Differences In Approach – Urban And Rural
The key differences between the urban and rural funds are outlined in the table below. These differences are the reason for having separate criteria and weightings for the individual urban and rural funds. It will be the responsibility of the applicant to determine which fund is appropriate for their proposal.
Your feedback is welcome on the differences outlined in the table.
| Urban Criteria |
Rural Criteria |
| For areas that have terrestrial broadband available currently or are likely to in the near future (e.g. within Telecom's cabinetisation plans). |
Only for areas that have no current or planned terrestrial broadband (with an appropriate service defined as a minimum of 1Mbps). |
| The absolute requirements in the criteria are more onerous (e.g. at least 1:1 funding but with preference for higher private co-investment, requiring wholesaling of passive infrastructure, open access requirements). |
The absolute requirements in the criteria are less onerous (e.g. open access requirements are not absolute where commercially non-viable). |
| Criteria include quite specific percentage weightings. |
No percentage weightings in criteria, just ranking order. |
| While some projects may be commercially viable in the long-term, government funding will accelerate the deployment and will change the nature of the investment (i.e. to require wholesaling of passive infrastructure) to support government's objectives. |
Projects are unlikely to be commercially viable without funding. |
International
The priority for government is to see the deployment of a further trans-Tasman cable to improve the resilience of New Zealand's international communication links and to improve competition to exert downward pressure on the price of international bandwidth. The government considers there is merit in acting as an anchor tenant for the deployment of a second trans-Tasman cable by purchasing sufficient international bandwidth to meet the future needs of the research and education sectors. The government notes that private sector activity is occurring and it intends to monitor these developments. A process for implementation is being developed in parallel to the Broadband Investment Fund.
Demand Aggregation
In addition to providing seed funding to target specific infrastructure gaps, a complementary initiative is underway to better leverage public spending on broadband. There are opportunities for greater coordination in the purchasing decisions of public entities (particularly in the health and education sectors) to further stimulate investment and to achieve better value from advanced broadband services.
The government plans to spend at least $160 million over the next five years on connectivity in the health and education sectors, including through the KAREN network, and through the GSN.34 In order to effectively leverage government expenditure across the state sector, and to promote the uptake of services across newly deployed high-speed urban networks, the government is prepared to make available money from the Broadband Investment Fund to support demand-side initiatives (to be spent in conjunction with Broadband Investment Fund initiatives). Government is considering a number of policy mechanisms in this area and will announce decisions later this year.
Process For Allocating Funding
Process Structure
The diagram below illustrates the proposed process structure for the Broadband Investment Fund. It is focussed on providing a fair, consistent and robust decision-making process while maintaining the ability to provide assistance to applicants that require it.
The process structure is characterised by the following layers:
Applicant Support
- Applicant support will be structurally separated from the decision-making process and be at a level that is appropriate to the applicant's needs.
Analysis and Recommendation
- Independent evaluators will assess applications against the criteria and provide reports to the Broadband Investment Sub-Group of the Digital Strategy Steering Group. The Sub-Group will be a government-convened group with the appropriate mix of technical, policy, legal and financial skills.
- The Broadband Investment Sub-Group will make recommendations to the Minister for Communications and Information Technology (Expression of Interest stage) and Cabinet (Full Application stage).
Policy and Decision-Making
- Decision-making by Ministers will be supported by robust technical and effectiveness advice, informed by stakeholder input.
Evaluation and Audit
- The structure supports the effective administration of the Fund, consistent with Office of the Auditor General and Treasury guidance.
- An independent process audit will be carried out at the end of each funding year to ensure that processes have been implemented appropriately and that decisions made are robust, fair and consistent.
Digital Development Forum and Council
- The role of the Digital Development Forum will be to develop strategic priorities and advise Ministers on achieving our digital potential. The Council will respond to the issues and priorities set by the Forum, by developing a detailed work programme.
Application Process
It is proposed that applications for funding under both the urban and rural funds will be determined through a two-stage process:
Expressions of Interest (EOI) Stage: Applicants seeking funding will be required to submit a preliminary application and outline supporting documents. The purpose of this stage will be to determine which Applicants will be invited to submit a full application. Applicants might also be able to access a small amount of funding to support development of a full business case for the later approval stage. For the Broadband Challenge Fund, urban applicants were able to apply for a $50,000 grant to assist with the development of applications. A similar funding arrangement for the Broadband Investment Fund will be examined.
Applicants will have to demonstrate their eligibility against the Broadband Investment Fund Eligibility Criteria (attached), and demonstrate a reasonable case that they will meet the Broadband Investment Fund investment criteria at the Full Application Stage.
It is expected that this first stage process will be more streamlined and simplified than the process followed for the Broadband Challenge Fund.
Full Application Stage: It is proposed that Applicants who are invited to submit a Full Application will then submit a comprehensive business case for their project. The Full Applications will be assessed against the criteria and the level of funding (if any) will be determined at this stage.
Applicants will be required to demonstrate that they meet the eligibility criteria and demonstrate how they meet the Broadband Investment Fund Assessment Criteria. The amount of funding and any conditions will be determined at this stage.
Applications for both funds will have to meet specific requirements regarding their content and format. Templates and application forms will be released with the final criteria in an effort to reduce administrative burden for Applicants.
The assessment criteria for the Full Application Stage are available and should be carefully considered before making an application at the EOI stage.
Being unsuccessful at either the EOI or Full Application Stage will not preclude Applicants from submitting revised applications in subsequent rounds.
The management of the application process will take account of stakeholders' feedback and experience gained from the Broadband Challenge Fund and Community Partnerships Fund announced and implemented under the 2005 Digital Strategy.
Decision-Making Process
EOI stage: EOIs will be assessed by the Broadband Investment Sub-Group of the Digital Strategy Steering Group against the Broadband Investment Fund relevant criteria. The government-convened sub-group will consist of an appropriate mix of technical, policy, financial and legal skills.
It is proposed that the sub-group will provide recommendations to the Minister for Communications and Information Technology, who will make the decisions under delegated authority from Cabinet.
Full application stage: It is proposed that Full Applications will be assessed by independent evaluators based on the Broadband Investment Fund Assessment Criteria for each of the priority areas. The independent evaluators will provide a report to the Sub-Group, which will review the report and provide recommendations to Cabinet. Cabinet will be responsible for making the final funding decisions.
Indicative Timetable
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