We started by asking people in the community what they need to participate in the digital world in a meaningful or mana enhancing way. From this community engagement we have determined that the following is needed:

• an appropriate device

• an uncapped internet connection

• the skills necessary to function in the new digital world

The next step was to determine the cost of this, and compare the cost to what people told us they could afford to pay, and the international benchmark that says connectivity should not cost more than two percent of income[1]. We found that that:

• The cost of a minimum appropriate digital enablement package currently is between $27.12 to $54.37 per week, depending on the number of children and adults in a household. We based the rest of our calculations on the $43 per week cost for a two parent two child family (two devices for the children).

• Based on our engagement with whānau, the average amount households can afford to pay per week is $7 for internet and $5 for a device per week. This equates to $17 per week for internet and two devices for a two adult two child family.

• Based on the two percent of income threshold, households in the lowest income quintile (earning less than $42 200 per annum) can afford to pay between $0 and $16 per week ($8 on average) for internet access.

• The shortfall between the cost ($43) and what households can afford ($17) is $26. This is the amount that needs to be subsidised per household per week for internet plus device access.

• If the focus is just on internet access (without devices) the subsidy amount would be $4.54 per week.

We then considered the question of how many households can’t afford digital access and are in need of support. We found, based on a two percent of income benchmark, that none of the 380 000 households in the lowest income quintile (income under $42 200) could afford the package of meaningful digital access.

Taking the total number of households in the lowest income quintile (380 000) and multiplying it by the shortfall between cost and what they can afford ($26 per week) we calculate that it would cost approximately 514 million per year to help all households in the lowest income quintile to have affordable access to internet and a device needed to use it.

We appreciate it would be a significant financial commitment to help all 380 000 households. We therefore recommend that the Government start by focusing on the 58 000 families in this quintile with children. The total cost of subsidising digital access (internet plus devices) for these households would be $1 352 per household per year totaling $78,416,000 per year for all 58 000 households. If you just focused on internet access (not devices) the cost would be $236 per household per year - a total of $13.88 million for all 58 000 households.

While there will be smaller households (single persons and couples) in the lowest income quintile who will struggle to afford digital access, families on similar incomes will be facing additional hardship, which is why we suggest you start with this cohort.

The next step was to look at options for subsidising internet access. We looked at options through the welfare system, administered by other agencies or NGOs, specifically designed equity products, and subsidies connected to social housing. Our recommended option is a digital equity payment, similar to the Winter Energy Payment, administered by the Ministry of Social Development (MSD), that can be put towards the cost of home and mobile internet access. This option could also sit alongside a contribution from the telecommunications sector in the form of discounted internet services for households who qualify for the subsidy. Eligibility would be connected to income level, and would be determined by MSD.

We then considered how the Government could fund the subsidy. Options include a new appropriation, re-directing funds from the Telecommunications Development Levy (TDL), increasing the TDL (if telcos were not contributing in other ways), contributions from agencies doing digital transformation projects that move services online, and a social investment agency funded by government that also seeks contributions and investments from the private sector.

Because internet access is not enough on its own (digital skills, access to a computer and wrap around support are also needed), we also considered how the Government could support community organisations offering digital skills programmes, recycling laptops and other devices, and providing wrap-around support to get people online and support them as they get started. We have recommended that these services be funded through an NGO intermediary, using a model similar to that used by the Good Things Foundation (in Australia). Community hubs (libraries and others) also need to be funded (jointly by central and local government) to provide last resort support to people struggling to access essential services online. Demand for these community based services has increased dramatically as a result of government moving more services online, and as banks and telecommunications retailers close their store fronts.

Lastly, we considered the issue of measurement and evaluation. It is essential that the Government is able to measure the impact its interventions and investments are having. We recommend the introduction of an index similar to the Australian Digital Inclusion Index, which measures access, affordability and digital ability.

