I hope the Covid inquiries set up to scrutinise what the government did during the pandemic heap appropriate praise on one initiative that helped families. That was the Ministry of Education’s steps to provide free broadband to households with a school-age child that didn’t have internet. As kids were locked down at home, broadband use surged in households that could afford a high-speed connection. Kids who had gone to school or the local library to access the internet, now had the opportunity to stay connected at home. Devices were supplied.
Unfortunately, that scheme was scrapped a couple of years ago, leaving Skinny’s Jump service the only real low-cost option for internet access. At $5 for 35GB of data, delivered via Spark’s mobile network and bundled with a modem, it’s a good deal for eligible users that can be renewed up to six times a month for more data usage.
More than a decade ago, taxpayers contributed to the creation of our gold-plated ultra-fast broadband network, which now reaches 87% of the population. Providing low-cost broadband over that network makes sense, because it offers better performance than connecting via a cell tower.
But broadband giants Spark and One NZ have been reluctant. Margins are thin in the broadband market, where entry-level fibre plans are priced from $60. They don’t want to cannibalise their customer base.
Now, two small internet providers, Vetta Group and Prodigi, have done a deal with fibre network operator Chorus to slash that monthly fee by more than half. Chorus agreed to cut wholesale fees that internet providers pay per connection for what is currently a trial.
It means low-income families can now pay $26 for a 100Mbps (megabits per second) connection with unlimited data transfers, or $30 for a 500Mbps connection. A Wi-Fi modem is included in the plan.
Vetta’s Local Linkup offering, and Prodigi’s equivalent Whānau Link service, needed a cheap way to determine eligibility for the low-cost plans. They’ve used the address locator function available on most ISP websites. It determines whether you have access to the Chorus fibre network but also establishes whether the resident lives in a Kāinga Ora dwelling, or one provided by the Tāmaki Regeneration Programme, which is aiming to build 10,500 homes over the next 20 years for low-income families. Households with a child attending a school with an equity index of 490 or higher are also eligible to apply for cheap broadband, as are those with a community services card.
New Zealand’s digital divide is big. While 64% of households don’t have a fibre connection, about 130,000 homes, or 10%, have no internet access at all, according to data from Stats NZ and the Commerce Commission. These deals still involve a monthly payment, but at $26, that looks a lot more affordable, while the $30 plan offers the same connection I pay three times as much for.
What’s in it for Vetta and Prodigi? These are small South Island-based ISPs that make most of their money delivering internet services to businesses. So plans for low-income households won’t undermine their businesses.
What it does, according to Vetta founder and “chief tinkerer” Shaun Fisher, is promise to get more families engaged in the digital world. He says demand so far has exceeded expectations.
Due to the low cost, these plans lack tech support. While fibre connections are set and forget these days, it will require some volunteer support from digital equity groups and the likes of Age Concern to help some families out. That’s an opportunity for enthusiastic techies to lend their skills.
The ISPs are trialling the services until the end of September and will then decide whether to keep offering them. I hope it’s a raging success and other ISPs join the low-cost broadband movement.
More information: Locallinkup.nz, Whanaulink.nz
