Five big UFB turn-offs

closeThis article could be out of date, as it was published 2 years 5 months 2 days ago.

Xero CEO Rod Drury is something of a fibre broadband champion and early adopter. Not content to wait for the government-backed Ultra Fast Broadband network to roll into his neighbourhood, Drury has already fibred-up his Hawke’s Bay home using another provider. He’s even offered a blog post showing off the impressive connection speed he’s getting and what he’s doing with it.

But while Drury may be doing everything he can to live the fibre-to-the-home dream, he’s still grumpy about what he’s getting. The problem, he says, is that slow international connectivity is spoiling the fibre broadband experience.

As one of Pacific Fibre’s cofounders, Drury has put his money where his mouth is, backing a business aiming to increase competition and the capacity of our broadband links from the outside world.

Even so, international connectivity is just one of at least five major issues that threaten to reduce customer enthusiasm for UFB, even if it’s not one the Commerce Commission is too worried about.

In a draft report on UFB uptake released this week, the Commission said it ‘does not anticipate that international transit will be a major issue restricting the uptake of high speed broadband services’. Drury (and others) beg to differ.

A second issue for UFB – and one the Commission agrees is a concern – has to do with video content. Video on demand will be a key driver of consumer interest in UFB, and there are issues around access to content rights that need to be sorted out. The Commission is currently investigating Sky TV’s contracts with ISPs and the impact they may be having on other pay TV providers’ access to the market.

A third issue, also identified by the Commission, is the cost to residents of connecting their homes to the UFB network. Chorus and the other companies contracted to deploy the network must provide ‘standard connections’ free of charge, but it remains unclear how many homes fall into the ‘non-standard’ category, where connection points are beyond the specified distances from the road.

Fourthly, the Commission has recognised that rural communities risk receiving inferior access to broadband, something others have labelled the ‘urban-rural divide’.

Rural users ‘have the same appetite for high speed broadband as urban users’, the Commission says, but they ‘fear that they could be left behind as New Zealand moves forward with high speed broadband services’. The Government’s Rural Broadband Initiative is intended to address this concern, but critics say it will deliver a suboptimal speeds.

Finally, there is the issue of data caps. The Commission does not accept it is a problem, saying pricing plans have been getting cheaper, ISPs have been increasing caps, and ‘competitive pressures’ mean those trends will continue. For many consumers, however, the cost reductions and increases in data limits have not been happening fast enough.

With $1.35 billion of taxpayer investment on the line with the UFB, it is vital the network becomes an asset used by as many businesses and consumers as possible. These five big stumbling blocks to that happening need to be addressed quickly and forcefully.

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