Hon David Cunliffe
Minister for Communications and Information Technology

New Zealand’s digital pathway: A fast broadband future
Budget 2008 is the government’s first five-year down-payment for a 10 year plan which will take New Zealand towards the government’s vision of a fast broadband future, Communications and Information Technology Minister David Cunliffe announced today.

“This government’s long term vision of rolling out fast broadband to all New Zealanders will see us spend more than $500 million in the next five years, targeting high speed open access urban fibre networks, improved rural connectivity and improved international links.

“This builds on the revolutionary regulatory changes we have already made, which will ensure major additional investment and competition by the private sector over this period.”

The Budget 2008 broadband package includes an additional $325 million of operating funding between 2008/09 and 2012/13 and $15 million of capital funding in 2008/09 to support the roll-out of high-speed broadband.

The new Broadband Investment Fund will be used to accelerate broadband investment in three critical areas:

* facilitating high speed broadband to businesses and entities such as municipalities, universities, schools and hospitals in urban centres;

* extending the reach of broadband into underserved regions; and

* improving the resilience of New Zealand’s international connections.

“The design of this fund has been well thought out. It will involve a contestable process designed to maximise competition in the sector. The criteria are based on open access and are neutral to technology. The fund should assist investor certainty and give the best possible leverage for the taxpayer's investment,” said Mr Cunliffe.

Draft eligibility criteria and a proposed process for funding applications are being released today for public consultation until 30 June 2008.

“This government is committed to a digital future. Our Digital Strategy makes it clear that reaching that potential requires a holistic approach across all sectors. Getting the best value from fast broadband requires confident, skilled users and the content and applications to drive uptake and productivity gains.
“So the government plans to spend at least $160 million over the next five years on connectivity in the health sector, the education sector through the KAREN network, and through the Government Shared Network. We will aggregate demand to speed deployment and ensure efficient use of broadband.”

In addition to the broadband package, initiatives announced in Budget 2008 include:

* an extension of the Digital Strategy by the Community Partnership Fund of $6 million in operating funding in 2008/09

* $500,000 in operating funding in 2008/09 to implement Digital Strategy 2.0

* $2.9 million in operating funding over the next five years to support the establishment of the new Digital Development Council and Forum.

This builds on original investments in the 2005 Digital Strategy of up to $400 million, which included funding for the Broadband Challenge Fund, the Community Partnership Fund, and Digital Horizons for Schools.
“Accelerating New Zealand on to a plan for widespread deployment of fibre, or equivalent fast bandwidth, to the home, and cheaper and faster broadband for all consumers will bring substantial economic gains that will transform New Zealand’s economy and society,” said Mr Cunliffe.
"The broadband pathway does not end here – Budget 2008 represents a down-payment on our ten year vision for a fast broadband future. It is reasonable to expect further significant investment during the second five year period.”

More details on the Broadband Investment Fund can be found at: www.med.govt.nz/broadbandinvestment

Attachments:
Questions and Answers (PDF)
Broadband_Investment_Fund.pdf

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