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A solution to who pays for connecting difficult-to-reach houses to the new ultra-fast broadband network appears to have been reached, though it may last only three years.
Chorus announced today it would pay up to $20 million to connect houses down long driveways and other hard-to-reach homes.
The question of who would foot the bill for these types of difficult fibre installations threatened to stem the uptake to the Government's billion-dollar broadband initiative.
Under its existing contracts Chorus - responsible for the UFB rollout in Auckland, Rotorua, Nelson, Wellington and a large chunk of the South Island - is required to meet only the cost of 15 metres of underground cabling or a single span of aerial line from the roadside when hooking up a house to its network.
But today Chorus said it would provide $20 million to cover the cost of connecting homes that are further from the roadside, up to 200 metres.
According to Communications Minister Amy Adams, Enable and Northpower - which are building the network in Christchurch and Northland - had also agreed to make connections free for houses up to 200 metres from the road, until at least the end of 2015.
Ultra-Fast Fibre, which operates in the central North Island, had already said it would provide free residential connections until 2019.
"Today's announcement provides certainty for the next three years while we finalise negotiations for the remainder of the build period," Adams said.
"Given the enormous benefits and the wide range of services UFB will offer, we want switching to fibre to be as simple as possible. While the provision of free connections was already in place for the vast majority of homes, the uncertainty for those classed as non-standard was creating some concern for retail service providers and the public."
The UFB partners had agreed to fund the majority of the additional connection package, Adams said.
Three houses sharing a right of way would have up to 600 metres of free installation from the edge of the legal road.
If this amount was exceeded, customers would need to contribute towards costs beyond 200 metres, Estimates suggest that only about 0.3 per cent of UFB residential premises fall into the category of having a connection longer than 200 metres.
Under the deal announced today, fibre hook-ups are also free for people who live in multi-unit complexes three storeys or less.
For multi-unit complexes that are more than three storeys, UFB partners have already agreed to fund the first $1000 of installation costs per tenancy under their existing agreements with retail service providers.
- Hamish Fletcher of the New Zealand Herald