We worked with Arataki to better understand, directly from whānau, what they need to engage in the digital world in a meaningful and mana enhancing way. In other words, what is a minimum appropriate digital enablement package? As part of this we wanted to test assumptions that government agencies, researchers and NGOs such as ourselves had been making about what people need to do online, how much internet access a household needs in terms of data, what else they need, and how much they could afford to pay for that.

In seeking to understand what a mana enhancing package looks like we were inspired by international developments. These included:

• The concept of “meaningful connectivity” being used by a number of international organisations, including the Broadband Commission and global nonprofits the Alliance for Affordable Internet and the Global Digital Inclusion Partnership. Meaningful connectivity includes an unlimited broadband connection.

• The minimum digital living standard developed by the Good Things Foundation in the UK, and being rolled out by the Welsh Government.

A team, led by Lee Timutimu (Arataki Systems)[2], and supported by fellow Māori tech leaders Hiria Te Rangi (Whare Hauora) and Amber Craig (Tumu Labs), have explored what an affordable connectivity solution could look like. The intention is to address digital inequity utilising a new delivery and service model that is by Māori, but for all. As we have seen with the Covid vaccination roll-out a Māori led and centred approach will have a significant impact on overcoming some of the real and perceived barriers to getting homes connected, particularly within lower socio-economic communities.

Leveraging their strong relationships into Māori communities, the team were able to engage safely and appropriately with whānau with a high level of trust. This made all the difference in accessing insights and feedback from Māori communities. The team also leveraged its strong networks and relationships into the Māori tech community, and conducted a number of interviews with Māori tech leaders.

Engagement methods employed included in-person hui (meetings) and wānanga (discussion forums) with leaders and community members at flax roots (on the ground) level. Online methods, such as surveys and virtual meetings, were also utilised to enable the wider capture of data from individuals and communities around the country. A combination of in-person and virtual engagement allowed the team to engage with a wider audience which ultimately contributed to the quality of data captured.

People involved in the engagement process included Māori and Pasifika tech leaders, Marae trustees, Māori whānau and the Māori tech community. We also engaged with the general population via online survey mechanisms.

Respondents were asked a range of questions relating to the subject of “affordable internet”. We also polled respondents on some possible pricing scenarios (i.e., what they’d be willing to pay for an affordable internet product), which revealed some interesting insights. The line of questions posed were formulated by the DECA stakeholder collective and were directly informed by the research that has already been done on this subject.

1. The Arataki research confirmed unequivocally that whānau consider an internet connection to be a necessity, with 100 percent of respondents answering “Yes” when posed with the question “Would you say internet access is important to you and your whānau?”

2. This set the tone for much of the research engagement with whānau and their households. The Arataki team were consistently told by whānau that the internet helps them to stay in touch with their family and friends, both here and abroad. This validated many of our assumptions concerning the importance of an internet connection to whānau and the importance it holds in terms of staying connected with the outside world.

3. Maintaining connectedness to those outside of your home speaks to the importance of connectivity to your community. We were told by whānau that the use of virtual communication platforms was an important part of maintaining their connectedness, especially with their family members overseas. Other insights included the ability to access services online for information and utilities, the ability to work from home (particularly relevant during the Covid-19 era) and the ability to create economic wealth through entrepreneurship opportunities.

A highlight of the engagement mahi involved working with Marae trustees at various marae around the country. The insights they shared were often unfiltered and in some instances hard hitting.

•   “Land lines are unreliable in this area so, although I am resistant to technology, I have given in to using it to communicate with whānau, to arrange marae bookings etc.”

•   “With the increased acceptance of internet usage on the marae for various hui, connectivity has allowed those unable to arrive in person (ie. due to māuiui (sickness), overseas, etc.) to still participate.”

•   Keeps us connected to the rest of the world instantly. Communication with family is cheaper, faster and easier.

•   As I reside in a rural location, Teams/Zoom via the internet enables me to maintain valuable business networks regionally, nationally and globally.

We asked FigureNZ to take the cost of the package of meaningful digital access, and the insights from Arataki on what whānau needed and could afford, and tell us:

• how many households could not afford the mana enhancing package

• what income ranges they are in

• what is affordable in terms of a percentage of household income for those deciles, and how does this compare to the two percent benchmark that is used internationally

• which households are most in need of support in terms of demographics and location.

