Steven Joyce
4 November, 2009
Speech to KANZ Broadband Summit
Hwan yong harmny da. Welcome.

I'd like to acknowledge KCC Standing Commissioner Hyung Tae-Gun and Senator Stephen Conroy.

Welcome all delegates but especially Australian and Korean delegates.

This programme is important for all three countries represented here today because it provides an opportunity to hear from companies that are leading the way in digital content, technology and services, and to learn from policy agencies about the development of broadband infrastructure, telecommunications and the digital economy.

New Zealand has been very pleased to participate over the past four years in this trilateral exchange between our three governments and industries. We are very keen to see these highly fruitful exchanges continue.

The need for new leadership and a fresh approach to economic management has been emphasised by the worst global recession for 60 years, and for New Zealand, an economy that went into recession in early 2008.

As the new government, we are aiming to build a high performing economy that offers opportunity for our young people, security and prosperity for New Zealand families and a business environment conducive to investment and jobs.

Broadband investment

Broadband investment is critical to achieving this through increased productivity, enhanced delivery of education and health services, and more efficient access to international markets.

Broadband is a key part of our overall infrastructure plans. With infrastructure we need to ensure that the right level of investment is made in the right places by organisations with the knowledge and incentives to invest. We are investing $7.5 billion over the next five years to build and upgrade schools, roads, housing, hospitals and telecommunications.

We are very proud of our agricultural industries and our world-wide reputation for excellence in our export of agricultural produce. We see this as an area where the application of broadband-based technology can produce innovative new products and processes to increase efficiency and quality.

We are convinced that much greater availability of high speed and ultra fast broadband is essential to our future.

Because of the importance of our agricultural sector and our rural economies, getting fast broadband to the 25% of New Zealanders living outside of urban areas is a high priority.

The cost is expected to amount to $300 million and will be delivered through a mix of public and private sector funding.

The government initiative will be targeted at the currently most under-serviced communities.

The policy will ensure that 93% of rural schools will receive fibre, enabling speeds of at least 100Mbps, with the remaining 7% to achieve speeds of at least 10Mbps through other technologies such as wireless and satellite.

Providing fibre to the vast majority of rural schools will have a spill-over effect which will enhance services to the wider rural community around those schools. Linking rural schools to fibre will effectively deliver the capacity to provide faster broadband to the communities they serve.

Fibre backhaul is currently the primary limiting factor in the delivery of rural broadband. Getting fibre backhaul into rural communities will also allow other technologies such as wireless and cellular to play a larger role in rural New Zealand.

Wireless initiatives will play an increasingly important role in bringing faster broadband to rural households and businesses. Comparative to many countries, New Zealand has allocated large amounts of spectrum for wireless broadband use, and the government continues to look for new opportunities in this area.

Right now, the government is considering plans to release the "digital dividend" spectrum in the 700 MHz band for future mobile and fixed broadband wireless solutions after analogue television transmission is switched off.

It is expected that the Rural Broadband Initiative will result in 80% of rural households having access to broadband with speeds of at least 5Mbps, with the remainder to achieve speeds of at least 1Mbps.

Taken together with the government's $1.5 billion ultra-fast broadband urban fibre initiative, the achievement of these rural targets will mean that 97% of New Zealand schools and 99.7% of New Zealand students will have access to broadband speeds of 100Mbps or greater in the next six years.

Similarly, 97% of New Zealanders will be able to achieve broadband speeds from their homes and businesses of at least 5Mbps, with 91% having speeds greater than 10Mbps within six years.

We intend to invest $1.5 billion dollars over the next ten years to provide an enormous boost to ultra-fast broadband capacity in urban areas of New Zealand. In September we announced further details of the urban fibre initiative. The aim is to ensure that fibre communications infrastructure will be accessible for at least 75% of New Zealanders in ten years.

The Government investment will be directed to an open access, wholesale-only, passive fibre network infrastructure. We recognise that there is also a case for providing open access to lit fibre under some circumstances.

In very simple terms, this is the most "raw" access to the underlying infrastructure, and provides the best competition outcomes because the wholesale customer has full control and flexibility. It means that the wholesale customer has maximum opportunity to innovate in downstream services.

We will be partnering with the private sector. Partners will be chosen through an open, transparent selection process. An invitation to participate was released in late October. A new Crown-owned investment company to be known as Crown Fibre Holdings will evaluate responses.

The overall process to completion of commercial agreements with successful partners is expected to conclude towards the middle of next year.

