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Source: Thinkstock
Internet providers may have difficulty persuading consumers and small businesses to pay extra for services that could be delivered over ultrafast broadband, a Commerce Commission report has found.
Ultrafast broadband (UFB) will be made available to three-quarters of households by 2020 under a government-backed $3.5 billion scheme.
In a third, long-awaited report on barriers to uptake, the commission said half of consumers were interested in getting high-definition movies and video-on-demand over UFB, but fewer than a fifth of consumers were willing to pay more than $10 a month for a high speed service.
Three-quarters of small businesses were happy with their existing broadband service and the commission said there was ''no strong demand'' from them for applications such as high-definition video-conferencing.
TelstraClear has led calls from within the telecommunications industry for regulatory reforms that would weaken Sky Television's control over pay-television content and give internet providers a leg up offering ''triple play'' internet, phone and television services over fibre.
While Communications Minister Amy Adams indicated to The Dominion Post last month that it would take a ''wait and see'' approach, analysts will be scouring the commission's report for signs it might support such regulation.
The commission said New Zealand was ''significantly behind'' other countries in developing subscription-based services, such as Netflix, that offer video over broadband.
It also suggested the fact ''premium content'', such as sports broadcasting rights, was held by ''a small number of market participants'' was a factor.
It indicated some sporting bodies were now investigating selling rights to events direct to consumers over broadband, which would loosen television broadcasters' grip over TV generally, but it said those investigations were ''at a very preliminary stage, with any commercial service some years away from commercial development''.
Cisco forecast the transmission of videos lasting more than seven minutes would account for more than half of all internet traffic by 2015.
