Address to Local Government Broadband Forum

Speech notes for address to the Local Government New Zealand Broadband Forum, Michael Fowler Centre, Wellington

It’s a pleasure to be here today, at the beginning of this forum on broadband. For me this is an important opportunity to pick up on some of the themes that were raised at the Digital Futures Summit in November.

The message from all sectors at the Summit was loud and clear. New Zealand needs faster, cheaper broadband and we want it now. By the end of those two days we had reached a general understanding that the path to faster and better broadband access did not rest with one or two players. It is a joint effort that cuts across all sectors, business, local and central government. And it can only be achieved through both private and public partnerships.

The Prime Minister signalled in her statement to Parliament last week, the government’s strong commitment to building and investing in fast broadband in our cities and rural areas.

Gaining greater leverage and productivity from the use of ICTs is a critical part of our economic transformation agenda. There is little dispute that accelerating the deployment of broadband will lead to substantial economic gains for New Zealand. High speed broadband connectivity is critical to our ability as a nation to meet our economic, social and sustainability goals, goals you in local government will be familiar with.

Discussions over the next two days should reinforce the importance of broadband to our local economies. And I encourage you to use the time to discuss solutions to deliver broadband to your own communities.

This morning I want to address the key elements of a national broadband framework:

1. what central government has done and is doing;
2. the part played by the private sector, and of course
3. the crucial role of local government in broadband infrastructure.

1. Past and present – government actions to date

When we released the Digital Strategy  in May 2005, the government clearly signalled our commitment to ensuring that New Zealanders were well serviced with world class telecommunications. We established a goal of reaching the top half of the OECD for broadband performance by 2010. We also aim to reach the top quartile by 2015.

These are moving targets: while availability of broadband in New Zealand is high and take up has almost doubled over the past two years, our relative position internationally has barely changed. There is no question that achieving our goals will require a substantial increase in investment in New Zealand’s broadband infrastructure from all sectors.

Central government has intervened in the telecommunications sector through regulatory reform, through stimulation of demand and demand aggregation, and through direct or indirect investment.

The stocktake and regulatory reforms of 2007 have laid the platform for extending and accelerating broadband. At the Digital Futures Summit, I laid out the Government’s strategy for ongoing simulation of broadband deployment in New Zealand. I noted that particular infrastructure gaps requiring further investment are: 

• extending fibre-to-the-node (FTTN) further than is currently planned by Telecom 
• improving the availability of very high speed services to businesses in large cities (such as through urban fibre loops) 
• improving rural broadband infrastructure, and 
• improving the country’s international connections.

The Government’s long term vision is fibre to the home, however, the economics for this to occur in the short to medium term are simply too challenging. It is proposed that the immediate goal for the deployment of FTTN is that by 2012: 

• Towns with greater than 10,000 residents (representing approximately 76% of telephone lines) will have access to broadband at speeds of at least 20Mbps; and 
• 90% of New Zealand’s lines will have access to broadband at speeds of at least 10 mbps.

Traditional models of telecommunications companies are challenged by the level of fibre investment required to lift our OECD performance and we need to develop new approaches to investment and provide fresh thinking on the most appropriate means to deliver fibre infrastructure.

The Telecommunications Amendment Act 2006 laid out the foundation for reform, establishing local loop unbundling and setting the basis for operational separation of Telecom New Zealand, a process which is still underway.

Cabinet will shortly consider four proposed National Environment Standards for telecommunications facilities which will establish national standards and provide certainty across the country for permitted activity within the Resource Management Act.

The Standards will relate to the installation of cabinets in road reserve, subject cabinets located in road reserve to specified noise limits, specify limitations on height and size for the installation of masts and antennas on existing structures in road reserve, and standards for activities that emit radio-frequency fields, such as mobile phone transmitters.

Later this year, we will introduce the Utilities Access Amendment Bill which will provide network operators with certainty in their engagement with multiple local authorities as well as providing greater clarity when seeking access to motorways or rail corridors for infrastructure building. I expect that the Bill, and the development of a National Code to govern utility access to the transport corridor, will improve the processes for considering approaches from utilities to utilize motorway and rail corridors.

The recent radio spectrum auction is a critical element in ensuring that mobile and fixed wireless services are available to extend broadband coverage, especially in rural areas.

The provision of low-cost broadband wireless spectrum is achieved by making multiple blocks available and configuring the auction to maximise rollout and competitive intensity.

The Government has been aggregating its own demand for broadband on the part of government and related agencies through the KAREN network and the Government Shared Network (GSN).

The government is also examining a range of possible options for facilitating further investment in New Zealand’s international connections.

In terms of further accelerating investment, in December I wrote an open letter asking for a consideration of options to promote increased levels of investment in telecommunications infrastructure.

