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The Commerce Commission has today released its final report on factors that may affect the uptake of high speed broadband.

Following the introduction of the Ultra Fast Broadband and Rural Broadband initiatives, the Commission undertook a study to identify what factors may affect uptake of high speed broadband services by consumers and businesses. The aim of the study is to raise awareness of demand side issues for those in the industry and the public.

“The intention of the study has always been to identify factors which might slow down the uptake of high speed broadband by consumers and businesses so relevant parties can make informed decisions,” said Dr Ross Patterson, Telecommunications Commissioner. “The Commission will report on market developments, including UFB uptake, data cap changes, and the range of services offered over UFB, as part of its monitoring functions.”

“Following feedback from interested parties, we are still seeing two main areas identified as being important to consumers – costs relating to connecting and using high speed broadband, and the availability of video-on-demand services,” said Dr Patterson.

The key points that have emerged in the course of the study are:

•             The costs related to connecting to the UFB network and using high speed broadband services have been identified by various parties during the study as critical. As these costs appear to be significant, they are likely to slow down the uptake for both consumers and SMEs.

•             Video content is likely to be the primary driver of consumers’ uptake of high speed broadband services over the next few years. The rate of UFB uptake is likely to be higher if there is a diverse range of video on demand options available to consumers. Currently, there are limited online video on demand services in New Zealand compared with many other countries.

•             Potential issues relating to data caps, backhaul capacity and IP interconnection are likely to be resolved by market forces.

•             Rural users have the same appetite for fast broadband as urban users, but have a more fundamental need, which is to be connected to basic broadband. They are concerned that they could be left behind as New Zealand moves forward with high speed broadband services. This issue has been recognised in the RBI initiative and in the five point government action plan for faster broadband.

In submissions, some parties noted the need to revisit the study in the future. The Commission will include UFB uptake, data cap changes, and the range of services offered over UFB in its future monitoring reports.

The report follows a draft report and three issues papers that the Commission published prior to The Future with High Speed Broadband: Opportunities for New Zealand conference.

You can find a copy of the report on the Commission’s website: www.comcom.govt.nz/high-speed-broadband-services-demand-side-study