In this section we:

• make some preliminary comments about the two percent of income benchmark

• outline the FigureNZ approach

• share the findings from FigureNZ.

The UN Broadband Commission says that internet is affordable when it is priced at two percent or less of average income. Using a national average income does not, however, account for income inequality and differences in family sizes and other demands on the budget. DECA is also of the view that the two percent should include home internet, mobile internet and the cost of devices. For these reasons we asked FigureNZ to look at the data and tell us if two percent was an affordable benchmark for low income New Zealanders.

Figure NZ’s analysis used data from the Household Economic Survey (HES). The HES is a regular survey designed to measure the economic well-being of New Zealanders. The ‘income’ module provides robust segmentation of household income levels by demographics and household characteristics. It is run every year.

Household counts and incomes are for the year ended June 2022. These values are likely to be lower than actuals because the population grew by an estimated two percent in the past year and wages also grew. It is also important to note that the data collection for the latest HES was reduced due to COVID-19 alert level restrictions, lockdowns and other disruptions.

The HES provides counts of people and households by household composition. The following groups were considered by FigureNZ for the digital equity mahi:

• Couple with one dependent child

• Couple with two dependent children

• Couple with three or more dependent children

• One parent with dependent child(ren).

The FigureNZ calculations are based on the most up to date information on New Zealand income quintiles, provided by StatsNZ through a custom data request. We have not used income deciles because StatsNZ has not updated the decile figures for several years.

Here are the household income quintiles for the year ended June 2022:

• Quintile A: Less than $42,400 (the lowest-earning 20% of households)

• Quintile B: $42,200 to $75,999

• Quintile C $76,000 to $116,999

• Quintile D $117,000 to $173,999

• Quintile E $174,000 and over (the highest-earning 20% of households).

The figure below shows the number of households falling below the $42,200 income level, which corresponds to the lowest quintile. This is segmented by household composition and excludes household types that are outside the scope of this package, such as couple-only and people living alone.

This data shows that in 2022 there were around 42,900 low-income households that are couples with at least one dependent child or one parent with at least one dependent child. This number increases to 58,300 when including other types of one- family households with children.

For context, the total number of households as of June 2022 was 1.91 million. There are 382,200 households in the lowest income quintile, the majority of which are people living alone.

FigureNZ calculated whether the digital access packages were affordable at the top income level of the quintile or the middle point of the quintile ($21,100). This is done by applying the industry-standard two percent benchmark as a ratio of digital access cost to annual gross household income.

• Two percent of average amount of income for quintile-1 households: $21,100 * 0.02 = $422

• Two percent of top amount of income for quintile-1 households: $42,200 * 0.02 =$844

These values are lower than the proposed costs of the packages, which range from $1,410.47 to $2,827.40 per year per household, depending on the number of adults and children.

The table below illustrates the gap between package cost and the amount that a household can afford, based on the two percent benchmark. This is an average per household, segmented by composition type.

The household composition classification is different from the way the packages were defined by DECA. FigureNZ therefore applied the cost of the closest match.

FigureNZ identified three shortfall scenarios to illustrate that digital connectivity is unaffordable for all low-income households, regardless of their composition. The scenarios are:

• Households pay nothing

• Households pay two percent of income - based on the average income in the lowest income quintile

• Households pay two percent of income - based on the top income level on the lowest income quintile.

The following table shows the cumulative funding required to cover the shortfall, segmented by household composition. It is calculated by multiplying the number of households by the shortfall amounts.It also demonstrates how widely the gap would change depending on the numbers used.

There are two high level intervention options for government to help people access the digital equity essentials: affordable connectivity, devices such as laptops and tablets, digital skills and wrap-around support to get and stay online:

• One approach is to subsidise the cost of internet access and devices, for those who can’t afford them.

• The other is to fund programmes in community that provide digital skills and wrap around support.

