Commerce Commission considers deregulating copper network
The Commerce Commission is weighing up whether or not it should deregulate the copper network, still used for internet and landline in 80,000 rural premises.
In today's world, connectivity has shifted from a convenience to a necessity - with increasing expectations across government, business, and consumers that everyone is able to transact, work, and engage online.
Kiwis seek fast, reliable internet access more than ever, whether it's for streaming entertainment, joining a meeting from home, or participating in online classes.
For rural communities, connectivity is even more critical in enabling people to access education, healthcare and economic opportunities.
NZIER research has shown that providing rural consumers with the equivalent high capacity (i.e. fibre) broadband as urban New Zealanders could result in a staggering $16.5 billion in economic benefits to the rural economy over the next 10 years. This equates to $6,500 per household per year. The impact of investing in this infrastructure is significant considering the Government's ambition to double the value of our export earnings, as well as the increasing 'digital expectations' on our rural communities and businesses to transact and access a range of services online.
Despite these facts however, rural New Zealand is at risk of being left behind. There is a lack of a co-ordinated long-term plan for the country's rural connectivity infrastructure as we are set to phase out the copper network in the next decade.
While the copper network served us well in the past, it doesn't provide the capacity, speed and reliability Kiwis want today. That's why in areas where fibre is available, we have been retiring copper since 2021 and why we are seeing a dramatic decline in copper connections even in areas where fibre isn't available.
Nearly two thirds of rural New Zealanders now get their internet and voice services on a technology that isn't copper, and many telecommunication services. At its height, the copper network provided connectivity to about 1.7m households, it is now only serving around 10% of this number and continuing to fall. With many urban households and businesses switching to fibre, and in rural to other alternatives like satellite and wireless broadband, it is no longer sustainable or suitable to run the copper network.
Alternative services like fixed wireless and satellite are now better able to meet connectivity needs compared to copper, for example those provided by wireless internet service providers (WISPs), mobile network operators, and providers like Starlink. However, it is fair to say none of these provide the capability, quality, and reliability of fibre.
Emphasising this commitment to high-capacity connectivity earlier this year we announced that Chorus was investing $40m outside of any government programme to take fibre to an additional 10,000 households and businesses across 59 communities across the country.
While this has enabled those 10,000 households to effectively win the 'broadband lottery', we believe there needs to be a long-term plan for ensuring that all New Zealanders are able to access the connectivity infrastructure they will need into the future.
Huge gains have been made through a succession of rural broadband programmes to improve rural connectivity, however a significant digital divide remains and will continue to grow without a clear long-term plan, despite around $800m being spent so far by government.
As a country, it's worth considering what our expectations are for how far the fibre network should reach, where we expect wireless and satellite to become the default technology, and how we should align our regulatory and investment incentives to achieve this.
At the TUANZ Rural Connectivity Symposium last week, the message was clear that we needed to be thinking more long term, and how critical a clear plan across government, industry, and most importantly, rural communities is to ensuring that all New Zealanders will have the services they need to thrive in the future.
We proposed an ambitious vision of fibre to 95% of New Zealanders over the next decade, which would cost between $200m-$250m per year over ten years and close the rural/urban divide by nearly two thirds. Others will no doubt have their own solutions and proposals.
As the Government looks to set its infrastructure priorities, it is important that connectivity continues to be a focus.
We know the copper network is not the answer. And we can't risk a growing digital divide as that is in no one's interest. That's why as we retire the network that has served us well for the last forty years, it's time to think about what the next forty will bring.
There is so much potential in our rural economy waiting to be unlocked with the right connectivity. But we need to have a plan. Chorus is committed to being part of that conversation - and it's time to get started.
