An outsider's biewpoint

[Gordon Milne]

This (http://www.stuff.co.nz/stuff/0,2106,3246317a13,00.html) article
appeared as the lead article on the front of The Press' business
section today.

Sachio's comments are well timed. Hopefully, this kind of continued
comment will lead to:

1. competition in the market
2. lower prices for everyone

Given the toothless nature of the NZ telecoms regulator we might be
waiting quite a while before this happens.

Rant Mode On

I used to think that $69.95 for my 2Mbps/192kbps/10GB was good value
until I compared my plan to that of a friends in Oz. His plan costs
98NZD but he gets 1.5MBps/512kbps/14GB(peak)/14GB(off-peak). His cost
per GB is half that on mine. ANd he gets a static IP address whereas I
don't.

And now, Telecom have downgraded all plans with a 192kbps upload speed
down to a 128kbps upload speed to ensure compatibility with the UBS
product.

What we need is to get Telecom's controlling hand out the local loop
and into someone we can trust to ensure fair access for all. The
current situation is dreadful and even with ADSL in the pipeline I am
sure that competiton would have got us there faster.

And the one thing I really hate about the current plans is how you get
$10 off a plan if your toll calling is with Telecom. This is
cross-subsidy and is not allowed in most countries. Telecom is using
it as a way to beat up its competitors. If we had LLU this would NOT
happen.

Rant Mode Off

Regards,

Gordon

[LEE Tet Yoon]

Post by Gordon Milne
Rant Mode On
I used to think that $69.95 for my 2Mbps/192kbps/10GB was good value
until I compared my plan to that of a friends in Oz. His plan costs
98NZD but he gets 1.5MBps/512kbps/14GB(peak)/14GB(off-peak). His cost
per GB is half that on mine. ANd he gets a static IP address whereas I
don't.

Do note that you can save $10 off this price provided you're willing to use Ihug as your ISP and Ihug for tolls. As I've mentioned before, Ihug were allowed to offer their own plans based on a layer 3 service (now moving to layer 2 - UBS I assume) and they undercut Telecom/Xtra by $10. Now that 2 mbit UBS is available to ISPs, I had expected them to at least join into this market and start offering a 10 gb 2 mbps UBS service to replace the Jetstram Plus/whatever it's called they're now offering from Telecom but so far haven't seen anything. Regardless Ihug's offer is the best deal for 2mbps IMHO although to be fair, I don't use my Telecom toll calls anyway. The only disadvantage is that they've always been 128k upload I believe but it's irrelevant now anyway.

I suspect Ihug offer a static IP and in any case, it has been mentioned before that other ISPs (Orcon being one of them) still offer static IPs for Jetstream plans despite it being reported before that Telecom doesn't allow this. You might want to look into this if you want a static IP and Ihug doesn't offer or you're not willing to use them for some reason. Be aware that in this case, it'll still be Jetstream (for now) and so your connection will be the same as it is now (with same limitations, toll calls with Telecom etc) but of course you'll still need to rely on your ISP as the point for service. But make sure the ISP only charges $10 since some do charge more.

In any case, although my dislike of Telecom and the current situation should be fairly well known on this group, I am surprised that no ISP has come up with their own Jetstream Plus (or whatever it's called) replacement now that it's possible via UBS. After all, it will remove the pesky Telecom toll call requirement which is surely an advantage for them and surely they'll make more money then they make now from the $10 they can charge? I suppose they want to concentrate on their 256k plans...? Or maybe they don't want to move their current Jetstream Plus/whatever customers due to the big hit their pocket will take from the churn fee so they don't dare offer competing 2mbit plans.

Having said all that, the situation for ISPs is still not very competitive IMHO and never will be with the way the CC and gov have handled things.

[Steve Phillips]

LEE Tet Yoon wrote:
[snip]

Post by LEE Tet Yoon
In any case, although my dislike of Telecom and the current situation
should be fairly well known on this group, I am surprised that no ISP
has come up with their own Jetstream Plus (or whatever it's called)
replacement now that it's possible via UBS. After all, it will remove
the pesky Telecom toll call requirement which is surely an advantage
for them and surely they'll make more money then they make now from
the $10 they can charge? I suppose they want to concentrate on their
256k plans...? Or maybe they don't want to move their current
Jetstream Plus/whatever customers due to the big hit their pocket
will take from the churn fee so they don't dare offer competing 2mbit
plans.

Um..

256kbps pretty much cleaned out the ISP's, what do you think 8 times
this speed will do ?

suprisingly enough, the extra $10/mo will not actually cover
provisioning the required circuits to support the product.

yada yada ya about lots of customers == lost of $$ == ability to break
even. Someone needs to tell that to Seeby again.

Post by LEE Tet Yoon
Having said all that, the situation for ISPs is still not very
competitive IMHO and never will be with the way the CC and gov have
handled things.

