Council staff working on the fibre proposal - to be known as the Flute network - now envisage a network that could grow beyond core city businesses and institutions.
Within 10 to 15 years, the network could bring high-speed "fibre to the home" to every part of the city at a cost of "under $100 million", Cr David Cull told the Otago Daily Times yesterday.
Cr Cull is deputy chairman of the council's economic development committee and has been working with council staff, including the council's economic development unit, on the broadband proposal.
"We will be pushing forward with this over time, regardless of whether we get the funding [from Government].
"The long-term goal will be to have fibre to every home - that's certainly the end goal," Cr Cull said.
Aurora Energy Ltd, a council-owned company, first unveiled details of the scheme on Wednesday, but the plan was criticised by Chorus - Telecom's network access division - for lacking a supporting business case.
A Ministry of Economic Development spokesman also warned it would be "difficult" for the council to obtain $3 million in funding from the Government's $340 million Broadband Investment Fund, if it intended direct competition with existing suppliers.
However, Dunedin businesses set to benefit from the scheme yesterday signalled their support.
NHNZ managing director Michael Stedman said Dunedin's existing broadband infrastructure was largely "Third World".
His company regularly exchanged low-quality rough cuts of products with clients in the United States via the Internet, as modifications were made, but large finished products had to be shipped, because of speed and data cap restrictions.
NHNZ general manager John Crawford said, "I think it holds the city back, really.
Certainly, it doesn't meet our needs."
Enabling NZ Ltd chief executive Gary Taiaroa, of Dunedin, said the 25 staff in his business software company's Dunedin office were forced to limit use of video conferencing and other broadband applications because of data caps.
The company served clients across New Zealand, Australia, the United States, Africa and the Pacific, but the benefits of doing business via the Internet were eroded by city's broadband limitations, he believed.
The council's economic development unit has estimated slow broadband was costing the city's 170 information and communication businesses up to $35 million in lost revenue each year.
However, Chorus product management general manager Chris Dyhrberg yesterday remained doubtful a business case supported the council's plan.
He estimated "fibre to the home" across Dunedin could cost $196 million, at an average of $3500 per household.
Cr Cull believed the council's network would fill a gap and help Dunedin IT companies who were "begging" for better broadband services during this year's annual plan hearings.
"It's too easy to dismiss broadband as just another 'nice to have' service. In fact, in this day and age it's absolutely essential infrastructure," he said.
University of Otago information technology services director Mike Harte said there was "strong interest" in becoming an anchor tenant for the new network.