In order to advance this, Stephen Tindall, as Chair of Growth Innovation Advisory Board and along with the NZ Institute, will be facilitating a forum of business, finance and sector leaders next Thursday (28 February). I know that there is a high level of interest from various local authorities in providing input to the forum. While there will simply not be sufficient space to accommodate everyone who has expressed an interest in participating, representatives from Local Government New Zealand will have a pivotal role in providing the perspective of local authorities.

The government is fully aware of the needs of rural users, and their importance to New Zealand. A mix of technologies will be needed to service this. A range of policies are being considered, including a potentially upgraded and/or contestable TSO and possible Crown contributions to accelerate rural rollout. I look forward to reading the suggestions coming forward from the workshop scheduled for tomorrow to look at rural broadband issues.

There may be room for, and the government will certainly encourage, cooperation between different telecommunications providers over sharing infrastructure costs. Examples could include the use of common facilities such as towers for wireless and cell phone services where this can be seen as enhancing competition, or least being competition neutral, while ensuring that services could be extended into areas where they would otherwise be uneconomic.

The government is prepared to work with industry, including through the provision of seed funding where even shared infrastructure would not make investment economic, to improve the current coverage of rural broadband.

2. Partnering with the private sector

I am pleased to see that the programme for this Forum allows for speakers from industry to have input to the discussions. Without wanting to steal too much of the thunder from Ralph Chivers of the Telecommunications Carriers Forum, I welcome the innovation of an ongoing dialogue between local authorities and the telecommunications industry. And I very much look forward to seeing the results of that dialogue.

I am sure, from looking through the programme, that discussions over the next two days will allow lessons being learned from the many different business models being adopted around the country to be explored and discussed. It is important that information in different areas be shared and that successful innovations are copied wherever practicable.

I am very pleased that we have been able to provide continued support for the ongoing work being undertaken by the successful first round Broadband Challenge projects. In conjunction with LGNZ, the Ministry of Economic Development has engaged Tony van Horik to assist in the support of community-based broadband network initiatives.

He is contacting and engaging with representatives of local government bodies, economic development agencies and community groups with an interest in community-directed broadband network development.

He is also working with LGNZ to develop a “Know How Guide” for local government and community groups to use to develop a business case for broadband connectivity in their local areas. He is also assisting in developing a Broadband Friendly Protocol which will be a set of business arrangements between TAs and industry on processes to be followed in an area that would be declared broadband friendly.

I envisage the Broadband Friendly Protocol as being similar to, and compatible with, the Road Code developed by New Zealand Utilities Advisory Council for example, and will ensure that necessary road opening for installation of ducting will be as easy as possible. It should sit along side and complement the National Environment Standards for telecommunications facilities that I announced earlier in improving the environment for broadband investment.

The government is also currently facilitating the preparation of a broadband resource kit. The kit will provide best practice guidance for promoting broadband investment and the effective utilisation of broadband.

The kit can be used by local government in conjunction with communities to further the deployment and use of broadband; following this will be the focus on championing broadband (via the extension of the focus beyond the toolkit into workshops with stakeholders).

This Forum will provide an opportunity to workshop ideas for inclusion in these two important pieces of work. They will form the basis of an open-ended set of documentation which can be added to and updated as experience adds to existing wisdom.

The local government sector must develop effective relationships with the telecommunications service providers: they need you and you will continue to need them: working with the TCF to forge effective and efficient working relationships is critically important.

3. Industry governance

The government is also actively working with the business and community sectors to develop a sector wide umbrella body to assist in addressing sector wide issues and provide a better interface with government policy.

A specialist advisor, Doug Martin, is consulting widely on possible models and I am hoping to confirm design options in the first quarter of 2008. You have my assurance that the community and local government sector will not be forgotten. Your active participation is essential

The role of local government in broadband deployment
Local government has an essential role in both enhanced broadband deployment and stimulating demand and uptake of available broadband.

As my colleague, Nanaia Mahuta, mentioned the Government sees partnering with local government as essential to ensuring that broadband investment is encouraged and that maximum opportunity is taken for aggregating demand and thus accelerating take-up of services.

The role of local government is crucial in four broad areas:

• Firstly in demand aggregation. Local government has the ability to assist investment decision-making and the capability of educating for and encouraging the use of enhanced infrastructures. Councils can provide the leadership to articulate community demands so that service providers can justify investment decisions. The broadband mapping tool developed by the State Services Commission is a particularly powerful tool for councils to use for this purpose. I understand that you’ll be discussing this tomorrow afternoon.
• The second area is through council procurement policies. Councils should be able to articulate and coordinate their requirements and so influence how telecommunications services are provided in their communities.
• Thirdly through direct and indirect investment and support. The Broadband Challenge projects have successfully demonstrated that involvement of local authorities is particularly important in engaging with community groups with an interest in broadband developments. Local authorities in major cities as well as mixed urban and rural areas have recognised that open access fibre networks are important for economic development in their region and are investigating how these can be established. Some examples of projects to have benefited from the fund include:
  • The Canterbury Development Corporation’s project to deploy an urban fibre network throughout Christchurch, focusing on councils, schools, health, university, and businesses
  • Nelson Marlborough Info region project to expand fibre capacity in main population centres to establish internet exchanges in Nelson and Blenheim with a new fibre connection from Blenheim to Picton.
• The final broad area is in your regulatory powers which I will go into more detail on shortly.

