The Government’s target is to deliver 50Mbps internet speeds to 99% of New Zealanders by 2025. Is that fast enough, soon enough?
I am sure that if I was given enough money in the Budget I could get things done in a shorter period of time, but if the net effect of saving perhaps a year of build time is that a lot fewer people get high-quality coverage then that is something we have to weigh up. And there is inevitably a trade-off between speed and price.
Can you imagine a time where the broadband experience would be the same whether you lived in a town or in the countryside?
I don't think we will see fibre to every home in New Zealand at least in the foreseeable future, but that is not to say rural homes won't have a high quality of connectivity. But there is a big difference between someone in a small town outside the footprint of UFB, versus someone who's decided to live extremely remotely in the wilds of the Southern Alps. I live on a farm in a rural electorate, and I am very aware that when you live rurally, you don't expect to have, necessarily, the same things within easy reach as you do in the cities.
However, I want to see rural NZ connected and able to partake in the digital world. Although we have this incredibly difficult geographic population density when it comes to building a fixed line network, one of the real advantages that New Zealand has compared to places like Korea, Singapore or Japan is that we are incredibly rich in spectrum to support mobile-based solutions.
If you look at what you are able to do with fixed wireless or cellular connections today in terms of speed, plans, and data transfer compared to when we rolled out RBI1, there is light years difference, and we can only really speculate what 5G and future iterations will do.
The Government has targets of doubling exports and getting 50,000 young people working in the primary sector by 2025. Is that achievable without bringing the rural broadband targets forward?
Those targets were set under other portfolios and ahead of the broadband targets, and the other Ministers are very confident of achieving them. Obviously we see improving broadband across the country as a significant enabler of economic growth, but the export and employment growth targets were certainly never conditional upon having broadband of 50Mbps.
Are you happy with that speed?
In actual fact, 50Mbps by 2025 is right at the top end of what you are seeing around the world. For example, Canada set a target of 5Mbps, and they have just had to extend the timeframe because they couldn’t achieve this. The UK has set a target of 10Mbps, which they are still working on achieving. If we can get it sooner than 2025 that is fantastic and we have said publically that we want at least 80% of the public at speeds that are scaleable to a gig by 2022. We also know that at least 90% of the public will have 4G LTE [fourth generation high-speed mobile] services that will provide speeds of up to 100Mbps.
When will the UFB2 and RBI2 contracts be announced?
We haven't made any statements about that and there are no dates set at this stage. It is being negotiated now and as soon as the contracts are completed we will make announcements.Obviously we are keen to move ahead as quickly as we can, but at the same time, I want to give Crown Fibre Holdings the maximum amount of flexibility in getting the best deal they can for taxpayers and for coverage. And of course we can’t finalise RBI2 contracts until we know where the fibre is going.
What do you say to people who say this needs to happen soon?
The ultimate goal is to ensure as many New Zealanders have as good a quality of broadband as they can get. If I was to judge myself on the speed of contracting rather than the ultimate outcome I think I would have my priorities wrong. The most important thing is the net result that we get for the money I have been allocated in the budget.
How flexible are you in terms of delivery of RBI2? Might you use small, local telco players, councils, even foreign investors?
The Government is absolutely open to a range of technology mixes and provision of services. In the five years between the contracting for RBI1 and contracting for RBI2 we have seen significant changes in available technology and the performance of that technology and we are certainly not committing ourselves to simply repeating the mix and structure under RBI1. We have already involved councils in terms of making sure there aren’t council compliance issues and asking them to identify blackspots and to show us their plan for using fast broadband for their communities. We can see a significant difference already across New Zealand between the councils and the regions that have a clear digital strategy and a plan for using that to advance the growth of their region and those that don't. The goal for me is the highest quality coverage, to the most people, for the money available, and whatever mix achieves that, I am open to.
What are your plans for encouraging people to use the broadband that’s available?
We need to increase focus on that but it won't be led out of my portfolio. For example [Education Minister] Hekia Parata recently announced changes to the schools' curriculum to include digital technologies. And we have the National Health IT Board doing a lot of work around telehealth and e-health initiatives. [Small Business Minister] Craig Foss is doing a large piece of work around getting SMEs to think about fast broadband and understand its value. And because sometimes there is a reluctance to move online because of a fear around cybersecurity, we are working on a cybersecurity strategy.
But in many cases it’s about cultural and education: People don’t use it because until they use it they don’t know what benefit they will get from it. It was like my husband and mobile phones. He’s been a farmer for a long time, and getting him to use a smartphone was a big challenge. Now that he has one, you couldn’t take it away from him – he realises he can run his business and talk to suppliers and fertiliser spreaders and whatever when he is out and about. Often until you embed technology in your life you can't imagine why you need it. You might think fast broadband is just about doing what you have always done a bit quicker, but it's really about rethinking how you operate.
Is there more money available for rural broadband than you have allocated so far?
As you know, we only announce funding in formalised ways – we don't give out hints. At the moment we have allocated another $150 million for RBI2 and mobile blackspots, and $210 million for UFB. What further iterations might look like will be the result of future Budget processes. But I am encouraged by the fact that increasingly we are able to deliver more connectivity with the funds available than would have been envisaged earlier on. For example, when we set up RBI1 we aimed for peak speeds of not less than 5Mbps, but the movement in technologies over that time means actually the average peak speeds being delivered are around 15-40 Mbps. And that’s to 97.8 percent of New Zealand.
Does that not just increase the divide for the other 2.2%?
Sometimes we forget that back in 2008, 80% of rural NZ was on 256 kilobit per second speeds. We have improved broadband for the overwhelming majority of New Zealanders. And we have spent more per rural user than we have on their urban counterparts. Also, as a by-product of the programme, people have got enhanced mobile connectivity.
Where are you at with the Telecommunications Act review?
The principal part of the review is around the pricing model. We have also highlighted the need to look at whether we have sufficient regulatory safeguards to protect competition in the mobile market, and whether we need regulation around the price of roaming services. I’m also interested in making sure we have a system where consumers can get effective redress when they don’t think they have received a good service from telcos, be they wholesale or retail. Separately, I have a raft of land access reforms going through the house at the moment to make sure that in situations where there are shared driveways or apartment buildings, for example, one curmudgeonly neighbour up a right of way can’t just decide no one’s going to get UFB because he’s decided he doesn’t want it.
Will that have any impact on rural broadband?
It depends what you call rural. Is 30 houses and a pub rural or urban? Some of the towns which will get broadband under RBI2 will be quite small – maybe down to 300 people.