We think a combination of the two approaches is needed. Internet access lends itself to the subsidy approach. Digital skills and wrap around support are in the community funding camp. Device access could be supported by either approach - either subsidising the cost for individuals or funding devices as part of digital skills or device recycling programmes.

Options for both approaches are explored in the remainder of this briefing.

There are several subsidy approaches that government could take:

• digital equity payment through the welfare system that could be used by people on low incomes to help pay for internet access or for both internet access and devices

• digital equity payment administered by another government agency or an NGO

• using/amending existing MSD payments to subsidise internet and device costs

• subsidising device costs for rangatahi through the education system

• government partnering with internet service providers (ISPs) to jointly subsidise the cost of internet access for people experiencing income poverty (through an equity product or products specifically designed to meet the needs of the digitally excluded)

• government becoming a retail service provider (RSP) of internet services

• subsidising home internet through social housing.

Each option is explored below. We then offer thoughts on how the Government could fund a subsidy. A regulatory option is also presented as an alternative to a subsidy, for comparison purposes.

The welfare system (via MSD) currently provides very little support for internet and device costs, despite the Welfare Expert Advisory Group finding that these costs are essential. The support on offer tends to be one off and discretionary with no certainty around eligibility. It includes:

• One off hardship assistance (HA): assistance could be provided to pay a one off internet bill. The limitations of HA for internet is that it is for one off assistance (not ongoing support), highly discretionary (because MSD does not consider internet to be essential for hardship purposes), and funds provided through the HA may need to be paid back. It is also difficult to get HA to pay for a BYOD device for school, because neither MSD or MoE say devices are essential. We understand that an upcoming review of the HA may consider changes to cost categories which will provide an opportunity to include internet and devices in the essential category.

• Temporary additional support (TAS): a weekly payment that helps when folks don’t have enough money to cover essential living costs. Because internet isn’t considered an essential cost, it is discretionary under TAS. While internet costs will be considered in the review of TAS, this could be some years away.

• Training incentive allowance (TIA): internet costs can be paid for single parents in training.

We are of the view that a digital equity payment through the welfare system (MSD) - for internet access - is the most straightforward subsidy option. It is also our preferred option for government support with internet access, and the option preferred by DIA officials. MBIE also supports a subsidy approach, in combination with government procurement (discussed below).

The benefits of a digital equity payment through the welfare system, compared to other options, are:

• It avoids a number of the complications and costs associated with the option of working with industry to jointly design and subsidise a new equity product - complex commercial negotiations with ISPs, and the need to consider regulatory and competition law issues.

• It provides choice and flexibility for consumers. It is also likely to be perceived as more mana-enhancing as households can access what is best for their home, instead of something that is perceived as a second class or charity service.

• It keeps the process simple for vulnerable New Zealanders, who do not need the burden of a complicated application process.

• It is a solution that makes sense when we consider that the underlying problem is an income poverty one.

• It utilises the expertise that MSD already has in designing and administering welfare payments.

The potential downside of this option (from a government resourcing perspective) is that it would require MSD to reprioritise its work programme to do the policy and design work.

Here is our thinking on how a digital equity payment might work:

• Recipients of the payment could use it to contribute to the cost of home and mobile internet packages provided by any ISP.

• The funds would be paid to the MSD customer (as is done for the Winter Energy Payment). The alternative is to make the payment directly to the ISP chosen by the customer, but that may require more costly and time consuming administration (as is the case for the US and UK approaches considered below). Another variation of this option is a voucher system.

• The payment could be just for internet access (at home and on the go) or both internet and devices.

• The payment could be teamed with a telco industry contribution where ISPs voluntarily offer lower cost packages (at or below a specified price) for people who receive or are eligible for the MSD digital equity payment. This could enable the subsidy pot to go further and more people to be supported. It would however make design and delivery more complicated than a subsidy on its own, as ISPs would need a process for knowing a potential customer is eligible for or receiving the MSD subsidy (ideally through an API feed into telco systems). There may also be some regulatory issues for MBIE to work through if products are not being made available to all (i.e. those on higher incomes).

