The Broadband Map of New Zealand and Demand Aggregation
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Common Framework for State Sector Demand Aggregation
Background
There is growing recognition by the public sector, businesses and communities that telecommunications services and infrastructure play an important role in economic transformation, sustainability and social well-being. In this new environment, greater alignment is being sought both within the public sector, and also with local government and the private sector.
There have been major changes in the telecommunications environment in the last decade. The rise of the Internet and of broadband technologies has increased the demand for infrastructure far beyond the level previously needed for basic telephony.
This changing telecommunications environment in New Zealand has brought significant opportunities. However, outside the heart of New Zealand’s largest urban centres, the demand for broadband services has outstripped the supply of world-class services. A number of regional communities have devised local strategies to help achieve both better telecommunications outcomes and broader community goals. For other regional communities, how best to manage their telecommunications future remains a challenge.
Demand aggregation is one strategy that has been successfully employed by communities to improve telecommunications outcomes in their regions. In this context, demand aggregation is about pooling the demand for telecommunications services in a region or sector.
Demand aggregation is a powerful mechanism for government, local government and the business community to stimulate new capital investment in broadband network infrastructure and to promote competition by providing potential investors with greater certainty when assessing an opportunity. The aggregation of demand can result in greater benefits than can be achieved by users entering into individual contracts. Demand aggregation strategies rely on establishing a business case which will attract investment in the provision of new services, or the extension of existing services.
Demand aggregation has been used by Australian and American state governments, European communities and the Canadian government to assist in driving new broadband investment, particularly into areas outside the main central business districts. This overseas experience indicates that combining e-government, e-education and e-health initiatives can be a significant contributor in demand aggregation strategies.
Local government can significantly influence broadband deployment on a regional basis through aggregating its own demand for broadband services. It can also have an impact through supply-side initiatives, for instance, by providing an open access ducting network in association with other council infrastructure projects. The Ministry of Economic Development is working with Local Government New Zealand to establish broadband expertise and toolkits to local government broadband initiatives.
Local business representative groups such as regional chambers of commerce have a strong interest in supporting broadband deployment initiatives, if the result is better broadband services for local business. Achieving alignment of central government, local government and business demand for high-speed broadband services will be an important lever.
The State Services Commission is leading an initiative to align state sector purchasing of telecommunications services to better support demand aggregation initiatives.
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