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UFB project completed

Paul Brislen, Editor. 25 November 2019, 7:23 am

The project was first mooted by long-standing National MP Maurice Williamson as far back as the early 2000s but it wasn't until 2008 and the announcement by Minister for Communications Steven Joyce that the government would introduce a fibre to the home project that the Ultra Fast Broadband plan properly got under way.

Now, that initial project is finally complete, with a fibre network deployed to 75% of the population (although a much smaller percentage has actually signed up to it) and a second project underway to boost that figure to 87% by 2022. 

Compared with Australia's NBN project, current cost estimates put it at $A51 billion, the UFB has delivered much faster speeds to a greater population coverage in a more timely fashion and at a much reduced cost.

The UFB will eventually have cost New Zealand taxpayers somewhere around the $700 million mark, thanks to a capital recycling scheme that saw Local Fibre Companies (LFCs) effectively borrow capital at no interest rates and use payments for laying fibre down one street pay for the deployment down the next.

But the project was not without its own controversy. Initially, Telecom New Zealand resisted the siren lure of free money because in order to join the project it would have to voluntarily split the company in half - one half a retail telecommunications provider and the other a lines company, building the network.

But with other companies lining up to demand their slice of the pie, Telecom eventually bowed to the inevitable and agreed it too would join in, so long as it won the lion's share of the project. Telecom would split in two, to become Spark and Chorus, and the shape of New Zealand's telecommunications sector would be dramatically changed.

And then of course there was the ten-year regulatory holiday clause, introduced in the Telecommunications Amendment Bill (2010).

Former Techblog editor and contributor Sarah Putt was editor at Computerworld when the bill was introduced and was the first to spy the clause tucked away at the end of a Supplementary Order Paper (SOP) that was longer than the bill itself.

The clause would allow Telecom a ten-year break from Commerce Commission oversight (something that would be due to expire about now) for its fibre deployment and was hotly contested both by consumer rights groups and also by the Minister himself, who declared it would add at least $600 million to the cost and make it unpalatable for his caucus colleagues.

However, eventually common sense prevailed and the project was signed off without the clause. Chorus did go back cap-in-hand at a later stage asking for more money as a form of relief from its regulated copper-line services but that also was rebuffed, albeit eventually.

As to the future, with fibre now deployed to a large percentage of the population and with the Rural Broadband Initiative (RBI) also well underway, attention must turn to making use of the network for more than simply watching television. Regardless, the next decade or more will see New Zealand well placed in terms of broadband capability at a time when the ICT sector is growing quickly.


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