Councils Cool on Broadband Help Request

By HOYLE, Jon

CALLS by Telecom’s chief executive and the communications minister for local authorities to help fund faster broadband has been met with a cool response.

Local Government New Zealand president Basil Morrison said rural and provincial councils already faced high costs of infrastructure upgrades, such as drinking water, stormwater and flood protection.

Communications Minister David Cunliffe and Telecom chief executive Paul Reynolds told the Local Government Broadband Forum in Wellington yesterday that councils should consider direct and indirect investment where fast broadband rollouts were not commercially viable.

Telecom is in the first stages of a four-year, $1.4 billion programme of building a fixed-line broadband network capable of delivering speeds of between 10 and 20 megabits per second for about 80 per cent of all lines.

Mr Cunliffe and Mr Reynolds said this was not enough.

Mr Reynolds said the business case for extending the network became less viable the more the network expanded. In remote areas, other potential funders would need to “come to the party”.

Responding to a delegate from the Catlins, in Southland, who said Telecom would not extend fixed and mobile services in the area, Mr Reynolds said: “I am prepared to put funding forward, but how much is the local community going to put forward?

“Can’t we complete the circle — that is the challenge I think.”

Mr Morrison said councils knew high-performing broadband was critical to New Zealand’s future, and that public and private sector collaboration was needed.

However, the financial pressure, particularly on smaller rural councils with remote communities likely to miss out on the new Telecom network, was on the councils least able to contribute, he said.

Mr Cunliffe said the Government had suggested a contestable “fibre fund” to provide “low price, long-term financing to extend fast broadband in areas where Telecom cannot generate its standard rate of return on investment”.

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