The $24 million the Government has set aside to help councils build community broadband services looks likely to go unspent, as no councils have so far qualified for the scheme.
The Broadband Challenge, announced last November, was meant to provide the $24 million as seed funding, to improve the availability
and quality of broadband internet access by establishing up to 15 urban fibre networks by 2009.
Tony Van Horik, who advised three councils on their submissions, said yesterday that local bodies struggled to put together business cases because of a lack of direction from the Government about what was needed to fulfil the criteria.
The Government expected councils to put together their submissions in six months, by the deadline of May 16.
Van Horik, the managing director of telecommunications consultancy Amos Aked Swift, said this was not enough time for councils to build a proper plan which involved securing partners, access to existing fibre networks, and commercial customers who would use their alternative networks.
To meet the criteria, applicants had to prove they would be able to provide a minimum 1 gigabit per second connection - about 300 times faster than a 3.5 megabit per second service now offered by internet service providers.
Schools, universities, hospitals and libraries had to be included in the network's coverage area. And councils had to prove it would meet a community demand not met by existing commercial providers.
The Government created the Broadband Challenge because it doubted Telecom's ability to provide faster broadband services to rural and poorly served communities.
Communications Minister David Cunliffe said last year that the strategy was a key part of the Government's drive to transform the economy.
But the Government has not made any announcement on the applications for nearly two months.
A spokesman for Cunliffe said the projects were being "processed" but did not respond to questions about whether any submissions had been successful.
"A number of applicants for urban fibre had difficulty in meeting some of the criteria set down for funding," the spokesman said.
"The full applications were always anticipated as being relatively complex and funding support was provided towards completion of these applications."
The initiative attracted 35 initial applications, and 13 were approved for the second stage.
These included the West Coast Development Trust, North Shore City, Hamilton City Council, Waikato Trust, Auckland Regional Council, Smartlinx 3, Christchurch Broadband Ltd, Nelson Marlborough Ltd, 2020 Communications Trust Tangimoana, Tuhoe Education Authority, and the Waikato's Local Authority Shared Services.
Van Horik said most councils would have struggled to produce a viable business plan in six months.
Most local bodies did not understand how a telecommunications company worked, so would struggle to attract the confidence of potential customers, he said.
On top of that, the Broadband Challenge lacked clear direction from Government.
The Auckland Regional Council said it had put in a "scoping" document to the Government on the Broadband Challenge.
"We are keen to pursue the initiative and look forward to the opportunity to develop a full programme," said spokesman Mark McLauchlan.
David Cunliffe
The $24 million the Government has set aside to help councils build community broadband services looks likely to go unspent, as no councils have so far qualified for the scheme.
The Broadband Challenge, announced last November, was meant to provide the $24 million as seed funding, to improve the availability
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