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Communications Minister Amy Adams says the government will spend $150 million extending rural broadband.

The Rural Broadband Initiative second stage has a $100 million budget. The money is to boost speeds for people not covered by the urban Ultrafast Fibre network. She has earmarked a further $50 million for extending mobile coverage. This will cover state highway black spots and in tourist areas.

For now, the plan is for the RBI extension to target areas where connection speeds are less than 20 Mbps. Adams' long term goal is for 99 percent of the population to get peak broadband speeds of at least 50 Mbps. The rest will get at least 10 Mbps.

RBI's slow start

After a slow start, New Zealand’s RBI has performed better than anticipated. Chorus and Vodafone shared the original budget of $300 million. At the time of the contract Chorus was still part of Telecom NZ. Chorus's job was to build fibre links to open access rural wireless towers. Vodafone built the towers and used them for mobile and fixed wireless broadband services.

Until 2015 Vodafone's RBI fixed wireless service used 3G mobile. The contract was for broadband connections of at least 5 Mbps. Although at times it didn’t deliver. At the time customer numbers were only a tiny fraction of the potential connections.

Two things changed this. Spark entered the market with a competitive offer. Then both carriers began using 4G mobile, which mean faster speeds and higher data caps. Today many rural customers get fixed line speeds well over 20 Mbps.

Adams says almost 300,000 rural New Zealanders now access better broadband thanks to RBI.

Bang for buck model

RBI's first phase in effect asked companies to bid outlining what they could do in return for the funds. The money subsidised private businesses willing to risk their own funds serving rural markets.

A similar bidding model applies to RBI 2.  But it is not just open to large telecommunications companies. Adams invited other groups to bid. The government isn’t fussy about the technology used. Its focus is on getting the most coverage.

Spark New Zealand has been quick to put up its hand for the new project.

The company’s general manager of regulation John Wesley-Smith says: “We're looking forward to working our way through the details and working with government, community stakeholders and other telecommunications network operators to identify how the government's RBI and Mobile Black Spot Fund can be best directed to improve ultra-fast broadband availability in rural New Zealand”.

The $50 million Mobile Black Spot Fund is for services in areas without any mobile coverage. While there is good coverage in almost every settlement, there are still gaps, especially along highways and in out-of-the-way tourist locations. Bidder must provide at least 3G voice services. The government says it prefers 4G coverage in the tourist areas.

Adams says: “This is a unique opportunity for national and regional providers to partner with the government to deliver increased connectivity and improved services to rural communities. I encourage network operators regardless of size to put their hand up and be part of this proposal.”

Rural Broadband Initiative part two was first posted at billbennett.co.nz.

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