Can the most rural 25% of NZ really get fibre for $200 million

The Internet Party has a policy to extend fibre from the current proposed 75% of NZ homes to 97.8% of NZ homes. They claims this can be done for a Government investment of $200 million.

I am a supporter of getting faster broadband out to rural NZers. Fibre is the best broadband technology, and is the preferred option – if affordable. But I have very significant doubts that you can connect up most of rural NZ for anything close to a $200 million subsidy.

First of all consider that $1.5 billion is barely enough to subsidise fibre to the most urban 75% of NZ. So if the most urban 75% needs $20 million per 1%, it defies belief that the rural 23% could be done with $8.7 million per 1%.

Most reports say rural fibre costs six times as much as urban fibre.

How much would it cost? This would mean laying fibre down almost every road in NZ. We have over 93,000 kms of road. Fibre was estimated to cost by the NZ Institute in 2007 to be around $150,000 per km.

A report by Dr Murray Milner on fibre costs also estimated open trenching costs of $120,000 to $150,000 per km (and up to $600,000 per km in very difficult areas)

That would be be a cost of $14 billion to get fibre down every road in NZ. Now I know the policy is only 97.8% but you get the general feeling that a $200 million subsidy will not get you anywhere near 97.8% coverage.

I think fibre can be extended out beyond 75%. But there comes a point at which the cost is too prohibitive, and satellite and wireless technologies are a better investment.

The 75% target for fibre is (from what I can tell) the most advanced in the world. When complete in a few years, I don’t think any other country will have fibre available to such a high percentage of the population. So lets not think 75% is bad – it is top of the class. Now again, I think we should debate what to do with the remaining 25%. But a policy that says you can get 98% of the population connected up to fibre for a mere $200 million extra subsidy is not credible – by a long shot. You can’t just wave a wand.

If the Internet Party did want to credibly contribute to the debate, then maybe they could fund an independent study of what the costs are of various broadband technologies to the most rural 25%, and then we could focus on what is the best solution.

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