Juha Saarinen: Watchdog’s rural broadband rules fine for big guys, not for small Kiwi firms

Installing fibre broadband can be complex but now providers in rural and remote areas have a new challenge. Photo / Stuart Munro

OPINION

Internet providers in rural and remote areas have a new challenge to add to their already-full plates of difficult-to-do stuff: regulation.

The Commerce Commission is undertaking a very comprehensive Rural Connectivity Study (RCS), as part of work to monitor competition in the telecommunications market, as it is legally required to do.

“We want all New Zealanders to be able to make confident choices to stay connected in ways that fit their situation, lifestyle and business,” the commission’s telecommunications manager Ben Oakley said.

Compared to cities and towns, less is known about rural area broadband options.

“This work is focusing on demystifying what services are available, where they are offered, and who they are offered by,” Oakley said.

“We are also interested in the pricing of different technologies, the performance of them, and what the consumer experience looks like - in particular for those in rural areas who lack the choice and competition that those in urban areas have,” he added.

It is a major piece of work by the commission which, when completed, should give everyone from customers to the providers a much better picture of rural broadband than we have currently.

The problem is there’s a lot of data to be gathered for the commission, and smaller providers are baulking at the effort required.

Wispas of concern

The Internet Service Providers Association of New Zealand and the Wireless Internet Service Providers Association (Ispanz and Wispa respectively) are expressing concerns with the work required to provide the information.

It is mandatory under the notice issued by the commission for providers to gather the information and share it with the watchdog.

“There are significant resources required to complete once the full requests come through, the cost to operators is considerable, and comes at a time when input and business costs are already inflated,” Wispa chairman Mike Smith said.

Unlike Elon Musk and Starlink, smaller providers often do not have the staff required to collate the information demanded - or attend Heidi Klum's Halloween parties. Photo / AP

Ispanz chief executive David Haynes said one of its members estimates it will take 80 to 100 hours of internal resources to do this work. “That’s over two full working weeks for a highly-skilled person with an already-fulltime job in a small business.”

Wispa and Ispanz support the commission’s study, but say the volume and level of data requested is “overkill” and “unwarranted”, especially on what they feel is relatively short notice.

The commission’s data-gathering is designed to uplift its broadband monitoring and reporting. It will be an annual exercise.

Both associations the commission to compensate their members for the cost of collecting the information, or contribute towards the expense, but that has so far not happened.

However, smaller providers often do not have the staff required to collate the information demanded, if indeed it has been collected in the first place. Bigger telcos are captured by the RCS, and yes, SpaceX’s Starlink has also been issued with a Section 98 notice by the commission.

We’ll see how the RCS goes in the end, but further discussion around practicalities of collecting the information seems warranted. Maybe a third-party could be engaged to collect the data?

There is an element of controversy associated with the RCS. The commission wants the study to be high resolution, and will request end-user location information.

“The geographic location of end-users is essential because we want to compare availability of services and availability of technologies. Aggregation into meshblocks [the 57,539 statistical areas New Zealand is divided into], for example, reduces resolution and when you then compare two datasets, where that type of aggregation has been applied, you lose accuracy and are in danger of inaccurate conclusions,” the commission said.

While the commission said the actual connection at an address will not be visible in maps and analysis, under certain conditions it may be possible to request the study data under the Official Information Act (OIA).

The commission has put in place sensible safeguards with high thresholds, but says it cannot commit to never releasing the data, because the OIA is the law of the land.

Rural broadband was always going to be the tricky part of the fibre-to-the-premises equation.

A telco industry source, who wished to remain anonymous, suggested the reason the Ultra-Fast Broadband (UFB) fibre project happened was because the Government at the time split the rollout into two.

If the UFB project had attempted to provide coverage in as many places as possible in one go, the cost would’ve been a politically-unpalatable $10 billion or more.

With the UFB completed, there’s political will and acceptance now that rural areas can’t be left behind when it comes to necessary network connectivity, and the money needed looks less daunting. The RCS should be a useful tool for that, but it looks set to be a point of pain for smaller providers.

Juha Saarinen is a technology columnist for the New Zealand Herald. He covers technology issues in depth and joined the Herald in 2014.