The Commerce Commission has released its draft report on factors that may affect the uptake of high speed broadband. The Commission is seeking submissions from interested parties on the draft report.“Following the introduction of the Ultra Fast Broadband and Rural Broadband initiatives, the Commission has investigated what factors may affect uptake of high speed broadband services by consumers and businesses,” said Dr Ross Patterson, Telecommunications Commissioner.

“Two main areas have been identified as being important to consumers – costs relating to connecting and using high speed broadband, and the availability of video-on-demand services. Users in rural areas have identified a more fundamental need, which is to be connected to basic broadband.”

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

• Costs related to connecting to the network and using high speed broadband services are seen as critical factors. If these costs are significant, they are likely to slow-down uptake for both consumers, and small and medium sized businesses.
• Video content has been identified as the primary driver of the uptake of high speed broadband services by consumers.
• Rural users have the same appetite for high speed broadband as urban users, but have identified a more fundamental need, which is to be connected to basic broadband. They fear that they could be left behind as New Zealand moves forward with high speed broadband services. This issue has been recognised in the Rural Broadband Initiative and the Government’s five-point action plan for ultra fast broadband.
• Potential issues regarding data caps, backhaul capacity, and internet protocol (IP) interconnection are likely to be resolved by market forces.

This draft report follows the three Issues Papers that the Commission published prior to The Future with High Speed Broadband: Opportunities for New Zealand conference. The aim of the Issues Papers and the conference was to raise awareness of demand side issues: what they are, how they may evolve and how they might affect uptake.

In this draft report, the Commission has summarised the material included in Issues Papers 1 and 3 and included feedback received on the Issues Papers as well as the perspectives presented at the conference.

The Commission is seeking submissions on this draft report. Submissions are due on Thursday 7 June 2012. The Commission intends to publish a final report by 29 June 2012.

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


Background

In June 2011 the Commission initiated a high speed broadband services demand side study to identify and inform on any factors that may affect the uptake of high speed broadband services in New Zealand.

This study is conducted under Section 9A of the Telecommunications Act 2001, which empowers the Commission to conduct inquiries, reviews and studies into any matter relating to the telecommunications industry or the long-term benefit of end-users of telecommunications services within New Zealand.

The Commission’s mandate is to identify and report on the areas highlighted in this draft report. It is for other parties to consider these issues as part of their future work programmes. Where the Commission is aware of issues currently being addressed or planned to be addressed by other parties, it has stated so in this report.

The Commission will use its monitoring powers to continue to observe the market and, where appropriate, it will continue to prepare reports on market conditions, eg, the annual monitoring report and specific monitoring reports, to be released as appropriate from time to time.