Speech to TUANZ Telecommunications Day

Thank you for inviting me to speak here today.

Before I start I'd like to acknowledge Dr. Taylor Reynolds from the OECD, the various industry and consumer representatives in the audience and of course TUANZ for organising this event.

The telecommunications industry in New Zealand has had a busy year again since I last spoke at the TUANZ Telecommunications Day. All signs suggest that the coming year will be similarly eventful.

Significant industry investment has continued despite an uncertain economy. Networks have been launched, others have been expanded, and some have experienced a few problems along the way as well.

There have been some exciting new developments - for example the recent Pacific Fibre proposal for increasing New Zealand's international connectivity.

There has also been some serious consideration by industry players of what happens next in New Zealand telecommunications.  I am mindful that the Government's plans are an important factor in those considerations so today I want to provide a recap of our progress to date, and plans for the coming year.

The previous year has been one of a lot of work by the Government in many areas, including our broadband initiatives. I am pleased at what we have achieved so far but it will be in the next 12 months that we will begin to see the first results from these policies.

I'll say at the outset I am not able to talk in great detail about the UFB Initiative because the commercial process of evaluating proposals is ongoing, but I would like to note briefly some of the work which has been done over the last year. I will be able to outline in greater detail the work the Government has done on the Rural Broadband Initiative and where we are with that.

As we move closer to the implementation of our broadband plans I also want to talk about our plans for the ‘demand side' especially the benefits that ultra-fast broadband will bring in the government sector notably to the health and education sectors and the work that the Government is doing to encourage this.

UFB

Make no mistake the Government is absolutely committed to delivering our broadband objectives as key enablers for the delivery of an economic step change. I can think of no better description of the prize we're chasing than Dr Taylor Reynolds description of our broadband plans when he was quoted this morning as saying "it is going to be a foundation for economic growth in the country for 50 years

It will be of no surprise to most of you that the UFB is a key priority for the Government this year as it was last year.

I was very pleased with the level of interest in the initiative as evidenced by the 33 proposals from 18 different proposers received. I look forward to progress being made towards the implementation of one or more of them.

We now have Crown Fibre Holdings set up, working with tenderers and analysing bids. The Government made a deliberate choice to establish a Crown-owned company to evaluate proposals with commercial scrutiny and rigour. I have full confidence in its work and look forward to seeing the outcomes. I understand that you will be hearing from Graham Mitchell, CEO of Crown Fibre Holdings later today.

Officials are considering what policy changes should be made to assist the efficient deployment of broadband infrastructure.

It is apparent that some of the existing mechanisms for access to public land need refining to ensure consistency of approach both across local councils and across utilities. In this respect I expect the proposed Utilities Code under the proposed Utilities Act will have a major role to play in achieving this consistency in the rules for accessing to road reserve land. 

Rural Broadband Initiative

When I spoke to the TUANZ Telecommunications day last year the RBI policy was only just beginning to come together. I am pleased to announce that we are now very close to entering the next phase and the EOI will be announced very shortly.

This is significant progress in a single year for an initiative I am confident that it will be as beneficial to New Zealand as the UFB Initiative.

The RBI will ensure that the whole country is connected to broadband, that everyone will be able to take part in the benefits of a 21^st century telecommunications network

It will help deliver fibre connections to 97 percent of schools across the country and 99.7 percent of students.

And, it will not just be schools that benefit from this initiative. Schools will be a catalyst for some considerable improvements in rural telecommunications.

It is a key requirement of the RBI that 97 percent of New Zealand households and enterprises will be able to access broadband services of 5Mbps or better and the remaining three percent will be able to achieve speeds of at least 1Mbps.

This goal is important. Although it was always the intention of the policy to maximise benefits to the community, when we went out for consultation with this proposal late last year, the key message from submitters was that the mechanisms for ensuring this should be clearer.

We have done this by giving community benefits significant weighting in the assessment of proposals.  In particular, the following factors will be considered:

• the service speed, quality, scalability and coverage that's being proposed


• the rural businesses and key community sites, such as health centres, libraries and marae, which will be connected to improved broadband services 


• any improvements in cellular coverage which will occur  


• and the extent to which the bidder has engaged with local government, communities, businesses, iwi and other community groups. This will particularly involve the extent to which these parties will reduce the level of RBI grants required through, for example, guaranteeing demand, contributing funding or reducing costs.

The focus on these criteria will guarantee that the benefits to the community will be maximised and that 97% target will be achieved.

With regard to the funding of the RBI, the initiative is expected to cost around $300million and will be funded by a $48 million direct government grant, plus $252 million from a new Telecommunications Development Levy.             

The levy is being set up as part of the accompanying TSO reforms which officials are also working on and will collect funding to both pay TSO charges and enable contestable grants for the deployment of rural telecommunications infrastructure under the RBI.

Demand side

Moving to the demand side I would like to speak a bit now about some of the specific benefits that ultra-fast broadband will bring to the health and education sectors and how the Government is involved in these areas. I also want to discuss the initiatives being pursued by the Ministerial Committee on ICT.