Actually, this is primarily the ISP's fault, they need to learn to talk
to each other and not backstab each other in order to get some scrapings
from the telco tables. Until this happens there will be no competition
in the market, nothing will change and Telecom will still dominate the
market.

And dont even start on deregulation and LLU, it is a myth that few
realyl understand the implications of.

[Juha Saarinen]

Post by Steve Phillips
Um..
256kbps pretty much cleaned out the ISP's, what do you think 8 times
this speed will do ?

OMG! Are you saying the ISPs don't have any bandwidth to handle 1 and
2MB UBS?

Post by Steve Phillips
Actually, this is primarily the ISP's fault, they need to learn to talk
to each other and not backstab each other in order to get some scrapings
from the telco tables. Until this happens there will be no competition
in the market, nothing will change and Telecom will still dominate the
market.

Yes, they seem to prefer practising ankle-grabbing so as to be allowed
to leech a margin from Telecom's resale products rather than cooperating
with one another, which is interesting.

Post by Steve Phillips
And dont even start on deregulation and LLU, it is a myth that few
realyl understand the implications of.

All we need is FTTP and then we can forget about LLU and telco crapola.

[Richard Naylor]

Post by Juha Saarinen

Post by Steve Phillips
And dont even start on deregulation and LLU, it is a myth that few
realyl understand the implications of.

All we need is FTTP and then we can forget about LLU and telco crapola.

Umm, correct me if I'm wrong here, but the most likely people to roll
out FTTP are the Telco's... So far the only one that's shown any
interest in FTTP whatsoever is Telecom.

*wrong* - Citylink have FTTP as does Vector, InspireNet, someone in
Invercargill, Network Tasman, Wired Country and TelstraClear. The sleeping
giants are the power Lines companies. They have hugely deep pockets, own
the poles, have an engineering background (well they used to ) and are
interested in growing local communities. They just a little conservative
and need a help getting going.

They also keep hiring "telco" engineers to design next generation (ie
IP/ethernet) networks, when telco engineers often have limited experience
with these. Hence the pricing models they use and overly complex networks.

So how does changing the copper to fibre magically solve the problem?

Well with fiber the delivery model starts at 100mbps, altho some of the
gear I see makes a sweet spot at 1Gbps a no brainer. Anything at these bit
rates makes "new service" delivery trivial. P2p, video, voice, Internet is
all easy, especially if they have more liberal views on bandwidth charging.
As well as the new service/product model, just the simple effort of
installing the fiber has a pay back in the ecomony of 7 to 1 (Int figure
not mine). This is because theres loads of young guys who want a job
putting in cable, learning installer skills. They get paid and spend it in
the local market. That spend helps businesses that also spend their new
income - hence the multiplier.
If you saw the number of new businesses that started in Wn when Saturn did
their major build you'd understand. Saturn spent $450mill the first time
(they did it twice - they forgot phones first time round).

Even now in Wn people save $ per month on their phone bills - Thats $84
each per annum across 100,000 homes. Thats $8.4Mill - that gets spent in
the local economy. - with a 7:1 multiplier. If your local Council doesn't
want that in their area - vote them out. Wn has been having that saving for
the past 6 years.

LLU isn't the issue, new, better networks are.

rich

[Matt Brown]

Post by Juha Saarinen

Post by Steve Phillips
And dont even start on deregulation and LLU, it is a myth that few
realyl understand the implications of.

All we need is FTTP and then we can forget about LLU and telco crapola.

Umm, correct me if I'm wrong here, but the most likely people to roll
out FTTP are the Telco's... So far the only one that's shown any
interest in FTTP whatsoever is Telecom.

So how does changing the copper to fibre magically solve the problem?
--
Matt Brown
***@mattb.net.nz
Mob [phone] www.mattb.net.nz

[Juha Saarinen]

Umm, correct me if I'm wrong here, but the most likely people to roll
out FTTP are the Telco's... So far the only one that's shown any
interest in FTTP whatsoever is Telecom.

Oh oh oh... I meant to correct this one. Not just Telecom, but Vector
and Inspire Net as well.

[Juha Saarinen]

Umm, correct me if I'm wrong here, but the most likely people to roll
out FTTP are the Telco's... So far the only one that's shown any
interest in FTTP whatsoever is Telecom.
So how does changing the copper to fibre magically solve the problem?

Oh. Well, fuhgeddaboodit then.

This intarweb thing is overrated anyway. The Japanese can have it.

[LEE Tet Yoon]

*wrong* - Citylink have FTTP as does Vector, InspireNet, someone in Invercargill, Network Tasman, Wired Country and TelstraClear. The sleeping giants are the power Lines companies. They have hugely deep pockets, own the poles, have an engineering background (well they used to ) and are interested in growing local communities. They just a little conservative and need a help getting going.

