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635 posts

Ultimate Geek
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  Reply # 236947 19-Jul-2009 19:52 Send private message

insane: Need to remember that not all the current network equipment ISPs are using today easily scale to speeds great enough coupe with free national traffic.

While national traffic probably only accounts for around 20-25% of all usage, with free local traffic this would balloon with file sharing and other traffic that isn't actually contributing to business / economic growth.

ISPs will be having to upgrade their switching equipment, core routers, DPI equipment, handover links. Depending on the current equipment used some may even need to completely upgrade entire platforms if their current gear does not simply have upgradable components.

All this investment with no return as traffic is free? I can't see many ISPs wanting to sign up to that.


Yep, sucks to be them! That's why the government needs to step in.

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Uber Geek
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  Reply # 236949 19-Jul-2009 19:53 Send private message

Just to put this whole 'metering' / usage limits subject in perspective, the kind of 'caps' the US companies are talking about are in the region of 250GB per month.

250GB is a LOT of data! Sure you could use that much if you really tried, but for most people it's HEAPS!! I'd KILL for a 'cap' that high!! : )

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Ultimate Geek
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  Reply # 236950 19-Jul-2009 19:54 Send private message

Exactly.

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Master Geek


  Reply # 236951 19-Jul-2009 20:06 Send private message

I know this is slightly off topic, but this discussion has stirred the question...

Do we in NZ actually have any ISP's that do NOT include uploads as part of the included data (TelstraClear and Telecom still do)? Aren't we a little behind the times in this aspect? 99% of Aussie ISP's stopped this practice years ago (except on mobile broadband plans which is understandable).

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  Reply # 236952 19-Jul-2009 20:13 Send private message

I haven't seen any recenly (Ihug USED to do this but have since stopped). I also always wondered why unmetered uploads weren't the norm considering that most wholesale connections are symmetrical and therefore there must be a VAST amount of upload bandwidth languishing to waste out there.

However, I believe that the real reason for charging for uploads is that it gives ISPs a cheap / easy way to make a bit more money (it effectively gives customers less download quota to consume).

But yes, I agree, uploads it really should be unlimited, I'd even pay slightly more for the privilege!

635 posts

Ultimate Geek
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  Reply # 236954 19-Jul-2009 20:20 Send private message

Tohe: I know this is slightly off topic, but this discussion has stirred the question...

Do we in NZ actually have any ISP's that do NOT include uploads as part of the included data (TelstraClear and Telecom still do)? Aren't we a little behind the times in this aspect? 99% of Aussie ISP's stopped this practice years ago (except on mobile broadband plans which is understandable).


Are you crazy? That would cost ISPs money, and we can't have that! ISPs in other countries that have unlimited upload are not as good as you think! The grass is not greener on the other side! NZ internet is the best in the world!!!

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Ultimate Geek

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  Reply # 236959 19-Jul-2009 20:42 Send private message

Screeb: The user base of ISPs has nothing to do with their ability to provide unlimited local traffic. I have heard numerous times about how the best internet access in the US for instance, is provided by small local ISPs.

Also see Romania, which has >1300 ISPs, most of which have 50 to 3000 customers. They provide ~100Mbps unlimited plans cheaply http://en.wikipedia.org/wiki/Internet_in_Romania


I have to disagree.  Network investment is driven by revenue, and revenue comes from having a subscriber base.  The bigger your subscriber base, the more your revenue, the more money you have to invest.  The bigger your subscriber base, the more you can normalise your cost per subscriber to an average price.  With a small subscriber base, a single subscriber can make your operation unprofitible.  Offering "unlimited local traffic" is definitely a use-case here, because you may have 99% of subscribers who use 1T a month of local traffic each - which will become unprofitible.  If your subscriber base is more average, it is easier to offer.

I am not familiar with Romania so I will have to read a little further, but a quick skim of the Wikipedia article indicates it's not quite as straightforward as you claim (e.g. 33% of their broadband market is delivered via wireless).

Please understand I am not saying that "bigger is better", as from a service perspective the reverse is usually the case, but I am saying that when an operator has significant revenue and a subscriber base covering all demographics, you have much more flexibility.