Education

Ultra-fast broadband has the potential to open so many doors, nowhere more so than in education.

Video conferencing has the potential to increase substantially the range of courses rural schools can offer and will enable all schools to collaborate with other schools, tertiary institutions and organisations of knowledge storage such as the National Library and Te Papa.

Specialised support such as reading recovery and high demand resources such as Māori medium teachers can also be delivered to rural schools via video conferencing. 

Ultra-fast broadband in schools has the potential to greatly enhance teaching and learning.  Students will be able share information with other Kiwi students and will also have access to the information and experiences of their peers not just here but around the world.

This is why schools are one of our first priorities. And I believe that in the education system, the benefits of greater broadband capacity will be realised very quickly.  After many discussions with early adopters I am confident that this will occur.

In order to unlock these benefits, fibre to the premise will not be enough in itself. Schools must also be able to access the most effective applications and technology must not be seen as new or a bit of an ‘add-on', but rather as a key tool to achieving learning success.

To ensure this occurs, the Government has been working on the possibility of a fully fledged National Education Network. The potential of an NEN is to enable schools to access a wide range of services to support teaching and learning. 

Services provided over an NEN could range from administrative tools to innovative teaching and learning services, off-site data backup, server virtualisation, and access to specialist content providers. 

In 2008 a NEN trial was set up and run by REANNZ in partnership with the Ministry of Education.  The trial included 23 schools and involved procuring connectivity for these schools and connecting them to the KAREN network.

Work has recently begun on extending the NEN trial from the existing 23 schools up to 200 schools. The extended trial will run until at least June 2011 and will provide schools with very fast, unrestricted broadband at 100Mb/s plus.

As well as working on the NEN, the Government is helping schools to become broadband ready in others ways - upgrading schools' internal networks to provide opportunities for teachers and students to make greater use of digital learning technologies.

As part of the Government's initial $34 million boost for broadband in schools, around 100 schools are currently having plans signed off to start building new internal networks in this year, with more to be announced over the course of the year.

This will build on the 480 mainly smaller rural schools that have already been upgraded through previous stages of the School Network Upgrade Project.

We are also working on plans to assist those schools which are not able to be connected to fibre. The Government is going to ensure that these few schools are able to access broadband services via alternatives, such as satellite and wireless. Policy is currently being developed and announcements are expected well before the end of the year.

Health

In the health sector, the objective is to make the health and disability system more adaptable, innovative and forward thinking.

Faster broadband will play an important role as an enabler of new health care delivery models, particularly in Primary Care.  

As in education, developments are already occurring in the health sector which point to some of the specific the benefits that fibre-to-the-premise will bring.

You may have read recently about the national health IT plan that the National Health IT Board has been working with the DHBs. 

The draft plan includes the expectation that district health boards will implement electronic referrals and discharges, as well as set up four regional repositories into which patient data can be fed, in preparation for the launch of shared patient records.

Shared records will contain a summarised history of a person's GP visits, specialist and hospital treatment, test results and prescriptions. The records will be shared among health professionals in an effort to improve the quality and continuity of healthcare.

These are all important developments which will lead to improved care for patients and greater efficiencies.

However, the only way these developments will be able to occur across the country in a coherent, consistent and efficient manner is if health providers are all able to access faster broadband.

The Ministerial Committee on Government ICT

Government invests $2 billion per year on ICT. That's outside our broadband programme.  Therefore we have a responsibility to the taxpayers of New Zealand to make sure we achieve value for money from this substantial investment, and that it achieves productivity benefits across the public sector. 

The Ministerial Committee on Government ICT was established in March 2009 to set the strategic direction of government's use of ICT; set government ICT investment priorities; and gain oversight and understanding of IT investment plans. 

The Committee comprises the Bill English, Tony Ryall, Anne Tolley, Nathan Guy, and myself. 

The Committee is searching for confidence that any spend on ICT investment is driving significant change across government.  Our goal is to improve productivity in the public sector. We are engaging with relevant Chief Executives at an early stage to explain why major ICT projects are being instigated, and if they are proceeding well.  We want to have enough information at an early stage to step in if we are not confident the projects will drive change, or are not being well managed.  And do this we need to work much better with the ICT industry - agencies need to leverage industry skills and experience early on in the project lifecycle.

We also want to ensure that government held data, paid for by the taxpayer, is open to the public and commercial interests for use and re-use, and that government as a whole can more effectively obtain ICT infrastructure services (processing and storage functions) by pooling their purchasing.    

Government is also a major purchaser of connectivity, and being a member of the ICT Ministerial Committee provides me with an opportunity to promote the potential of ultra-fast broadband for the public sector.  The priority focus is on the education and health sectors because of their scale and reach into most corners of New Zealand.

Closing

In closing, I hope I have conveyed today the work that has been done on the Government's broadband initiatives, the excitement I have for the benefits these will bring and some specific areas where we are already seeing developments. 

It is important to recognise the huge challenge ahead of us in this area, but also to acknowledge that it is proceeding well, and will continue to do so if we remain diligent and committed.

I look forward to the seeing the results over the next year and I think that the benefits will emerge quickly.