The money is part of the $1.5 billion the government has earmarked for its Ultra Fast Broadband (UFB) plan. The Budget allocates a further $200 million of the capital funding for 2010/11, in addition to the $200 million it provided last year.

ICT Minister Steven Joyce says the funding will enable Crown Fibre Holdings “to start making substantial contract commitments with the private sector to start rolling out the new network on schedule.”

The timetable that’s been publically announced is that the partner(s) will be announced in June, contracts signed in September and physical work begun by the end of the year. There are three main contenders – Telecom, an alliance of regional lines companies and independent fibre companies under the banner New Zealand Regional Fibre Group (NZRFG), and Axia Networks which have formed an alliance with Vodafone.

In addition to the $200 million for the UFB, Budget 2010 also provides $48.3 million for schools to upgrade their internal networks in preparation for both the UFB and the $300 million Rural Broadband plan.