Screeb: What do international cables have to do with national traffic? If anything, unlimited national traffic would reduce international traffic.

I was attempting to address several points, which includes why there is differentiation of national vs. international.  There is context to this whole thread beyond your posts.

I agree that if the cost of national traffic was reduced (or free) it would increase traffic, but I am not sure it would decrease international traffic.  The average NZ international:national ratio is still 9:1.  I suspect it might encourage P2P traffic locally and encourage some innovation in local products and services, but overall it's not likely to reduce traffic that much - the majority of production is offshore.

Screeb: Already adressed (lack of peering in NZ is a simply a "political"/competition issue).

Actually, I think New Zealand is a highly peered economy.  APE and WIX have significant number of participants and extremely low (some might say too low) barriers to entry.  The absence of the two largest players is an interesting artefact, but given that:

1. The majority of content in New Zealand is not hosted by TelstraClear or Telecom;
2. The majority of eyeballs in New Zealand are hosted by TelstraClear and Telecom;

I'm not sure what actually causes the ISPs to have concerns about peering.  Content hosters obviously do, because it is more expensive to sink their traffic into TCL and TNZ, but for an average eyeball ISP?  It shouldn't be a problem because the majority of their traffic source is likely to be accessible across APE and WIX.

The problem is likely, as pointed out by others, the cost of hauling that "free national" traffic into the access network - where there is little competition today.  There is no differentiation by Telecom over an international bit or a domestic bit when it is carried across UBS.


Screeb: Again, this is a competition issue. OF COURSE it's more expensive to provide unlimited national traffic than not.

So where does the additional revenue come from to cover this cost?  ISPs in New Zealand already publicly state they make negative or zero margins on residential broadband services, but people expect them to shoulder additional cost with no incremental revenue?  That's not a reasonable expectation.


Screeb: Congrats, you have a bad ISP. I know of a person in Sweden who hosts high traffic web content from their house, totaling ~3TB/month with their residential plan costing < $100 NZD.


A bad ISP perhaps - but an ISP in an economy that's often held up as "highly connected" and "I wish I could live there" examples.

That's fantastic for them.  Sweden is another economy with an interesting market, although theirs can be traced back to a language basis and aggressive investment by their Governments.  However, as with all examples, there are significant variations - I was in Sweden a month ago, and a few friends I visited did not have the option those particular broadband services.  HFC was the norm at 10Mbps.


I am also intrigued by the general feelings from people - they obviously value Internet connectivity and the benefits it brings, but they just don't seem to be willing to pay for it on a reasonable cost+margin basis.  Why is that?

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Ultimate Geek

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  Reply # 236965 19-Jul-2009 21:00 Send private message

insane: Need to remember that not all the current network equipment ISPs are using today easily scale to speeds great enough coupe with free national traffic.



While national traffic probably only accounts for around 20-25% of all usage, with free local traffic this would balloon with file sharing and other traffic that isn't actually contributing to business / economic growth.



ISPs will be having to upgrade their switching equipment, core routers, DPI equipment, handover links. Depending on the current equipment used some may even need to completely upgrade entire platforms if their current gear does not simply have upgradable components.



All this investment with no return as traffic is free? I can't see many ISPs wanting to sign up to that.

You have pretty much hit the nail on the head.  There is no incentive for ISPs to go down this path, except by trying to squeeze $5-$10 per subscriber in additional revenue per month.  Would you pay an extra $10 per month for unlimited national bandwidth?  I suspect it would be tough to make that work.

An alternative, as Screeb suggests, is for the Government to step in.  One possible approach[1] is to make it an undertaking on Telecom to offer free national bandwidth to their retail broadband subscribers.  As the marketplace tends to follow the dominant players, it will naturally expand across the board to become a normal offering.  Of course, this is unfair on Telecom (and other ISPs) as they are not gaining any incremental revenue to cover this cost.  The worst case scenario is that it simply encourages additional P2P traffic and there is no measurable positive impact to the NZ economy.

It poses an interesting catch-22:  there are people screaming that free domestic traffic will increase the innovation and development of New Zealand's economy by making it cost effective to deploy applications and business services here.  Of course, there is a direct cost to offer that free domestic bandwidth - so nobody (or few) are offering it, on the basis that it's not business friendly.

