currently in a tender process to extend its reach, and will assume responsibility for an enlarged rural broadband initiative and the mobile black spot fund to provide coverage in areas where there isn't any, Adams said at the opening of the APEC telecommunications and information working group in Auckland yesterday.

"The New Zealand government has played our part in that goal by investing more than $2 billion in world-class communications infrastructure into two major initiatives that will deliver faster, better, internet," she said. "We want to see all Kiwis, whether urban or rural, with access to the economic and social opportunities high-speed connectivity brings."

Five years into the deployment of UFB, the programme is 9 percent ahead of target with about 44 percent of New Zealanders able to connect to the network, including 93 percent of businesses and 95 percent of schools in urban areas. Crown Fibre expects about two-thirds of the project to be complete by June 30, 2016, according to the agency's annual report.

Earlier this month, Adams lifted the targeted peak speed for broadband connectivity to at least 50 megabits per second for 99 percent of New Zealanders by 2025, up from a previous goal of at least 5 Mbps for almost 98 percent of the country under the rural broadband initiative. The remaining 1 percent would get speeds of 10 Mbps.

The extension to the rural broadband initiative and the mobile black spot fund requires another $150 million through the Telecommunications Development Levy, the mechanism used to build a contestable fund for commercially unviable telecommunications services, often in rural areas.

The Commerce Commission today set its draft determination allocating the size of the levy for the year ended June 30, 2015, with Spark New Zealand to pay $19 million of the $50 million total, followed by Vodafone New Zealand at $13.8 million, and Chorus at $11.1 million. Two Degrees Mobile faces a bill of $2.9 million, and CallPlus will pay $1.2 million.

Adams told the APEC group the country needs to embrace the opportunities afforded by an increasingly digital economy, which means existing regulatory and policy frameworks need updating. A discussion document seeking submissions to review the Telecommunications Act 2001 was published last month.

She said the country's "current process for setting wholesale prices for the copper network might not be the best approach in a fibre-based world" - a reference to the dispute between network operator Chorus and the Commerce Commission over the regulated price for the company's ubiquitous copper network - and highlighting the utility-style regulation alternative floated in the review paper.

"Today's consumers can select the devices that best suit their lifestyles and connect them to one or more network providers to access the service and content of their choice," Adams said. "For policy-makers and regulators, however, these rapid changes in technology create the risk that today's regulatory regimes may rapidly fall out of tune with changing business models and consumer expectations."

BusinessDesk.co.nz

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