Draft Industry Guidelines

Background

There is increasing evidence that accelerating the deployment of advanced broadband infrastructure will lead to substantial economic gains for New Zealand. At the recent Digital Summit 2.0, Ministers Cunliffe and Cullen both challenged the private sector to come up with specific, concrete proposals for further stimulating investment and noted the government was open to having some form of involvement, if appropriate.

Following expressions of interest from the industry, the Minister for Communications and Information Technology would like to initiate a facilitated industry dialogue to identify and assess a range of ideas for promoting increased levels of investment in New Zealand's telecommunications infrastructure.

Government Objectives

As Minister Cunliffe noted in his opening address to the Summit, the government is particularly interested in possible mechanisms to address four aspects of New Zealand's broadband infrastructure:

• accelerating the deployment of fibre-to-the-node for residential users;
• accelerating the deployment of fibre-to-the-premises for businesses (particularly through the roll-out of urban fibre loops);
• improving rural broadband infrastructure; and
• improving the country's international connections.

The government is open to suggestions from the industry on how to best achieve its objectives in these areas and is willing to consider a range of policy mechanisms to support those ideas.

This process should ideally focus on how to facilitate commercial solutions, with the provision of government funding and the enactment of legislation only being considered as options of last resort. Should the government provide any seed funding, it would likely be tied conditions along the following lines:

• open access or non-discriminatory access to infrastructure;
• contestability for funding;
• leveraging substantial private sector funding;
• minimising the risk of crowding out or duplicating private sector investment, as well as taking into account unintended impacts on the deployment of new technologies; and
• targeting areas that will have economic growth spin-offs, although the government may wish to tie some funding to meet its social objectives.

Industry Dialogue on Broadband Investment

Government Expectations

Although the government has highlighted the areas it views as a priority for investment, this facilitated process is designed to be industry-led and, as such, the scope of discussion is up to the industry to determine.

Amongst other outcomes, the industry may wish to consider identifying:

• some "quick wins" that the industry, local government and central government can take in the short term;
• opportunities where the industry can improve investment incentives through greater sharing of assets and costs;
• opportunities for co-investment within the industry and in partnership with government;
• infrastructure gaps where government funding may be most usefully focused; and
• some longer term steps (potentially including legislation) that the government can advance to improve the investment environment.

It is hoped that participants will agree to a free and frank discussion on key issues on a "without prejudice" basis.

Deliverables

This is likely to be an iterative process and it is recognised that it may not be possible to establish consensus within the industry on some of the more contentious issues. Accordingly, it would be premature to set any concrete expectations around timing for any outputs.

How to Engage in the Process

Stephen Tindall (Growth Innovation Advisory Board) and David Skilling (New Zealand Institute) have both expressed a willingness to be involved in working with the industry in examining suggestions for improving the investment environment. One of these two could act as a Chair in facilitating discussion and providing related advice to government.

The success of this process will depend on ensuring there is appropriate representation from a wide range of relevant stakeholders, including network operators, the investment community and user representatives. Interested parties are asked to register their interest in engaging in this process with the Ministry of Economic Development. While it would be useful if industry could initially engage through this facilitated process, stakeholders should not feel constrained in their ability to independently approach the government with their suggestions.

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