If you agree with side A, you force the market to do it - which in turn makes New Zealand look like an unfriendly place to do business and shakes investor confidence, because you're forcing companies to do something against their will.  If you agree with side B, you run the risk of not developing the marketplace.

A conundrum and needs a far more experienced economist than me (not an economist) to figure out whether it works or not ;).

[1] There are obviously other options, such as enforcing mandatory ISP licensing and making it a component of becoming an ISP - I've seen this in some middle eastern countries.  Another interesting alternative would be the Government using SOE asset Orcon to become a market de-stabiliser by offering plans like that.  Of course, that could be construed as very anticompetitive.

  SamF: I haven't seen any recenly (Ihug USED to do this but have since stopped). I also always wondered why unmetered uploads weren't the norm considering that most wholesale connections are symmetrical and therefore there must be a VAST amount of upload bandwidth languishing to waste out there.

However, I believe that the real reason for charging for uploads is that it gives ISPs a cheap / easy way to make a bit more money (it effectively gives customers less download quota to consume).

But yes, I agree, uploads it really should be unlimited, I'd even pay slightly more for the privilege!

I believe the reason comes from the way Telecom UBS was initially contracted.  There was a contractual obligation to ISPs to only transfer X GB per month across their Telecom interconnect links, where X was based on subscriber numbers * 10GB + some safety margin.  This was for bidirectional traffic, not separated into upstream/downstream.  I believe this is the reason Ihug and others were forced to stop offering free upstream traffic[2].  Of course, the cynics can also look at this as a way to stretch revenue and margins to the maximum from subscribers - which is also likely to be the case, particularly where UBS is not relevant any longer.

As a side note, xPON, Wireless and HFC networks have restrictions around upstream bandwidth - so it isn't always feasible to offer unlimited upstream data, depending on technology choice in the access network.

[2] Citation: http://www.nethistory.co.nz/index.php/Chapter_21_-_Broadband_Breakthrough_-_The_Battle_to_Unbundle, quote:
"Then ISPs received notification from Telecom that it would be enforcing ‘an average aggregate data limit per customer’ and charging a premium if overall upload traffic exceeded a specified monthly data cap. While this provision had been in the small print since 2004 it hadn’t been enforced until now. Ihug, which had been offering free upload speeds on most of its accounts, would have to add upload costs to customers’ download data caps from 1 July. Incensed at the move, it asked the government to exclude such charges in the new regulations."

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Ultimate Geek

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  Reply # 236971 19-Jul-2009 21:15 Send private message

Screeb: That's the result of poor network investment and lack of local competition. Like I say, companies like Verizon have no problems.

It's the result of controlling network investment and maximising revenue and margins, which can be influenced by technology choice (poor or not) and competition.

I'd love to hear your evidence that "Verizon have no problems".  While they will use their PR machine to leverage what Comcast and TWC are doing in their favor, Verizon absolutely have their own set of network management issues to deal with.  I can't really go into a lot of detail, however Verizon is a customer of my employer and I have seen the internals of their network.

Verizon is also - like AT&T, but unlike Comcast and TWC - in the beneficial position of being a default-free Tier 1 operator.  Their costs to operate their network in terms of bandwidth to the Internet is close to zero, given the dominance of their global network.

Screeb: So your personal experience trumps various studies and reports released by organisations such as OECD that show findings to the contrary?

I'm not sure I have ever seen a report that has been as black-and-white about the population density as you are saying.  I'm willing to be educated, if you have some information to pass on.

I stand by my claims that population bases, subscriber bases, and population density do have a significant amount to do with broadband networks and the costs of them.  It is not (and never will be) the only factor involved, but it is significant.

A simple example is Singapore vs. New Zealand - I've been heavily involved in networks in both countries.  Populations are approximately the same (4.8M and 4.3M), but the population density is much different (6814/km2 and 15/km2) - I've used Wikipedia as my source. 

An operator in Singapore can get away with 9 or less COs to cover the country with broadband services. An operator in New Zealand can't - Telecom has 700+ exchanges and 3500+ cabinets.  This is a direct correlation of population density vs. investment required.  There is no way that New Zealand can derive significant additional revenue from an equivalent population base to defray this capital cost.

