Clare Curran says: “We have to do more than better connectivity”. The minister for broadcasting, communications and
digital media was speaking about the digital divide at last month's Tuanz Rural Connectivity Symposium in Wellington.
Curran names ‘closing the digital divide by 2020‘ as one of her two big goals. The other is for technology to be the
second biggest contributor to GDP by 2025.
Both are fine goals. Neither will be easy.
There are at least two types of digital divide. The first is geographic. To use Curran’s words, that issue is one of better connectivity. People in rural areas don’t have the same easy access to communications networks as people who live in towns.
Blame economics. The cost of getting fibre to a city dweller is lower than the cost of connecting someone living in a
Both types of customer pay the same price for a connection if they are on the regulated UFB fibre network. This means
people living in easy-to-connect areas subsidise those elsewhere. Almost no-one complains about this subsidy. It’s a
step towards bridging the digital divide.
And anyway, a flat rate simplifies billing for service providers. Billing is expensive, so simple bills help keep costs
Drawing the dividing line
By the time the UFB project
completes, 87 percent of the population will be able to connect to fibre. while the other 13 percent are more at risk
of being the wrong side of the digital divide, they won't all have second rate connections.
While the 87 percent cut-off point seems arbitrary, it is a reasonable place to draw a line. At least for now. Beyond
that number each extra fibre connection gets more expensive to build.
Theory says that some point fibre isn't economic. It's not clear where that point is. When our ancestors built the
copper phone network they managed to cover 99 percent of the population. We weren't richer in those days, if anything
the job was harder. So the choice about where to draw the line is as much about social priorities and politics as
Beyond 87 percent
One day we may stretch the network further than 87 percent. There are already plans for still more fibre. Getting to 90
percent coverage wouldn’t be economic unreasonable. Getting to 100 percent would be,
As things stand there are more cost-effective ways of reaching the most remote 13 percent. Most involve wireless. That’s
the approach favoured by the government subsidised Rural Broadband Initiative
The problem is that wireless technologies are not as good as fibre. They offer slower speeds, are contested and they not as reliable. They are, in theory at least, cheaper. It costs less to beam radio waves across paddocks than
to build fibre lines over them.
Contested means that users on a wireless network share bandwidth. If a lot of people are online at the same time
everyone’s speed can drop. In contrast UFB fibre is uncontested. Contracts between fibre companies and the government
Another problem with wireless is there is less network capacity. To get around this service providers impose data caps
on users. Most fibre connections have uncapped plans. Wireless users get a set amount of data each month.
Although some fixed wireless data plans are generous, life is not carefree when you have to limit, say, your television
viewing towards the end of the month to be sure of having enough data left for other uses.
Rugby World Cup
These issues could come to the fore during next year's Rugby World Cup. Spark and TVNZ won the broadcast rights. Spark
intends to stream games, the technology is like Netflix. We love the game nationwide, but Rugby's heartland is rural New
Zealand. Will fixed wireless networks cope when every connection on a tower is streaming high-definition television?
Spark doesn't say so in public, but some insiders have voiced fears about how this might go.
Wireless plans often cost as much as fibre plans. They offer less. Not a lot less. Yet on a like-for like basis they are
more expensive than fibre plans. The extra cost may be an annoyance, but it doesn’t put a customer on the wrong side of
the digital divide.
There’s a handy proof for this. Spark offers fixed wireless to customers everywhere on its network: rural and urban.
Thousands of city dwellers have chosen fixed wireless.
If fixed wireless was dreadful you'd hear more about it. There would be a lot of angry people. Sure, there are some
unhappy fixed wireless broadband customers. Yet citizens aren't marching on Spark's headquarters with pitchforks and
burning torches. For many people it's not bad.
Fixed wireless broadband may be inferior to fibre, but people who have it are on the right side of the digital divide.
Not there yet
It isn’t quite that simple. There’s a limit to the number of connections a wireless tower can accommodate. This means
its possible there are some rural users who can’t get a connection because their local tower is full. Carriers can add
capacity, but it may not happen immediately. A handful of people may miss out.
A bigger issue is that fixed wireless broadband
doesn’t reach all the last 13 percent of the population. Not yet. The exact number is hard to gauge. At the Rural
Connectivity Symposium, someone said there could be as many as 100,000 homes still out of reach of RBI. That’s about 5
percent of total connections. I’m afraid I didn’t make a note of who said this.
Moving goal posts
There's another aspect to this. A decade ago when the Rural Broadband Initiative was being set up, the aim was 5Mbps.
That's enough for web surfing, email and movie downloads. Today's acceptable broadband threshold is the 30 to 40Mbps
needed to stream HD video. RBI towers can and do deliver these speeds. Wireless internet services providers do a
terrific job getting connectivity to remote places.
Today's rural network performance is way past the 2009 test of acceptable broadband. Also, thanks to the wisps, today's
broadband network reaches further into valleys and outlying areas than the 2009 RBI architects expected.
Yet the question mark hanging over the Rugby World Cup tells us there is still a rural-urban divide. Today the bar isn't
5Mbps or even 40Mbps. It's "is there enough broadband for people in rural New Zealand to enjoy the Rugby World Cup on an
And that's the rub. The urban-rural digital divide is a moving target. Some rural New Zealanders will always feel they
have second-rate broadband right up until the fibre network reaches them. Whether that's reasonable or economic is a
political matter, not one for the industry. Are we as a country willing to spend what it takes to get fibre as far as we
managed to spread those copper lines?