Joyce reveals rural broadband contenders

A partial list of the 39 parties vying for the government’s $300 million rural broadband initiative (RBI) has been revealed for the first time.

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The RBI, which is a separate project to the urban focused $1.35 billion ultrafast broadband (UFB), aims to bring faster internet to rural areas by laying new fibre optic cable, supplemented by wireless and possibly satellite broadband in some areas.

Speaking via a (terrible) videolink to the opening day of the TelCon11 conference in Auckland yesterday, Communications Minister Steven Joyce said those who had submitted expressions of interest included:

• Chorus (Telecom’s network division)
• Vodafone
• Axia-NetMedia (the Canadian fibre company that, allied with potential equity partner Vodafone, is also chasing UFB business)
• “Some” Regional Fibre Group members (Vector has openly pitched, promising to use its existing overhead lines to bring cable to the country)
• FX Networks (a fibre network operator and Commerce Commission darling that recently won a major KAREN contract)
• Farmside (a satellite broadband provider that has a marketing alliance with Vodafone)
• Federated Farmers and Fedztel (a new company, more here)
• Compass Communications (a second-tier ISP)
• Opto Network (a start-up launched in November 2009 by industry vet Roger de Salis; uses FX Networks’ backhaul)
• Woosh (which has a lot riding on scoring a Rural Broadband Initiative contract as its commercial business continues to struggle)

The MED will now chew over the expressions of interest before releasing an RFP around August.

The $300 million rural broadband initiative – the first funding for which is due to be allocated in 2011 – will be bankrolled by $48 million from the government, plus $252 million raised from telcos in a revamped version of the TSO levy (aka the Kiwishare levy) called the Telecommunications Development Levy.

If Chorus wins some or all of the RBI money, it will be something of a hollow victory for Telecom, which previously received all of the TSO Levy (primarily drawn from Vodafone and TelstraClear) for essentially maintaining existing phone line and dial-up internet infrastructure for around 50,000 so-called commercially non-viable customers.

It may seem slow...
The RBI aims to ensure 93% of rural schools are connected to fibre, enabling speeds of at least 100Mbit/s, with the remaining 7% achieving speeds of at least 10Mbps.

Under the RBI, more than 80% of rural businesses and households will have access to broadband with speeds of at least 5Mbit/s, the government promises, with the remainder a not-so-flash 1Mbit/s.

By contrast, town and city dwellers are promised speeds of between 10Mbit/s and 20Mbits by the end of 2011 under Chorus’ government mandated, $540 million roadside cabinet and fibre network upgrade project.

“If you think these speeds sound low, you should recognise that around half of the rural community is currently experiencing only dial-up speeds,” Mr Joyce told the TelCon11 audience yesterday.