Slow and expensive rural broadband is highlighted as a pain point in an MBIE briefing for Media and Communications Minister Melissa Lee.

The bim (briefing for the incoming minister), which focuses tightly on telecommunications, says
the urban Ultrafast Broadband (UFB) network is “world-class”, but “Despite substantial government investment, rural New Zealanders experience connectivity services that are slower, less reliable and more expensive than urban New Zealanders.”

It says that currently there is “no sustainable funding to address this urban-rural divide”.

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What can Lee do to improve rural broadband? The ministry’s recommended action is greyed out as “confidential”.

The bim also highlights “resilience concerns”, saying “the recent North Island severe weather events demonstrated the vulnerability of telecommunications networks to natural disasters.”

The major telcos have all touted partnerships with Elon Musk’s Starlink and other satellite broadband providers as a way to provide service to remote areas and cope with future events on a par with Cyclone Gabrielle.

But the bim says, “While the expansion of satellite broadband services has gone a large way to address coverage gaps, these services tend to be at least twice the price of urban fixed-line fibre services. Prices for fixed wireless broadband are also significantly higher in rural areas than urban areas.”

Starlink currently pays a token amount for its six NZ ground stations. The bim suggests a “modernisation” of the regulatory framework that would include a review of fees (details of which are redacted).

NZ-based players who’ve previously complained to MBIE that Starlink and its peers escape the costs and logistical requirements of NZ regulation, tilting the playing field, will like the section of the bim that says, “These new satellite services raise questions about the jurisdictional reach of the Telecommunications Act on issues like Telecommunications Development Levy liability and the application of consumer protection regulation. There are also questions about the coverage of the Telecommunications (Interception Capability and Security) Act 2013.”

MBIE also recommends that Lee continue the Memorandum of Understanding that gave a pan-iwi entity 20 per cent of the 5G spectrum allocated in 2022, and provided for 20 per cent of future spectrum allocations, at no cost. The arrangement – which sidelined but did not settle a Treaty claim on airwaves – is described as “pragmatic”.

Technology Users Association of NZ head Craig Young said, “Tuanz is pleased to see that the briefing includes strong wording around the need to continue to focus on improving connectivity outside the urban fibre footprint. We know that if investment is slowed then the inequity issues will simply worsen and we see no clear direction in government activity in this space at the moment.”

Spark, One NZ and 2degrees say they are taking steps to boost resilience and coverage, from satellite partnerships to spend at least 24m-plus each, beyond their original budgets, to expand 5G coverage, while Chorus has created two “indestructible” fibre exchanges that can be trucked to disaster zones.

More broadly, Chorus continues to lobby for more fibre. The bim also notes Chorus’ suggestion that the UFB be extended so that some 40,000 rural households get fibre – which the firm has touted as a path to faster and more resilient broadband. The move would take UFB coverage from 87 per cent to 90 per cent of the population. MBIE’s thoughts on that play are redacted. The ministry does say that any extension beyond 90 per cent would “require more government investment.”

MBIE also says that a review of NZ Post’s Deed of Understanding is required by June 2024. It notes that frequency of delivery will be on the table, “against a backdrop of a rapid decline in mail volumes [and] in parallel, the rapid rise of e-commerce that has seen a dramatic expansion in demand for parcel services” but does not make any recommendation around the frequency of delivery.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.