Unless you’ve been living under a rock you’ll know that the Commerce Commission last year announced plans to cut the price of regulated xDSL based broadband products in NZ. UBA (Unbundled Bitstream Access) is the base Chorus wholesale product that every ISP uses to deliver xDSL based broadband (ADSL, ADSL2+ and VDSL2) in New Zealand.
In recent months there has been a lot of discussion within the NZ telco space about Chorus plans to offer a new commercial xDSL based product. This commercial product will offer vastly superior performance than the current regulated offering, but will come at a price premium. Opinion in the industry is split over these moves – some see it as very smart move by Chorus to offer end users an enhanced product; some see it as a cynical move by Chorus to make price cuts irrelevant and force ISPs to pay extra (in effect maintaining the current price) for Boost products to meet the growing demand from data hungry customers.
My personal view is that it’s proof the Commerce Commission are inept and lack any real understanding of the broadband space they’re currently trying to regulate. Essentially they’ve been pwned by Chorus who’s plan is to offer a commercial xDSL offering to ISPs capable of delivering an average of 5Mbps per user over a 15 minute period, while users of the Commerce Commission regulated offering are stuck with an outdated regulated product with a regulated design target of 32kbps per user delivered over a 15 minute period. The fact the Commerce Commission publically see no issue with a handover dimensioning target of 32kbps per user in 2014 shows a real lack of understanding of the industry they’re overseeing.
The Commerce Commission today released the latest Chorus submission on their Boost offerings, which you can read here.
In that submission where some very interesting stats on broadband usage and data caps in New Zealand which you can see below. Namely that:
Chorus stats now put the average NZ internet usage at 41GB per month as of mid 2014
And the following chart showing the mix of caps
Other related posts:
Spark Paging network shutdown – the event nobody cares about? Not quite.
UFB voice, power cuts, copper invincibility and mainstream media FUD.
New Zealand’s growing BUBA problem (AKA I feel sorry for you if you’re on a Conklin)
Comment by Zeon, on 22-Jul-2014 17:28
So it seems at the moment that while Chorus is mandated to provide a minimum speed to users of the regulated copper offering, for ADSL2 style infrastructure they practically provide whatever speed the line can support all the way back to the ISP.
With Boost they are looking to continue this but only if the ISPs pay more otherwise they will provide the regulated service?
Thus unless people pay more, their service will get really slow?
If so makes sense for Chorus.
Comment by Ragnor, on 23-Jul-2014 13:54
32kbps is a minimum not a maximum there's no reason for Chorus to artificially restrict supply other than than "monopoly player" bad behaviour.
The ComCom should be regularly reviewing the minimums that were negotiated by savy Telecom Wholesale staff years ago.... but they wouldn't have to if Chorus just delivered a proper service instead of coming out with hairbrained schemes to restricted one offering while selling a more expensive unrestricted
Chorus knew that the current copper pricing methodology was going to move from "retail minus" to "cost plus" and that that cost plus price would be based on international benchmarks years.
They got a bonus 3 year delay, they should have been prepared.
Natural monopolies will always do what monopolies do (maximise profit via artificial scarcity), we need a strong, smart regulator around because un-regulated was (and would be) worse.
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