The New Zealand has government has unveiled details of its NZ$1.5 billion ($1.07 billion) high-speed broadband plan with a warning that incumbent Telecom NZ will need to structurally separate if it wants to take part.
The plan calls for a high-speed fiber network covering 75% of the population within ten years. The dark fiber network will provide open, passive-only wholesale access to retail internet providers.
Communications minister Steven Joyce said the government would incorporate a new investment company, Crown Fiber Holdings (CFH), to manage the government's investment in fiber networks. CFH, which will be operational by October, will also manage the vendor selection process.
Private players have been invited to establish a local fiber company, which would work in partnership with CFH to rollout fiber to certain region, and then manage the wholesale services in those regions.
But Joyce said that CFH will not work with any fiber companies that are controlled by companies which also provide retail services. If Telecom NZ wants to participate, it will have to structurally separate its retail and wholesale businesses.
Telecom NZ had submitted an alternate proposal for the network rollout, Joyce said, but this plan was insufficient. It covered fewer homes than the government's version and only provided for fiber ducts and not the fiber itself.
CFH will issue an initial invitation to participate shortly after its incorporation, Joyce said, and should have all the relevant agreements in place by the June quarter of 2010.
“The future of broadband is in fiber, and taking it right to the home will bring significant gains for productivity, innovation and global reach,” he said.
“Broadly, ISPs are in support of the proposal, particularly the separation of retail and the infrastructure as well as the inclusion of dark fiber,” said Graham Walmsley, acting president of the ISP Association of New Zealand (ISPANZ).