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Minister revises Ultra-Fast Broadband tender

01 Jul 2010

Communications and Information Technology Minister Steven Joyce has made changes to the Ultra-Fast Broadband (UFB) bid that aim to make the business model for local fibre companies more appealing and pull in additional private sector investment.

“Following the extensive feedback that Crown Fibre Holdings (CFH) has received from the telecommunications industry and UFB Initiative respondents after receiving its first round of bids in the UFB tender process, certain revisions to the UFB model have been agreed by Cabinet this week,” said Joyce. “These amendments will further improve the business model for local fibre companies and facilitate additional co-investment from the private sector,” he added. Respondents to the initial invitation to participate said they’d support a move to offering open access at Layer 2 of the ultra-fast broadband network as well as Layer 1. Service providers, who would purchase the ultra-fast broadband services and in turn selling them to consumers, support the move.

Joyce continued, "Careful consideration has been given to the issue of open access. It is important that the open access model supports competitive outcomes, and that it is both suitable and attractive to the industry and private-sector investors.” The offer has been revised to ensure that ultra-fast broadband will be provided at both Layers 1 and 2 on an open access basis. The government is also changing the model to “avoid burdening infant businesses investing in emerging technologies with inappropriate regulation”.

Prices will be set by CFH through negotiations following the tender process and investment partners will be recommended by October.