WASHINGTON, June 9, 2010 –The New Zealand government has joined much of the rest of the world’s governments and has decided to directly fund the expansion of broadband. The government has setup an ISP Crown Fibre Holdings, back in October 2009 which is being tasked with providing the nation 100Mbps down, 50Mbps up high speed access via fiber to the home. The government plans to spend NZ$1.5 billion ($997.34 million US) by 2020.
The issue is so important that it was mentioned by Deputy Prime Minister and Minister of Finance Simon English in his annual budget speech to the New Zealand House of Representatives.
“Another major investment is the Government’s ongoing investment in ultra-fast broadband infrastructure through Crown Fibre Holdings.
Budget 2010 allocates a further $200 million ($132 million US) of capital funding, in addition to the $248 million ( $165 million US) allocated last year, as part of a total expected investment of $1.5 billion ($997.34 million US).
This funding will enable Crown Fibre Holdings to start making substantial contract commitments with the private sector to start rolling out the new fibre network.
A further $48 million ($32 million US) has been allocated for ultra-fast broadband in schools.”
The government will provide funding to ISPs to lay fiber across the nation but these companies are unable to provide last mile service rather they will simply manage the physical network. Local ISPs will have access to these networks to provide direct internet services. The firm which has installed the fiber may offer last mile services but must create a separate firm for the retail sales. Additionally this firm must also allow competitors to have access at the same price as their retail subsidiary. There is also not a limit as to the number of fiber providers who are able to receive the government funding which will create competition among the fiber providers along with the retail providers.
This plan dwarfs the proposals of the FCC and not only expands broadband access but creates competition which will further drive future expansion.