This then heads down the rocky road of Governments and investment tactics, where it starts to become less interesting.  Nationalisation of the network, fund it out of the consolidated fund, etc.  Pros and cons, for sure - and definitely I think getting outside the scope of GeekZone ;).

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Ultimate Geek
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  Reply # 236977 19-Jul-2009 21:35 Send private message

PenultimateHop:
I have to disagree.  Network investment is driven by revenue, and revenue comes from having a subscriber base.  The bigger your subscriber base, the more your revenue, the more money you have to invest.  The bigger your subscriber base, the more you can normalise your cost per subscriber to an average price.  With a small subscriber base, a single subscriber can make your operation unprofitible.  Offering "unlimited local traffic" is definitely a use-case here, because you may have 99% of subscribers who use 1T a month of local traffic each - which will become unprofitible.  If your subscriber base is more average, it is easier to offer.

I am not familiar with Romania so I will have to read a little further, but a quick skim of the Wikipedia article indicates it's not quite as straightforward as you claim (e.g. 33% of their broadband market is delivered via wireless).

Please understand I am not saying that "bigger is better", as from a service perspective the reverse is usually the case, but I am saying that when an operator has significant revenue and a subscriber base covering all demographics, you have much more flexibility.


NZ ISPs have enough customers that the "average" user is certainly not significantly different than the average user of a larger ISP. Your case of "99% of subscribers who use 1T a month of local traffic each" may indeed be unprofitable, but that is an extremely unlikely case. So much so that it isn't worth thinking about. Your argument might work in the case of extemely small ISPs in NZ (< 1000), but not in the case of Telecom, TelstraClear, Orcon, Vodafone, etc.


I suspect it might encourage P2P traffic locally and encourage some innovation in local products and services, but overall it's not likely to reduce traffic that much - the majority of production is offshore.


Given P2P comprises a large portion of traffic, I would be very surprised if uncapped national traffic didn't reduce international traffic noticeably. Perhaps not by a huge margin, but I would think maybe we would see a %5 reduction in international bandwidth usage.


Actually, I think New Zealand is a highly peered economy.  APE and WIX have significant number of participants and extremely low (some might say too low) barriers to entry.  The absence of the two largest players is an interesting artefact, but given that:

1. The majority of content in New Zealand is not hosted by TelstraClear or Telecom;
2. The majority of eyeballs in New Zealand are hosted by TelstraClear and Telecom;


The absence of Telecom and TelstraClear makes NZ essentially NOT a "highly peered economy". Unless the vast majority of ISPs are peered, peering is essentially useless for the majority.


So where does the additional revenue come from to cover this cost?  ISPs in New Zealand already publicly state they make negative or zero margins on residential broadband services, but people expect them to shoulder additional cost with no incremental revenue?  That's not a reasonable expectation.


Given that most ISPs in NZ essentially re-sell Telecom access (in some form), the onus is on Telecom. Telecom could eat most the cost. Will they? No, of course not. Like I said, the government needs to do it.

As a side note, if ISPs are making negative or zero margins on residential services, then perhaps they're in the wrong business (of course, ideally they should be able to make decent profits, but if they can't then they should either get out of the business or push the government to intervene).


A bad ISP perhaps - but an ISP in an economy that's often held up as "highly connected" and "I wish I could live there" examples.


I've never heard that about Singapore. Especially in relation to some other countries (like Sweden).


I was in Sweden a month ago, and a few friends I visited did not have the option those particular broadband services.  HFC was the norm at 10Mbps.


Which is still better than anywhere in NZ.


I am also intrigued by the general feelings from people - they obviously value Internet connectivity and the benefits it brings, but they just don't seem to be willing to pay for it on a reasonable cost+margin basis.  Why is that?


People ARE willing to pay a reasonable cost+margin. The problem is that the prices are artificially high due to Telecom's effective monopoly and underinvestment. People are NOT willing to pay those inflated prices.

