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Idealog—in the ideas business

SMEs say rewiring costs a deterrent to broadband upgrades

UFB is supposed to usher in a new age of better business – but almost half of SMEs say the cost of rewiring their premises is a barrier to upgrading to faster broadband.

A Commerce Commission paper found that 66 percent of consumers surveyed thought rewiring posed a significant barrier to the uptake of faster broadband connection and for almost half of SMEs sampled, rewiring would be a definite barrier if they were unable to work while rewiring took place.

Rewiring costs and the need to upgrade IT equipment were concerns for 68 and 73 percent of businesses surveyed, while 60 percent were worried about exceeding data caps through increased usage and 80 percent about increases in ongoing monthly costs.

The commission said that while it had been suggested that re-wiring of premises could be avoided by using wireless networks, wireless networks do not provide reliable support for high speed broadband at the moment.

Chorus and local fibre companies are not responsible for home wiring; they are only responsible for getting the fibre to the premises.

Home owners are responsible for the wiring within their house. Retail service providers could assist with this, the commission said, but "seem to be slow or reluctant to take ownership of the coordination of the home wiring".

Wiring in the majority of existing homes is not 'fibre-ready' and will not be able to carry truly high-speed broadband traffic even if connected to the UFB network.

The cost of rewiring a house to make it fibre-ready could vary between a few hundred and a few thousand dollars, the commission said.

The paper is the first of three the commission plans to release ahead of 'The Future with High Speed Broadband: Opportunities for New Zealand' conference in February – the other two will discuss e-health and e-education, and willingness to pay, content, and applications.

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