Government invites co-investment on broadband initiative

The government has released its 'invitation to participate' in the partner selection process for the $1.5 billion fibre-to-the-home initiative, Communications Minister Steven Joyce announced today - but the overall timetable is still hazy.

Mr Joyce said he was pleased to "kick off the process", which is seeking private sector partners to co-invest with the government on its broadband fibre infrastructure.

In September, the government released its final proposal for the ultra-fast broadband initiative. The government’s investment is expected to at least be matched by private sector funding through a co-investment model.

The “invitation to participate” (ITP) provides the terms and conditions of the government’s investment, including technical specifications and the government’s preferred commercial model for co-investing with partners in a Local Fibre Company (LFC). 

“The ITP is based upon an innovative commercial model that will see the government largely fund the deployment of fibre into communities, and the Crown’s LFC partner gradually taking a greater share in the LFC as it connects customers. This risk sharing model overcomes the major hurdle of uncertain demand,” Mr Joyce said.

“The commercial model is complex and warrants careful consideration.  To assist interested parties in understanding the detail of the ITP, the Ministry of Economic Development will be available for briefings in Auckland, Wellington and Christchurch over the next few weeks.”

The LFC will deploy, own and operate the open access network in a given coverage area.  The detailed ITP documentation is available here on the Ministry of Economic Development’s (MED) website.

Vague timetable
People intending to participate in the partner selection process must notify MED  Friday November 13.  Proposals must be lodged by 29 January 2010.

Mr Joyce has yet to say when proposals will be whittled down to a shortlist, however, when negotiation of terms with short-listed bidders will begin, or when final agreements will be formalised.

Tuanz: steamy
“After some early anxiety about slow progress, milestones are now being passed at impressive speed,” said Telecommunications Users Association (Tuanz) chief executive Ernie Newman in response to today's announcement.

“The process has now got a real head of steam. There’s been a series of papers emerge over the past few weeks, every one of them a top quality document that deals in considerable depth with the numerous complex issues around the broadband project,” Mr Newman said.

“It’s worth reflecting that today’s announcement falls just a day short of 18 months since National revealed the plan for ultra-fast broadband - the first of its policy announcements for the 2008 general election. To have reached the stage of calling for proposals on such a complex and ambitious project is very encouraging.

“New Zealanders can look forward to a time when leading edge telecommunications becomes a key weapon in raising our OECD rankings, restoring our international competitiveness, managing our environment, and making this a better country in which to live.”

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