Executive Summary

One of the significant challenges facing network operators today is the high capital cost of deploying next generation broadband network to individual homes or schools. Fiber to the home only makes economic sense for a relatively small percentage of homes or schools. One solution is a novel new approach under development in several jurisdictions around the world is to bundle the cost of next generation broadband Internet with the deployment of solar panels on the owners roof or through the sale of renewable energy to the homeowner. Rather than charging customers directly for the costs of deployment of the high speed broadband network theses costs instead are amortized over several years as a small discount on the customer’s Feed in Tariff (FIT) or renewable energy bill. There are many companies such as Solar City that will fund the entire capital cost of deploying solar panels on the roofs of homes or schools, who in turn make their money from the long term sale of the power from the panels to the electrical grid. In addition there are no Energy Service Companies (ESCOs) and Green Bond Funds that will underwrite the cost of larger installations.

For further information and detailed business analysis please contact Bill St. Arnaud at bill.st.arnaud@gmail.com.

Wednesday, September 16, 2009

New Zealand Government gets it

The NZ government has taken a major step forward in building a structurally separate FTTh network


The government's overall objective for the ultra-fast broadband investment initiative is to accelerate the roll-out of ultra-fast broadband to 75 percent of New Zealanders over ten years, concentrating in the first six years on priority broadband users such as businesses, schools and health services, plus green-field developments and certain tranches of residential areas.

This government's objective will be supported by government investment of up to $1.5 billion, which is expected to be at least matched by an equal amount of private sector investment, and will be directed to open-access infrastructure.

On 16 September 2009, Communications and Information Technology Minister Hon Steven Joyce announced the final design of the government's broadband investment initiative [link to Beehive website].
Key highlights

Key highlights of the government’ proposal include:

* An open, competitive partner selection process.
* Government investment will be directed to an open access, passive fibre network infrastructure.
* A new Crown-owned investment company ('Crown Fibre Holdings') will be operational by October, which will carry out the government’s partner selection process and manage the government’s investment in fibre networks.
* Crown Fibre Holdings will establish with private sector partners a 'Local Fibre Company' (LFC) in each region, to deploy fibre network infrastructure and provide access to dark fibre products and, optionally, certain active wholesale Layer 2 services.
* The Government is open to national proposals and proposals aggregating any combination of LFC regions.
* Expansion from 25 to 33 candidate coverage areas based on the largest urban areas (by population in 2021).
* LFCs will be required from day one to be open networks facilitating access to their infrastructure on an equivalent basis to all users.
* LFCs cannot be controlled by any party who also operates as a telecommunications retailer.