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Ultimate Geek
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  Reply # 236978 19-Jul-2009 21:52 Send private message

PenultimateHop:
I'd love to hear your evidence that "Verizon have no problems".  While they will use their PR machine to leverage what Comcast and TWC are doing in their favor, Verizon absolutely have their own set of network management issues to deal with.  I can't really go into a lot of detail, however Verizon is a customer of my employer and I have seen the internals of their network.

Verizon is also - like AT&T, but unlike Comcast and TWC - in the beneficial position of being a default-free Tier 1 operator.  Their costs to operate their network in terms of bandwidth to the Internet is close to zero, given the dominance of their global network.


From my reading of many people's experience with FiOS over the years, it is by far the prefered broadband solution. People report extremely good speeds and latency, and the ability to download vast amounts each month without getting slowed down, or receiving letters asking them to stop it, in contrast to some ISPs like Comcast who throttle P2P, write letters if lots of bandwidth is used, and often have poor speeds.


I'm not sure I have ever seen a report that has been as black-and-white about the population density as you are saying.  I'm willing to be educated, if you have some information to pass on.

I stand by my claims that population bases, subscriber bases, and population density do have a significant amount to do with broadband networks and the costs of them.  It is not (and never will be) the only factor involved, but it is significant.

A simple example is Singapore vs. New Zealand - I've been heavily involved in networks in both countries.  Populations are approximately the same (4.8M and 4.3M), but the population density is much different (6814/km2 and 15/km2) - I've used Wikipedia as my source. 

An operator in Singapore can get away with 9 or less COs to cover the country with broadband services. An operator in New Zealand can't - Telecom has 700+ exchanges and 3500+ cabinets.  This is a direct correlation of population density vs. investment required.  There is no way that New Zealand can derive significant additional revenue from an equivalent population base to defray this capital cost.


http://www.oecd.org/document/54/0,3343,en_2649_34225_38690102_1_1_1_1,00.html

See the Broadband penetration and density (Dec. 2008) in the Coverage and Geography section.

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Ultimate Geek

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  Reply # 236991 19-Jul-2009 22:35 Send private message

Screeb: NZ ISPs have enough customers that the "average" user is certainly not significantly different than the average user of a larger ISP. Your case of "99% of subscribers who use 1T a month of local traffic each" may indeed be unprofitable, but that is an extremely unlikely case. So much so that it isn't worth thinking about. Your argument might work in the case of extemely small ISPs in NZ (< 1000), but not in the case of Telecom, TelstraClear, Orcon, Vodafone, etc.


I have to disagree.  My experience combined with direct discussions with operators has shown me that this is not the case.  You need to have a significant (100s of thousands) subscriber base in order to average this out, given the extreme disparity between low, median, and heavy users.

Anecdotal evidence from the above operators (in particular Orcon) has indicated that a small population of the subscriberbase consumes the majority of bandwidth - and they are unable or find it difficult to normalise this.

Screeb: Given P2P comprises a large portion of traffic, I would be very surprised if uncapped national traffic didn't reduce international traffic noticeably. Perhaps not by a huge margin, but I would think maybe we would see a %5 reduction in international bandwidth usage.

Possibly - but I expect that the 5% would immediately be eaten up by other traffic.  Not necessarily a bad thing, as it effectively gives other services an increase in bandwidth to consume (meaning those who complain about YouTube performance will complain less).  It's not going to reduce cost to an ISP, though.

I am also interested in whether it will make as much a difference as you suggest - given P2P apps are slowly becoming topology aware, it's likely that the traffic could already be exchanged domestically anyway.  It would be interesting to perform a study on this, but it would largely depend on the mindset of the user and whether the pricing changes actually enforce a behavior change.

Screeb: The absence of Telecom and TelstraClear makes NZ essentially NOT a "highly peered economy". Unless the vast majority of ISPs are peered, peering is essentially useless for the majority.
Again, I disagree.  The absence of two operators vs the total peering base does not make it a lesser peered economy.

As outlined before, I am actually not sure that TelstraClear or Telecom's peering stance actually impacts any other eyeball operator - if anything it really gives them an advantage.

Several reports (from Bill Norton, Citylink, et al) have indicated that New Zealand is a highly aggressive market in peering and is very well interconnected.  We also have a reasonably high number of internet exchanges for our population base.  All of these are very good things.

Screeb: Given that most ISPs in NZ essentially re-sell Telecom access (in some form), the onus is on Telecom. Telecom could eat most the cost. Will they? No, of course not. Like I said, the government needs to do it.

As a side note, if ISPs are making negative or zero margins on residential services, then perhaps they're in the wrong business (of course, ideally they should be able to make decent profits, but if they can't then they should either get out of the business or push the government to intervene).

Broadly, I agree.  I would be interested in hearing your suggestions and analysis for Government intervention though.  Certainly forcing Telecom to reduce margins on their wholesale DSL service is an option, but it's worth looking at what else could be done beyond that to actually encourage innovation and investment, which will naturally turn competitive.

Screeb: I've never heard that about Singapore. Especially in relation to some other countries (like Sweden).

Well - I'd certainly like to live in Sweden!  However I like the tax rate I pay in Singapore (15% vs 56% in Sweden), so obviously there are tradeoffs ;).

However, Singapore has often come up in discussion on GeekZone and in the media recently, particularly given the FTTH iniatives in Australia and New Zealand, as they are taking a very aggressive approach to developing what they see as critical infrastructure:

http://www.ida.gov.sg/Infrastructure/20090204113013.aspx

Sweden is also unique given their language - something that New Zealand, Australia, and Singapore don't really have.

Screeb: Which is still better than anywhere in NZ.

I thought ADSL2plus was widely available in New Zealand now?  TelstraClear also offer 10M+ plans on their HFC network, as do several other niche operators.

It's also worth noting that depending on which side of the technology religious debate you sit on, HFC is not an ideal technology for mass market broadband due to the shared and constrained nature of the upstream.  It can definitely be argued that is a drawback and not as good as other economies.

Screeb: People ARE willing to pay a reasonable cost+margin. The problem is that the prices are artificially high due to Telecom's effective monopoly and underinvestment. People are NOT willing to pay those inflated prices.

Again, broadly agree - but I suspect that people are not willing to pay the true cost (and reasonable margin).  Unfortunately it's a mentality thing - and an interesting study on NZ mindsets.

(Edit to add a comment on HFC networks)

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Uber Geek
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  Reply # 236995 19-Jul-2009 22:45 Send private message

nate: I like the idea of the peering exchanges, the uphill battle would be convincing the government that the usage would warrant the significant investment in such infrastructure.



Ragnor: I can think of two legitimate and viable uses of heavy local traffic straight away, there's probably many more:

Remote backup services
On Demand Pay TV, Movies, Music (like IPTV)




Good thinking, I think the IPTV would have to be widely adopted by someone such as Sky for everyone to take it up. Remote backup would only be used by the true geeks, like those here :)


Government doesnt invest in peering unless a university decides to run a little peering business on the side. The peering switch requires users to connect, so of course port fees and related fibre services generate revenue.

The subscriber density issue has no effect on the economics of actual peering or how to get fibre to an population area, and I am sure most ISP use Ethernet equipment so its at least as fast as the peering switches. Most ISPs would have as much local bandwidth as any NZ peering exchange can cope with. Main problem is how much it costs to buy nationwide backhaul from residential subscribers through Telecom's network, and how many other residential customers would start complaining about congestion in their area or on their ISPs main Telecom link.

There is also the question of how much bandwidth can APE handle. Its a big switch but I dont think especially fast. Maybe someone could comment on how much close APE would be to having serious congestion in the case that local IPTV suddenly attracted several thousand residential users. Or is it already congested? That would explain why ny nationwide traffic is so slow already!




Qualified in business, certified in fibre, stuck in copper, have to keep going  ^_^

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Ultimate Geek

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  Reply # 236998 19-Jul-2009 22:49 Send private message

Screeb: From my reading of many people's experience with FiOS over the years, it is by far the prefered broadband solution. People report extremely good speeds and latency, and the ability to download vast amounts each month without getting slowed down, or receiving letters asking them to stop it, in contrast to some ISPs like Comcast who throttle P2P, write letters if lots of bandwidth is used, and often have poor speeds.

Sure.  Their service has a good reputation and they have managed it well.  Of course, the flipside is in the early days of Comcast, TWC, @Home (remember them?), Cox, they all had the same reputation.  Locally in New Zealand, Xnet and Slingshot had those reputations as well.  Over time - they all have developed issues.

Verizon is extremely aggressive in their FiOS footprint to try and drive as much revenue back to them from the MSOs due to their declining revenue in other areas.  They have also developed a lot of controversy over their tactics with disconnecting the copper when FiOS service is deployed into a residence; not to mention the recent issues over their installation quality.

I suspect you will also find unhappy subscribers on their network - but in general they are a good operator, to date, but absolutely they are working internally to reduce their costs as any business does.  This includes pushing their vendors to develop some increasingly complex QoS tools for their GPON networks.

Screeb:

http://www.oecd.org/document/54/0,3343,en_2649_34225_38690102_1_1_1_1,00.html

See the Broadband penetration and density (Dec. 2008) in the Coverage and Geography section.

I don't see any conclusions being drawn from that.  What I can see is of the top-10 countries, only 4 have similar or lower population densities to New Zealand.  I can also see that as population density increases, broadband penetration does not necessarily increase (which causes problems with the argument that broadband is a necessity). 

Interesting statistics - but as with all statistics, drawing conclusions is difficult and the interpretations range widely.  Only one of the countries in the top 10 is an English speaking country; but they all have very (much) colder winters than New Zealand.

I still stand by my original comments: population and population density are directly related to the deployment and cost of broadband services. 

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Ultimate Geek
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  Reply # 237001 19-Jul-2009 22:55 Send private message

PenultimateHop:
I have to disagree.  My experience combined with direct discussions with operators has shown me that this is not the case.  You need to have a significant (100s of thousands) subscriber base in order to average this out, given the extreme disparity between low, median, and heavy users.

Anecdotal evidence from the above operators (in particular Orcon) has indicated that a small population of the subscriberbase consumes the majority of bandwidth - and they are unable or find it difficult to normalise this.


Most ISPs with "unlimited" plans have a fair use policy, so if a small majority were using a majority of the bandwidth then they should be rate limited if they don't stop.


Again, I disagree.  The absence of two operators vs the total peering base does not make it a lesser peered economy.

As outlined before, I am actually not sure that TelstraClear or Telecom's peering stance actually impacts any other eyeball operator - if anything it really gives them an advantage.

Several reports (from Bill Norton, Citylink, et al) have indicated that New Zealand is a highly aggressive market in peering and is very well interconnected.  We also have a reasonably high number of internet exchanges for our population base.  All of these are very good things.


Telecom and TelstraClear's lack of peering directly hurts their own customers. Given that those customers make up the majority of broadband subscribers, then it is NOT a good thing overall. Perhaps a good thing for most ISPs, but not a good thing for most consumers.


Broadly, I agree.  I would be interested in hearing your suggestions and analysis for Government intervention though.  Certainly forcing Telecom to reduce margins on their wholesale DSL service is an option, but it's worth looking at what else could be done beyond that to actually encourage innovation and investment, which will naturally turn competitive.


I don't have any suggestions, but I know that a solution is possible. I think the national FTTH project will probably solve the issue, but that's a bit far away.


Sweden is also unique given their language - something that New Zealand, Australia, and Singapore don't really have.


I'm not sure that is entirely the case - according to Wikipedia, 89% of Swedes can speak English. No doubt they consume a lot of international material.


I thought ADSL2plus was widely available in New Zealand now?  TelstraClear also offer 10M+ plans on their HFC network, as do several other niche operators.


Yes, but not uncapped, and speeds are nowhere near the ADSL2+ max for the average user anyway (I believe it's slightly above 10Mbps average).


Again, broadly agree - but I suspect that people are not willing to pay the true cost (and reasonable margin).  Unfortunately it's a mentality thing - and an interesting study on NZ mindsets.


What makes you say that? How is NZ any different from other countries? Or do you think that the cost to provide broadband in NZ is neccessarily much higher than other countries? That would be correct at the moment, of course, but I'm not exactly proposing that ISPs give everyone uncapped plans for cheap - government intervention should bring prices and plans to international level if done right. Once that is achieved, I don't see any reason why NZers would be less likely to pay for it than those in other countries.

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