Government-funded fiber broadband: Not as straightforward as it sounds

[Commentary] As public interest groups continue to press for government-run fiber networks here in the US, it is instructive to look to a country that has already gone down that path: New Zealand. It has been seven years since the New Zealand government promised to cover around 25 percent of the cost of deploying 100 Mbps-capable fiber-to-the-home (FTTH) network reaching 75 percent of the population by the end of 2019. The first lines were laid over four years ago, so the project is technically around its halfway point. However, all has not gone according to plan.

Demand-side troubles: People don’t seem to want superfast fiber. The combination of low uptake of ultrafast connections and low uptake overall confirms that there has not been a pent-up demand for fast connections, even in less densely populated provincial areas. Supply-side issues: Government involvement warps prices, investment, even ownership.

[Bronwyn Howell is general manager for the New Zealand Institute for the Study of Competition and Regulation]