Menu
New Zealand Institute delivers broadband cliff-hanger

New Zealand Institute delivers broadband cliff-hanger

New Zealanders interested in encouraging the growth of broadband might have expected some concrete suggestions by now from the New Zealand Institute (NZI) on how to make it happen; but instead the institute's latest report leaves us with a cliffhanger of Friday soap-opera proportions.

The report finishes with a set of questions: "What is required to create incentives for private investors to invest significantly in fiber infrastructure? How can the existing constraints on investment be overcome? What is the role of the government in creating a regulatory environment that is conducive to this investment? What investment vehicle needs to be built? What specific steps should be taken over the next 12 months to commence the transition [to accelerate fiber deployment]?"

But these questions will be left unanswered for another few weeks, while the institute puts the finishing touches on what is now Part 3 of its study.

NZI planned that its initial context-setting paper, published last year, would be followed by a two-parter. The first part tackled questions such as how much broadband should matter to New Zealand and whether we're evolving quickly enough to provide capability in a reasonable time (the answers later emerged as "very much" and "not nearly quickly enough").

The second part was to have given the institute's ideas on the sequence of actions needed to encourage fiber rollout and likely costings.

What emerged this month was a different Part 2. In view of local loop unbundling and Telecom operational separation plans and, particularly, Telecom's announcement of a major fiber rollout to curbside cabinets, the institute decided to pause and consider the significance of these announcements, says institute chief executive David Skilling.

Despite the major changes and Telecom's $1.4 billion (US$1.1 billion) fiber rollout, NZI is pessimistic on two fronts: fiber is still not rolling out fast enough and we are becoming too dependent on Telecom for the answer.

An appropriate schedule would have fiber to 75% of premises in NZ by about 2018, says NZI. On present plans -- even with the Telecom deployment scheduled over the next four or five years -- we will still be only halfway to that goal by 2012, it says.

Telecom's shareholders, however, are not convinced that a big infrastructure investment is the way to go, Skilling says. The returns from an infrastructure investment are safe but lower than the more risky areas like retail and wholesale services. Telecom is a complex company offering "a mix of investment classes" and its shareholders reflect that.

In an atmosphere of regulatory uncertainty "there is nothing to be lost by [Telecom] waiting, because no-one else is building fiber infrastructure," he says.

The preferred way ahead will involve a change in regulation to "seeing fiber as a stand-alone asset class," which will encourage specialized investors who look for payback in the longer term, Skilling says.

NZI sees private investment as the solution, but government has a role in creating the incentives. The likely facilitators will be a combination of government funding and regulatory encouragement of competition in fiber building.

There are "similarities and differences" between NZI's vision and Peter Macaulay's fiber Fund. But Skilling is withholding the detail of the institute's proposal. That will have to wait for the publication of Part 3 of the report.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments