NBN vs. the world: The New Zealand experience

New Zealand has taken a different approach to Australia when it comes to rolling out high-speed broadband, with the country already housing fibre-to-the-node infrastructure.

Australia has had a longstanding rivalry with New Zealand, and now the two countries are competing on a new front, with the rollout of high speed broadband networks occurring in both.

However, each country is taking a different path on the road to implementing high speed broadband for its citizens.

This story is part of a series on how other countries have dealt with their own broadband networks and what Australia could learn from their experiences. Read about the American experience and the Korean experience.

The New Zealand approach has been spearheaded by two initiatives: The Ultra-Fast Broadband (UFB) initiative and the Rural Broadband Initiative (RBI).

A UFB working party was established in 2010, with broadband to be rolled out to 75 per cent of New Zealanders over 10 years via fibre-to-the-home. In the first six years, schools, health services and businesses would be prioritised, along with greenfield developments and some residential areas.

New Zealand’s fibre network will be capable of achieving 100Mbps speeds, with uplink speeds of at least 50Mbps.

However, unlike Australia, New Zealand already has an extensive fibre-to-the-node network, with the UFB initiative building on that network to extend fibre to premises.

Telecom's structural separation

Telecom New Zealand, the country’s equivalent of Telstra, has been a main player in the UFB initiative. Like Telstra, the company was required to undergo a structural separation, which it carried out in November last year, to be eligible for work with the project.

“The previous regulatory regime which started in 2006 [already] had us operationally separated [and] we were already a long way towards being fundamentally split into two companies anyway,” says Ian Bonnar, head of communications at Telecom New Zealand.

Bonnar says the option was to either structurally separate or not get involved with UFB and “have the risk of having your assets get overbuilt”.

The company was eventually separated into Chorus, which owns the country’s copper network and will help build the new fibre network, and the retained Telecom brand, which carries out retail and mobile operations.

However, Paul Budde, telecommunications analyst, says in the beginning Telecom was reluctant to co-operate with a structural separation. “It took longer for Telecom to come around than [Telstra]," Budde says. "In the end the government really had to put the legislation in place before Telecom accepted that, and obviously [it] had to play ball from that moment onwards."

Three other partnerships are deploying UFB, along with Chorus, which is providing most of the UFB coverage (69.4 per cent) — Enable Services; Waikato Networks; and Northpower. Eventually, the Chorus UFB network will pass by more than 800,000 premises by 2019, according to a report by BuddeComm.

While Australia’s National Broadband Network (NBN) will cost around $36 billion, New Zealand's UFB is considerably less, with the government investing NZ$1.5 billion (A$1.2 billion), managed by Crown Fibre Holdings (CFH). Private investment is also expected to make up some of the funding, but it is still unclear what role it will play.

Australia is also grappling with funding models, with a recent joint committee on the NBN calling on NBN Co to provide details on how and when it plans on transitioning to a funding model which uses private equity.

However, unlike NBN Co, which has stated the NBN is being built for the public good and not to maximise profit, CFH has stated it will provide a commercial return on the Crown’s investment. The UFB would also be operated as a business under the direction of the government’s ministers and the minister for communications and information technology.

More about BuddeCommTelecom New ZealandTelstra CorporationVodafone

5 Comments

Richard

1

I see the magnitude of benifits fibre can offer us but we already have 100mbps cable from such companies as Optus.

Most of the problem lies in that Telco's can only provide that speed locally, and we all know that Telco's 'underpurchase' transit data to minimise cost, until customers start complaining.....otherwise they just purchase as per their operational schedule.

This creates huge reductions in speed for end users and bandwidth pooling doesn't help.

So what's really the point in offering later on 1.0Gbps if the Telco's can never offer it, or can initially, but later develop bandwidth management to slow people down.

They do this with Cable at the moment to slow people down and control network resources.

Listen it's all good having a Ferrari, but it's pointless if you can't max it out without getting charged.

In this case you'll be offering up to 1.0Gbps and passively shaping people, whilst they are paying a premium monthly fee.

Absolutely pointless.

Abel Adamski

2

Richard.
Sad apology/excuses for a disastrous for the long term coalition option.
Optus/Telstra HFC only covers 30% max of the population and access to it has been intentionally limited as being a shared resource it is easily overloaded. It was designed for cable TV and has not been physically upgraded, it will actually need to be replaced to bring it up to speed and equivalent to what is used in the US. Why do that and expand it at the taxpayers expense. It's only benefit is to the owners of Foxtel and Sky.

As to the rest, capacity etc. are matters for the private sector and competition. Are you telling us the private sector has no intention of being competitive, the Libs tell us that they are and will do it better and obviously as an expert you know that is a lie,
Good you are wising us up
Limiting data on wireless, yes that is increasingly happening worldwide, spectrum limitations shared medium etc. Witout access to high capacity fixed wholesale networks th enable load shedding it is a problem.

I wonder what they plan to do with all that dark fibre the private sector is rolling out. Or those new undersea international fibre cables that they held off laying untill it was known whether the NBN would go ahead

PeterA

3

Hi Richard,

Thats why you build a national network with common Points of Interconnect.

That way all your ISPs can purchase backhaul to meet their needs (like 1gbps services) to a common location.

Indeed, since it will be the same POI as every other ISP, there will be many backhaul providers **already** installed there and competing for business.

This national network; with end to end connections will make it much cheaper to provide the necesary backhaul to provide the services that the ISPs will be offering. Its a win-win. We all get a ferrari; and because we are investing it properly; we all get a 4lane highway to drive our ferrari's at full speed down!

David Shears

4

This is where the ACCC has stepped in. New rules concerning broadband speeds have been put in place. Essentially, if you quote that your offering say 50Mbps downstream to a customer and it is found that these speeds are not being met due to limitations in your network, you will be dealt with. This of course does not prevent issues on the greater web slowing you down. But it does mean that if your provider does not have adequate backhaul to ensure minimum QOS is maintained, they are going to be taken to task. Additionally, NBNco have stated that if a provider does not have adequate backhaul available to a POI to ensure that users are able to reach their maximum download speed, they will not allow that provider to purchase that port. This may end up meaning that some customers will be turned away from a provider but at least you won't get the issues you have now where so much leniency is given to providers because of the limitations on existing infrastructure...

Steve Macmillan

5

Uber Group and Ultracom have also released residential pricing for Northpower's Whangarei UFB build.

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