Fast rural broadband critical to all New Zealanders
With the close of bids for the $300 million Rural Broadband Initiative (RBI), Federated Farmers is stressing that rural broadband is critical to all New Zealanders.
“While we participated in the Expression of Interest for the RBI process, we have made a submission to the Request for Proposal (RFP) instead of a bid. Our major points are at the bottom of this release,” says Donald Aubrey, Federated Farmers Telecommunications spokesperson.
“Federated Farmers is passionate about rural broadband. We want our rural communities to receive the fastest broadband speeds possible. We want it to go to the greatest number of rural people as quickly as possible, as efficiently as possible and as cheap as possible.
“What’s sometimes missed is that rural people are people too. We need the same education, health and social connectedness as anyone else.
“Broadband is the next big productivity and production enabler, which will see significant economic benefits, but more so in rural New Zealand as that’s the genesis for the economy.
“But it’s not just about us. This is critical to all New Zealanders as it will enable us to be become better farmers with obvious economic spin-offs. I think the Psa outbreak in the Bay of Plenty rams this economic point home.
“It will also enable significant regional economic development by removing a possible digital divide affecting over one million New Zealanders classed as rural. The RBI unlocks regional development by enabling the country to be on the same page as town.
“It just doesn’t make sense to us that everyone should live in Auckland or that the Government should be spending most of our money there.
“We are, however, pleased that Federated Farmers has got the investment level from $48 million, as originally proposed, to $300 million. Though we’re still not quite convinced that this is enough money, now that the bids are in, we’ll be able to see how far it goes.
“Our concern remains that the targets in the RBI are just not ambitious enough.
“We look forward to continuing our work with the Ministry of Economic Development and the Government to ensure that the best possible outcome for rural New Zealand is achieved.
“Our eyes just aren’t on tomorrow, but in setting rural New Zealand up for the next quarter century and beyond,” Mr Aubrey concluded.
In commenting on the announcement from Telecom and Vodafone on their joint bid, Conor English, Federated Farmers Chief Executive commented,” it’s great that we are getting some excitement around this process. We are aware of several very good bids and we just want the best outcome for our rural people and the rest of New Zealand.”
Some points from Federated Farmers submission to the Ministry of Economic Development:
Broadband speed:
Our view is that the RBI targets do not future proof the rural community and are generally too low. We are seeking a step change that will jump our rural communities forward, rather then spending decades playing catch-up.
Coverage:
Obviously we want 100 percent of rural people to get broadband. However, we do appreciate topographical challenges and economic trade offs that sometime have to be made. While fibre gives the best performance, the solution therefore will be a portfolio of technologies. It is important that New Zealand gains the advantage of emerging technologies, such as Long Term Evolution (LTE).
Wholesale cost:
This needs to reflect the benefit of the $300 million input and be around $30 per month.
Retail cost:
This needs to be around $60 for an excellent service to facilitate uptake.
Datacaps:
Federated Farmers doesn’t like data caps. They should only be used where there is a proven technical requirement to manage performance.
Ability for real competition:
Competition encourages innovation and value for money. In our view, it is in the best interests of end users to have real retail competition on the RBI services. The successful infrastructure bidder should also provide a ‘NETCO’ service to all operators, enabling them to sell minutes and megabytes to consumers. Consumers could then swap their retail provider from Vodafone to Telecom to 2degrees to Woosh for example. This will ensure a larger amount of competitive tension whereby end users can ‘vote with their consumer behaviour’ for the best call centres, the best and most suitable handsets, the best value add software and content services.
However, in its current state, the RBI may trap consumers to an almost monopoly provider for several generations to come.
We have had concern regarding this for mobile termination rates and have worked to get them regulated. Whatever outcome there is from this process, it is vital that the regulatory framework ensures competition.
Levy money:
The outcome of this RFP process must not be influenced by what commercial organisations pay the new levy to fund rural broadband (ie its only fair that those who pay the levy should get it back), but must be determined on the greatest benefit to rural people and communities.
Infrastructure:
It could be a concern if Government end up simply funding an incumbents’ expansion of their existing tower network, in a similar manner that Project Probe did. The successful bidder should be providing a true open access solution all the way to the end customer, allowing local, regional and national service providers to participate. Therefore, existing towers should be made available on a similar basis to any new towers and/or, the per minute model suggested above adopted.
Rollout timeframes:
On current RBI timeframes, in six years time (2017/2018), some in the rural community may still be waiting to get broadband at speeds that some in urban New Zealand have had for over a decade. We do appreciate funding and logistical constraints, but obviously, the earlier the rollout the better.