• An alternative to the idea in (d), proposed by MBIE, is to team the government subsidy with contestable procurement. They call this contestable procurement plus co-payment. Under this option, the Government would issue a tender for a broadband product meeting certain specifications for speed and data capacity, at a specified maximum household cost. Government would pay the subsidy to the ISP who is providing the services to the eligible consumers. This is similar to the US approach discussed below (which is, in our opinion, overly complicated).

• To ensure effective uptake, the payment would need to be supplemented by funded wrap-around support in the community, to help those new to the digital world to navigate ISP options and get set up. We recommend that wrap around support be provided by community organisations and funded through an NGO intermediary. The NGO intermediary proposal is discussed later in this paper.

The following figures (from Arataki, InternetNZ and Figure NZ work) could be used to help calculate the amount of the payment and the total cost. This is based on the following:

• Whānau (with two children) in the lowest income quintile could afford to pay on average $17 per week for internet access and two devices ($7 for internet access and $5 per device).

• Whānau need an uncapped internet connection and appropriate devices (discussed earlier) which would cost between $27.12 to $54.37 per week dependant on number of children and adults in a household. For a two parent two child family the cost is $43 per week.

• The subsidy is the difference between the amount whānau can afford and the market price. For internet access plus two devices this is $26 per week. For internet only it is $4.54 per week.

• The total cost for an internet plus devices subsidy if it was offered to and taken up by all 380 000 households in the lowest income quintile would be $513,760,000 per annum.

• If an internet plus devices subsidy was just offered to the 58 000 families in that quintile (the recommended approach) the cost would be $78,416,000. An internet only subsidy would cost $13.88 million per annum for the same
  cohort.

A digital equity payment through MSD, that is able to be used for any internet service, similar to the Winter Energy payment, is our preferred option. The reason for this is (relative to the options discussed below) its simplicity, ease of administration, and not placing unnecessary complexity and burden on people who are already struggling.

It is also an approach that supports competition in the telecommunications sector. It's fair to big and small providers, and is technology agnostic (enabling both fibre and wireless options, which is important for people who can’t get fibre in their area and for families or children who move often).

Eligibility criteria are discussed in the section on eligibility later in this paper.

New Zealand already uses the subsidy approach to help New Zealanders on low incomes afford the cost of heating homes - through the Winter Energy Payment. Eligibility is simple - the payment is automatically paid to people who already get other specified payments from MSD. The Winter Energy Payment rates are $20.46 per week for single people without dependents and $31.82 per week for couples and people with dependents.

The precedent value of the Winter Energy Payment is as follows:

• it is an example of government subsidising access to an essential utility for people who can’t afford the essentials

• it shows that MSD already has the expertise to design the payment and to administer it

• it provides an example of an easy way to work out eligibility - tagging it to eligibility for something else that is income and hardship related.

Australia provides quarterly payments, to help with internet costs, to people receiving disability payments.

MBIE is a candidate because of its responsibility for digital economy and communications. It is not possible to meet the aims of its statement of intent on Lifting Connectivity in Aotearoa New Zealand, to enable more people to benefit from connectivity, without addressing equity and affordability issues. Having fibre run down your street with the possibility of connecting to it is not internet access. Access is not achieved until affordability and equity is addressed.

The MBIE market services group has experience administering all manner of things, including subsidising digital enablement for small businesses through the Digital Boost programme. MBIE could look after the appropriation and pay the subsidies itself, or team up with (and fund) an NGO intermediary to do the administration. MBIE’s government procurement experience could also be used to negotiate discounted prices on devices (if the payment included devices).

Other agency options might be DIA (currently the policy lead on digital inclusion, and the lead on digital government) or the Commerce Commission (see US precedent below).

Another, much less efficient, option is for agencies responsible for various population cohorts to administer the subsidy for those population groups.