Each private sector partner will be required to establish a commercial vehicle, a "local fibre company" to deploy fibre network infrastructure. The local fibre companies will provide access to dark fibre products and, optionally, certain active wholesale Layer 2 services.

Complementary measures

In addition to direct investment we are looking at a range of complementary measures which will ensure that unnecessary impediments to broadband deployment are minimised.

Possible measures include:

• o encouraging industry players to draft a Code for the provision of access to support structures;

• o looking at existing legislation such as the Resource Management Act to see whether the consent requirements can be streamlined to facilitate infrastructure development;

• o assisting local fibre companies and other telecommunications companies to obtain access to support structures controlled by Local Councils and Crown Entities;

• o considering if developers should be required to lay fibre infrastructure to the home or premise in all greenfields developments; and

• o looking at whether measures should be taken to ensure that standards for in-house ducting and wiring for business and residential premises should be included in building codes.

Broadband and education

But, it is not enough to simply provide greatly enhanced broadband facilities.

If New Zealand is to gain full advantage from our investment in fibre networks we have to ensure that we are equipped to make effective use of it. The obvious place for the government itself to work towards this objective is where it is already making major investments in our future, through schools.

Our educational future must have young people at the centre of a digital system with access to educational content and research topic information. Students and educators must be connected to communities of learners and to parents and experts beyond the classroom. And to fully succeed, students must have access to timely assessments and feedback.

Schools connected to ultra-fast broadband will provide a critical initial base to anchor the development of the fibre network.

As I mentioned, the Government's Broadband Investment Initiative will eventually see 97% of schools connected to the fibre network in six years, making the New Zealand education system one of the most connected in the world.

$150 million has been initially signalled to make more schools broadband-ready. This will enable the upgrading of internal networks within schools and work on a National Education Network. Additional activity is also underway to ensure that teacher professional development, hardware and appropriate content and services are available so schools can make the best use of faster broadband.

The Government recently announced that schools that can access fibre before 30 June 2010 (estimated at up to 200) will be given access to the current National Education Network trial - provided via New Zealand's ultra-high speed research and education KAREN network- until mid 2011.

The Ministry of Education is also now preparing a business case for broadband and education, including a business case for a full National Education Network which is due to presented to Cabinet before the end of this year.

Broadband and health

Ultra-fast broadband will have a key role in increasing efficiency in the health sector and will provide opportunities to deliver healthcare smarter. This will become increasingly important as New Zealand's ageing population puts increased demand on the health system.

A key opportunity for the health sector to gain the most benefit from ultra-fast broadband is through the development of Integrated Family Health Centres - which are part of the move to shift some secondary health services to primary providers. These centres will comprise a range of clinical services, such as GPs, specialists, pharmacy and radiology under one roof and will implement new models of health care delivery, such as remote diagnosis and home-based telemedicine - enabled by ultra-fast broadband.

Digital literacy and ICT skills

The government also wants to ensure New Zealand has a skilled and productive workforce. A skilled and productive workforce - for today and the future - requires digitally literate people.

Improving digital literacy is one of my key priorities.

New Zealand has a number of initiatives where the private and public sectors are working together to advance basic digital literacy, such as Computers in Homes and Computer Clubhouse.

However, important as basic computer literacy is, increasing our productivity also depends on ensuring that there is a greater level of specialist ICT skills in the workforce.

Many ICT firms are planning to increase staff numbers in the next six months and most are intending to maintain current staff levels. It seems that New Zealand businesses have turned to ICT during the recession as a means of increasing efficiency and lifting productivity. As we move out of recession, those firms are now starting to reap the benefits.

We are now working with the ICT industry to promote ICT careers to school students and their parents, develop a mentoring programme to improve the ‘work readiness' of graduates, and ensure ICT courses offered by tertiary providers reflect the needs of the industry.

The government regards broadband as an important part of New Zealand's future. We were elected with a mandate to secure a brighter future for all New Zealand and our plans in this area are central to that.

Conclusion

In conclusion, I wish you all the best for a successful meeting over the next two days. I am looking forward to my discussions with Standing Commissioner Hyung Tae-Gun and Senator Conroy and meeting a number of you during the day and tonight at the dinner.

Please make maximum use of this opportunity to cement new partnerships and make new friends. But please do not forget to take the opportunity to enjoy Auckland and, if you have the time, the rest of New Zealand.

Thank you.

ENDS

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