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Step change and future proofing required of Rural Broad Band

Step change and future proofing required of Rural Broad Band Initiative says Feds

“The government should be thinking about a step change and future proofing for rural communities as it considers the outcome of its Rural Broadband Initiative (“RBI”) process,” Federated Farmers CEO Conor English said today. This follows recent media speculation on the outcome of the RBI process for up to $300 million of Government funding over six years

“Federated Farmers is very ambitions not just for rural New Zealand, but for all New Zealand. That is why we are so passionate about the RBI and lobbied very hard to get the investment level from $48 million to $300million.

While this still doesn’t match the level of investment going into the Urban Initiative, it is critical that the government gets it right. They have an opportunity to set our rural communities up for the next quarter century with a world beating broadband service.

“Federated Farmers bottom line is pretty simple. Of the one million Kiwis deemed “rural”, we want the greatest number possible to get the fastest broadband speeds ( not just down loading but uploading), as quickly as possible, as efficiently as possible, and as cheap as possible.

Going forward, we need the “infrastructure”, along with competition as strong drivers of innovation, service and costs . There are some exciting solutions around fibre and wireless. While we would ideally like fibre to every farm, as in the cities, we know this may not be realistic. However we are seeing wireless 4G LTE being rolled out in countries such as Australia, India, China which provide greatly enhanced performance there. We don’t want broadband speeds in six years time that Wellington had six years ago. Rural New Zealanders should not be treated as second class citizens.

“Ultrafast rural broadband means more productivity and social connectedness. Rural people are people too. One thing we don’t want to export from the country is our people. And we know that many of our city cousins would be interested in living in rural New Zealand if they too could get the speeds they enjoy in the city. Why overcrowd the cities? Excellent rural broadband would take pressure of environmental and infrastructure demand in places like Auckland.

“And those one million Kiwis deemed “rural New Zealand” produce over 65 percent of our exports and provide the heart of our multi-billion dollar tourism industry too. We need the next big enabler of productivity so we can enhance that performance. Lets face it, right now New Zealand needs every export dollar it can get.

“The government needs to make a step change and future proof rural New Zealand by going to the next level, which will be the best outcome for all New Zealanders ” Mr English concluded.

Below some points from the federations submission to the Ministry of Economic Development from November 12 2010 :

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 leapfrog our rural community forward, rather than spending decades playing catch-up.


Obviously we want 100% of rural people to get broadband. However we do appreciate the topography challenges and the 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 LTE.

Wholesale cost:

This needs to reflect the benefit of the $300million input and be around $30 month.

Retail cost:

This needs to be around $60 for an excellent service to facilitate uptake.


We don’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 and that the successful infrastructure bidder should provide a ‘NETCO’ service to all operators enabling them to sell minutes and megabytes to consumers. Consumers can 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, but must be determined on the greatest benefit to rural people and communities.


It could be a concern if the government ended up simply funding the 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 to allow 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 i.e. 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.



Federated Farmers of New Zealand

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