There are a number of ways a digital payment could be distributed if MSD isn’t in the mix:

• A payment direct to the consumer from the government agency, to use to buy any commercially available internet service or device. As for the MSD option, this is the most straightforward option. Its downside is that, without wrap-around support, digitally excluded consumers may find it difficult to understand what is on offer and get set up. Wrap around support by community organisations would need to be funded via an NGO intermediary.

• A voucher provided to the consumer by the government agency that can be used with participating ISPs for specified sorts of products. The downside of this option is the administration that comes with the development and operation of a voucher system. It also leaves digitally excluded people without wrap-around support if this is not funded as suggested above.

• A payment direct to ISPs, from the government agency, to subsidise the cost for customers who meet the criteria and are eligible for the subsidy. The subsidy could be used for any product or for specified products. This option would create additional administration between government, consumers and ISPs, as ISPs would need confirmation of eligibility from government. It also leaves digitally excluded consumers to navigate the ISP and product options.

• Indirectly through an NGO intermediary that is funded by the government agency (see US example below). The intermediary could either make the payment to the consumer or to the ISP for eligible consumers. Payments to the ISP could be used for any product or for specified products. The advantage of this option is that the NGO intermediary could address eligibility questions and provide wrap-around support. However, additional government funding would be needed to resource the intermediary to do these functions.

• The payment could include a subsidy for devices. An alternative or supplementary approach could involve MBIE procurement people negotiating a reduced price on appropriate devices with participating retailers, that is then available to people who meet the eligibility criteria. The Ministry of Education did this for devices in schools as part of its Equitable Digital Access and other programmes.

The suggested amount for the payment is the same as for the welfare system option. Eligibility criteria are discussed in the section on eligibility later in this paper.

This section highlights some of the subsidy/payment approaches taken in other countries. While some aspects of these could provide inspiration for what to do in New Zealand, not all elements are ideal. But they provide some practical ideas and support the overall case for government intervention.

The US Affordable Connectivity Programme

In the United States the Federal Communications Commission oversees the Affordable Connectivity Programme. Under the programme, the federal government subsidises internet access (US$30 off per month, and US$75 off for tribal lands), in partnership with participating providers. It also offers a one-time discount of up to US$100 to purchase a laptop, desk computer or tablet from participating providers.

• Eligibility criteria are connected to household income, or meeting criteria for a range of other assistance programmes. Information about the eligibility criteria can be found here.

• The programme is administered by the Universal Service Administrative Company (an independent non-profit), under the direction of the Federal Communications Commission. The Universal Service Administrative Company also administers a range of programmes and funds that serve people in rural, underserved, and difficult to reach areas, that are paid for from the Universal Service Fund[3] (telcos contribute a percentage of revenue to the Fund).

• Process wise, applicants submit an application form to the Universal Service Administrative Company, and once approved they then contact a participating provider to select a plan and have the discount applied to their Bill. The process does seem complicated, with multiple touch points, but it is an example of a government subsidy which reduces the cost of commercially available internet services.

• More information about US federal government funded programmes can be found here. Much of the US government funding goes to state governments and cities to develop digital equity plans, establish programmes and deploy broadband. A number of these programmes are administered by a second federal agency - the National Telecommunications and Information Administration.

The State of California Broadband for All Programme

The State of California is making a $65million investment into broadband. While much of this is about infrastructure investment, the Broadband for All Programme will also include digital equity programmes.

Australia is delivering free broadband to unconnected families with school age children

The recently introduced School Student Broadband Initiative will provide free home internet for one year for up to 30 000 unconnected families with school age students. The initiative will be implemented by NBN Co (the company established by the Commonwealth Government to design, build and operate wholesale broadband for Australia) working closely with community organisations.

“Nominating organisations” identify and nominate potentially eligible families that may benefit from the programme. They assess needs and consider whether a child has access to a device and the digital skills to use the internet safely. NBN Co does not fund nominating organisations for their services, which seems to be a major oversight. Community organisations go through an expression of interest process to become a nominating organisation.

This is similar to the Ministry of Education’s Equitable Digital Access Programme. Extended funding for the New Zealand programme is due to expire in June 2024.

