Ultra-fast Broadband Initiative: Government now calling for partners

Published: 10.11.2009

The government is now calling for partners in its ultra-fast broadband initiative, which will see the government investing up to $1.5 billion in open-access fibre infrastructure promising speeds of at least 100 Mbps downlink (and 50 Mbps uplink) to 75 percent of New Zealanders within the next ten years. The expectation is that the private sector at least matches the government’s investment.

The government’s co-investment model
The government’s proposal sets out an innovative commercial model for co-investment with private sector partners in “local fibre companies”, which will deploy, own and operate the open access network in a given coverage area.

The model is designed to address a key economic problem deterring private investment in ultra-fast broadband networks – the risk of uncertain uptake. Under the commercial model, the Crown shoulders a significant portion of that risk, with the partner required only to invest in the network as customers connect.

In return, the private partner will meet the local fibre company's establishment costs and shoulder the majority of the deployment and execution risk – matters that the private sector is best placed to manage.

Partner selection process
The requirements and parameters of the partner selection process are set out in the Invitation to Participate (ITP) document.

While not mandatory, persons intending to participate in the partner selection process should notify the Ministry of Economic Development of their intention by Friday, 13 November 2009.

Final proposals must be lodged by Friday, 29 January 2010.

Crown Fibre Holdings
Responses to the ITP will be evaluated by newly-formed Crown-owned company Crown Fibre Holdings Limited, which will operate the contestable partner selection process and manage the government’s investment.

Crown Fibre Holdings will negotiate one or more investment proposals and will be responsible for deciding on the proposal(s) to pursue, with the approval of shareholding Ministers.

Crown Fibre Holdings is chaired by Simon Allen, a former Chair of NZX and highly regarded investment banker who built ABN AMRO New Zealand from scratch. Mr Allen is joined on the board by Andrew Body, Miriam Dean QC, Dr Murray Milner and Keith Tempest.

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