Public-private partnerships will be established to deliver ultra-fast broadband to 75% of New Zealanders within 10 years, Communications and Technology Minister Steven Joyce announced today.
The broadband roll-out is a National election commitment and it has set aside up to $1.5 billion to achieve it.
The Government will establish a Crown-owned investment company, Crown Fibre Investment Co (CFIC), to handle its investment.
"Under the proposal, CFIC will invest alongside private sector co-investors in regional fibre companies that will deploy and provide access to fibre optic network infrastructure in the 25 towns and cities covered by the initiative," Mr Joyce said.
"This model aims to provide government investment on favourable terms, while minimising government involvement in commercial operations which we believe the private sector is better positioned to direct."
Prime Minister John Key said the initiative would give internet speeds of up to 100 megabits per second - "for most people, speeds which are quantum faster than anything they currently have".
"They will be able to watch TV comfortably and easily over their computer screens, they will be able to run businesses from home..."
The move would bring New Zealand into the 21st century, enabling it to compete with countries such as Korea, Singapore and Hong Kong.
"We are a small country, we are a long way away and if we want to connect with the world in the cheapest, most efficient way possible, we have to have world-class broadband capability."
The CFIC would focus on providing the cables needed to enable private companies to connect to it to provide the service.
A key element is "dark fibre"; fibre optic cable in the ground or on poles but which is not yet active. The fibre becomes operational by adding optical electronics at each end, to provide a service to households and businesses.
"Internet service providers and other telecommunications providers can purchase access to dark fibre, add their own electronics and then use it to provide a retail service," Mr Joyce said.
"The government investment will be in fibre networks that will operate only at the wholesale level, selling `dark fibre'-based services enabling telecommunications providers to design and specify their own downstream services.
"This approach will ensure that all decisions regarding active network technology options are left to private sector investors." Mr Joyce has called for feedback on the proposal, with interested parties having until April 27 to make submissions.
The 25 centres identified are based on population and range from Auckland, with 1.2 million people, to Oamaru, with 12,681. Nowhere smaller than Oamaru would be considered.
Those in areas outside the 25 identified would eventually get better services but that would be in the second phase of the initiative. They could expect faster broadband but would not have the fibre enabling the ultra-fast broadband, Mr Joyce said.
The 25 centres, in order of population, are: Auckland, Christchurch, Wellington, Hamilton, Napier and Hastings, Dunedin, Tauranga, Palmerston North and Fielding, New Plymouth and Hawera, Kapiti and Levin, Nelson, Rotorua, Whangarei, Invercargill, Wanganui, Gisborne, Cambridge and Te Awamutu, Blenheim, Timaru, Taupo, Masterton, Whakatane, Ashburton, Tokoroa, and Oamaru.