State funded programmes in Australia

Information on State funded programmes is available here. Support for affordable connectivity seems to have been time limited during the earlier stages of COVID-19.

Connecting Scotland

The Connecting Scotland Programme aimed to get 60 000 digitally excluded households online by the end of 2021. Community organisations could apply for support on behalf of the people they were working with. The programme provided internet connectivity - a mobile WiFi hotspot with 24 months unlimited data. Devices and training and support were also provided.

The programme had a COVID focus and has reached the end in its current form. But planning for future development of the service is underway.

The Social Tariff approach in the United Kingdom

Ofcom, the UK’s telco regulator, has powers[4] to require ISPs to offer social tariffs (special prices and products) for groups of customers with special social needs or on low incomes. It hasn’t had to exercise the power as yet because a large number of ISPs are voluntarily offering low cost products (although there are concerns about take up, discussed below).

Customers are eligible for a social tariff when they already claim the Universal Credit (a payment to help with living costs), Pension and other UK benefits. New or existing customers apply to the participating ISP of their choice (from the list of offered social tariffs on the Ofcom website). The ISP is responsible for doing an eligibility check. Some have this automated with the Department for Work and Pensions while others need to do it manually.

Uptake of the social tariff products has been low, with only around five percent of eligible households signed up to a discounted package. Ofcom thinks that ISPs may not be doing enough to promote the products. Another possibility is the lack of wrap around support for digitally excluded people to navigate all the options.

The UK Communications Act 2003 provides that should a provider implement a social tariff model and find it places an unfair financial burden on itself, then the provider has the option to ask the UK government to subsidise part of its tariffed connections. This provision seems to be untested.

MBIE and the Commerce Commission have considered the social tariff approach and do not recommend it for Aotearoa New Zealand. The Commission thinks determining the appropriate service specifications would be complex and could quickly be out of date as the market changes and consumer demands for data and speeds trend upwards. It could require time consuming legislative change, and would have ongoing stewardship and monitoring costs. They also noted a risk that social tariff costs could be passed on in higher prices for other customers. MBIE also notes that any resulting social tariffs are likely to be limited by the underlying costs of providers. For this reason, MBIE is of the view that a truly affordable social tariff is likely to require a subsidy.

European Union

The European Electronic Communications Code (EU Directive 2018/1972) makes access to adequate broadband at home a right, and specifies that broadband should be affordable. Where the price of adequate broadband is not affordable to consumers on low incomes or with particular needs, member states can:

• require broadband providers to offer basic tariffs to those consumers (see for example the UK social tariff approach discussed above), or

• provide support, such as direct payments, vouchers, or a social allowance, direct to consumers.

Broadband internet must have sufficient bandwidth for using services such as eGovernment, internet banking, and standard quality video calls. Adopted in 2018, the updated directive was implemented by most EU countries by 2022.

Canada Connecting Families

The Connecting Families programme is a collaboration between the public, private and non-profit sectors that helps families who struggle to afford access to home internet.

For $20 per month, speeds of 50/10 per Mbps and data usage of 200GB per month is available.

Families receiving the maximum Canada Child Benefit are eligible, along with low income seniors receiving the maximum Guaranteed Income Supplement. A letter from the Canadian Government is required to be able to prove eligibility and access the scheme.

While ISPs voluntarily participate in the programme and discount their prices as a koha (with no subsidy), the Canadian Government covers the administrative costs of running the scheme, funding an NGO intermediary to operate the online portal that is used by eligible households and ISPs.

As noted earlier in this paper, the work done by FigureNZ shows that all 380 000 households in the lowest income quintile (incomes under $42 200) cannot afford the cost of the basic package, based on the two percent of income threshold. This includes:

• 58 000 families

• 240,100 single-person households

• 78,200 couple-only households

• 5,900 other household compositions not elsewhere included.

Forty percent of these households reside in North Island regions excluding Auckland and Wellington.

Thirty-five percent of low-income households live in a home that they don’t own, either partially or fully.

Twenty-eight percent of low-income household have at least one person who is disabled.