That's good but how long before we have reasonable FTTP coverage? Also, the lines companies aren't all sleeping, Vector and Wired Country (CountiesPower) are lines companies after all. There are still many other of course but clearly they aren't all sleeping.

BTW, on the wireless front, I read BCL is planning to get into WiMax and Wired Country are installing a new site (although I'm still far from convinced wireless is suitable for urban and suburban areas)

They also keep hiring "telco" engineers to design next generation (ie IP/ethernet) networks, when telco engineers often have limited experience with these. Hence the pricing models they use and overly complex networks.

So how does changing the copper to fibre magically solve the problem?

Well with fiber the delivery model starts at 100mbps, altho some of the gear I see makes a sweet spot at 1Gbps a no brainer. Anything at these bit rates makes "new service" delivery trivial. P2p, video, voice, Internet is all easy, especially if they have more liberal views on bandwidth charging. As well as the new service/product model, just the simple effort of installing the fiber has a pay back in the ecomony of 7 to 1 (Int figure not mine). This is because theres loads of young guys who want a job putting in cable, learning installer skills. They get paid and spend it in the local market. That spend helps businesses that also spend their new income - hence the multiplier.
If you saw the number of new businesses that started in Wn when Saturn did their major build you'd understand. Saturn spent $450mill the first time (they did it twice - they forgot phones first time round).
Even now in Wn people save $ per month on their phone bills - Thats $84 each per annum across 100,000 homes. Thats $8.4Mill - that gets spent in the local economy. - with a 7:1 multiplier. If your local Council doesn't want that in their area - vote them out. Wn has been having that saving for the past 6 years.
LLU isn't the issue, new, better networks are.

I'd agree that FTTP is what we need in the long run but given the benchmark Telecom is set, do you think chances are even we have FTTP, we're going to end up with perhaps 5 mbps connections (if we're lucky) and 50 gb of data? Woohoo I can video conference with my friend in Dunedin in HDTV. Oooops I just used up my quota for a month in an hour now I'm stuck at 256k again. Let's not forget other then the reducing the price of line rental in ChCh and Wn, TelstraClear have not done much better with their network then Telecom, IMHO anyway. If there are enough competing companies (ones with real vision), this may be avoided and the future might be bright, but the fact remains we are still far behind everyone else and even if we suddenly are way up there again, this is not going to change the fact of our dark days (i.e. now) which could have and should have been avoided IMHO. There seems to be
a feeling if things get better for some reason in the future, this means we made the right deci
sion not to involve LLU but I'm far from convinced that we did whatever happens in the future. The only thing we can say (which a number of LLU supporters, me included) is that LLU might be too late by now.

What so many seem to be missing is that a newgen network is all fine and good and it's starting to be the way of the future for everyone else but we're still stuck in the past and are not even using what we have now at anything close to capacity! The door is starting to open slightly for ISPs but this is way too late, we should have been here years ago. Another key question is even with these nextgen networks, is our backbone going to be strong enough to support it all, given that we have no idea if it can even support what we can have now?

Actually, this is primarily the ISP's fault, they need to learn to talk to each other and not backstab each other in order to get some scrapings from the telco tables. Until this happens there will be no competition in the market, nothing will change and Telecom will still dominate the market.

Yes, they seem to prefer practising ankle-grabbing so as to be allowed to leech a margin from Telecom's resale products rather than cooperating with one another, which is interesting.

Stupid perhaps but not surprising. Cooperating might help them in some ways but then, in the end not much IMHO (except for TelstraClear). It's not going to make Telecom become good. On the other hand, each ISP realises that in the small market that does exist for them if they kick everyone else out, they'll get something. With LLU I think, things might have been different. If Telecom continues to screw every over it'll make a lot of sense for them to cooperate install their own equipment and tell Telecom to shove it where the light doesn't shine so to speak. But in the current environment, cooperating or not doesn't make much difference IMHO.

[Bart Hanson]

Post by Steve Phillips
And dont even start on deregulation and LLU, it is a myth that few
realyl understand the implications of.

Maybe Steve can explain why it is so hard to understand.

From where I I sit LLU (Local Loop Unbundling) involves Telecom's
connections at the exchanges (last km and all that) which Telecom do
not currently allow the ISP's access to.
LLU would supposedly allow ISP's to install their own equipment
(switches) at the exchanges.

With Telecom busy implementing a full IP network for $1billion (one of
the first countries to do so) replacing the older PSTN technology, they
will have very fine grained control via packet filtering, including:
which services get blocked (P2P?), which get throttled (Skype of
course),
which gets blazing throughput (Telecoms own VoIP customers, that will
be 99% of them) and any other value added (cost added) services they
can invent in the meantime.

Bart Hanson

***@orcon.net.nz