Tauranga City Council's very own fibre optic network may be the only means of connecting businesses at the Historic Village to the ultra-fast broadband network being completed about the city.

The Crown funded ultra-fast fibre network already runs past the Historic Village gate on 17th Avenue, but 'very complex” consenting issues for gaining access to the heritage listed properties has stopped the council and ultra-fast fibre from reaching an agreement.

The Historic Village will soon be connected to fibre.

A formerly confidential report to the council states the council is planning to run a 300m spur from its own fibre optic network at Cameron Road, to enable the 50 or so small businesses at the village to connect to fibre – either to an internet service provider of their choice, or by using TCC as the USP.

The city council is looking at delivering the Tauranga metro network to the village using a combination of wireless and TMN fibre connections.

If the Historic Village project proceeds, it may result in a number of new lease agreements for supply of commercial fibre and internet services for the council, says report by Devanti consulting.

Councillors agreed to make the report public at the December 16, council meeting where they also voted to keep the network, instead of selling it.

The TMN is 28km of ultra-fast fibre optic network owned and managed by Tauranga City Council. It's been in existence since 2007, and has cost the city council about $1.9 million. The network is 96-core fibre optic cable, linking 24 TCC sites, 270 HD CCTV cameras and the city's traffic light network.

Because it was initially laid with a large amount of surplus capacity, the council has been leasing some of it out over recent years - generating about $87,000 in income each year. Even with the leases the total use of the TMN fibre network is about eight per cent of capacity, says the Devanti report.

Tauranga city councillors have voted to keep the network because it's not worth selling. Figures in the report show it would only make commercial sense to sell the network if it was close to a customer that wouldn't be better serviced by an existing network - in a city that will soon be among the first in New Zealand to have a fully deployed UFB network, with enough capacity, reach and resilience to meet the needs of all but a few consumers.

It's a small market, and the price would not be very high. The council would want acceptable terms for its ongoing use, which are unlikely to be acceptable unless there is a clear commercial advantage for the buyer. The consultants estimate proceeds from a sale will offset the cost of leasing for just six years.

The councillors instead voted to keep the fibre and equipment, and invest in additional network reach and resiliency and continue to lease the network where specific criteria are satisfied.

It's the decision that exposed the council to significantly less uncertainty and risk, says the consultants' report.

With that comes the agreement to strengthen council's governance of the network by establishing a dedicated internal/virtual team to manage the TMN.

The consultants say other activities that need to take place to ensure the network generates the broadest possible benefit for council include:

Establishing an internal charge back process to gather revenue from within the business.

Review the TMN ‘rate card' to ensure pricing for the TMN is consistent with current market rates.

Establish clear assessment criteria for identifying whether opportunities for commercial growth should proceed.

Invest in dedicated contract coordination capability to provide a more seamless experience for leaseholders in the event of future network outages.

Review the template used for long term leases to ensure TCC negotiates better terms of service with future commercial leaseholders.

In December 2014 city councillors also agreed to retain and grow the TMN, with a view to achieving commercial growth so substantial as to position TCC as the region's leading ISP.