Matching consenting processes to broadband strategy
Consenting processes obviously play a key role in urban and rural developments and are a realm where local authorities are expert. May I respectfully suggest that opportunities for promoting advanced broadband infrastructure could lie both within and between TA consenting processes.

Local government has an important role in working with all telecommunications service providers to ensure that as far as possible regulatory barriers, compliance and transaction costs are minimised.

It is critically important that the roles of central and local government enhance and support each other.

To take just one simple example, it would facilitate the roll-out of broadband services, by both fixed and wireless operators, if we minimised delays in the provision of resource consent – up to a third of the cost of installing a cell tower is in legal costs (RMA issues), location costs (rent, rates) and power supply. Such costs are particularly important to new entrants as they endeavour to break into markets. I need not remind you that increased competition serves to reduce the cost of better broadband delivery to your communities.

You will be aware that the RMA Amendment Act allows government to develop nationwide standards for applications for consents for network including on matters of national importance.

Telecommunications companies tell me that they can be frustrated by having to make applications for the same or similar infrastructure (for example laying fibre or erecting or co-locating mobile towers). Of course each application must be assessed on merit, but I wonder whether LGNZ could be empowered by its members to develop more consistent standards and approaches.

You could also consider joint approaches within your regions for infrastructure deployment. For example the approach that EBOP and the Auckland Regional Broadband Advisory Group.

Within TAs there is a wide variation of understanding of, and willingness to, drive the rollout of advanced broadband networks. There are of course some stars, as I mentioned earlier the Christchurch Urban Fibre Proposal and Wellington’s new fibre loop that CityLink has developed for Weta Digital in Miramar. I understand you’ll be exploring some of these case studies later in the programme.

I challenge the sector to share best practice by developing a centre of excellence either within LGNZ or elsewhere which the government could assist with.

I also challenge the sector to push the envelope or the tools already available to it. I understand that many new urban subdivisions contain ducting for fibre (either empty or filled) and that some councils are considering making this mandatory. The economics are compelling. Better to lay the duct before the road is laid rather than rip it up later.

Councils could also consider using developer contributions to offset the costs of laying fibre. I understand this tool is often unpopular with developers but it is important that you drive home the importance of future-proofing all aspects of your communities.

For larger TAs, you could build or own your own fibre networks or seek to strike partnerships with the private sector to achieve this. I encourage you to proactively engage with broadband providers, business, other councils and national agencies to explore partnerships to deploy broadband.

Rural councils could work with companies like BayCity who are providing rural and provincial communities with telecommunications services. Companies have overcome the barriers by developing a reliable rural broadband network using a combination of fibre, satellite and mobile technologies.

I challenge each and every council to develop a local broadband blueprint that maps existing assets and identifies gaps and partners who can help fill them.

Digital Strategy Refresh
Finally, I would like to foreshadow something of where the refresh of the Digital Strategy might lead. It is important that Digital Strategy 2.0 is not seen as central government focused. It is vital that the private sector and community be part of it, to share leadership and take some ownership. As with Digital Strategy 1, the focus on connection must be balanced by content and capability.

Broadband is even more important for version 2.0 especially as the emphasis is now increasingly on productivity, sustainability and interactivity.

Therefore it is very appropriate that today’s afternoon session begins with a session titled “Beyond Broadband”. I commend the focus on Intelligent Communities. Being an Intelligent Community is not a matter of technology - it is creating a culture of use for that technology. It involves embracing new business opportunities for the digital age. It involves ensuring that all members of the community are equipped to take full advantage of opportunities the digital age affords.

It is very pleasing too that the afternoon leads into a discussion on digital communities and local government’s input to the refresh of the Digital Strategy.

Conclusion

In summary, the message we are hearing loud and clear from all sectors is that New Zealand needs faster, cheaper broadband and we need it now. High speed connectivity is critical to meeting our economic, social and sustainability goals – as a nation and in our individual communities.

The government has intervened in the telco sector through regulatory reform.

There are still gaps that require further investment but we’re getting there. We’re also willing to support and assist other sectors to roll broadband out across New Zealand.

The challenge for councils is to get smarter with the tools already available to you to assist with broadband rollout. To seek out public and private partnerships and find solutions to plug the gaps. And most importantly to share information and best practice.

I ask you to imagine a future where every council plays a part in the provision of broadband to their communities, or for that matter whatever other improved technology is on the horizon.

You have a key role in meeting the expectations of your communities and encouraging effective use of ICTs.

Thank you for your attention and my best wishes for a highly successful Forum.