Telecom Wholesale deploying VDSL2

Forums › Spark New Zealand (including Skinny and BigPipe) › Telecom Wholesale deploying VDSL2

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Chorus

#194730 8-Feb-2009 13:07

Screeb:
pjamieson: I also get annoyed when people talk about "Telecom's monopoly"! If companies don't like Telecom doing what any other business in their place would do then they are quite welcome to build their own multi-billion dollar network around the country! But no they went crying to mummy Labour (or should I say Nanny-Labour -?who privatised Telecom in the first place) and said they wanted the rules changed because they don't have a business case to exist.

Don't get me wrong, Telecom have made some big mistakes and probably should have operationally separated before, but no one is calling for Vodafone or Telstra-clear to do this are they?? I don't think it is the governments place to do this kind of thing and one of the many reasons Labour got turfed out on their ear.

I agree with everything else you said, but I take issue with this. Telecom wasn't a simple "monopoly", they were (and remain) a natural monopoly, something quite different. It would be incredibly wasteful and uneconomic for any company to duplicate the copper Telecom owns all around the country, thus they are forced to buy wholesale access. Telecom used their natural monopoly to extract the highest prices possible (which is to be expected of any monopoly), thus the government saw fit to regulate it. Regulation of natural monopolies is essential, especially in infrastructure. Imagine if a private company owned all the roads in the country, and charged large fees for using them - I'm sure you wouldn't suggest that another company suck it up and build their own roads, rather than asking the government to regulate them.

Sure there are alternatives to Telecom's network - wireless and satellite for example - but they aren't equal replacements. Just like helicopters and planes aren't equal replacements for roads.

Um, I'm not convinced on this. Although I can see some of the benefits in LLU, I'm just not comfortable in a government taking companies property rights away from them like this. It is their property, they bought it fair and square, they were not doing anything illegal. I just find it outrageous that they can do this and it doesn't give me faith to get back into business in NZ (or overseas investors), and we can see the devastating effect it had on Telecom's share price, and therefore the wealth of the NZ Stock market.

Think about this, if you owned a mechanics garage on a street for years and the government wanders along and says "Yeah there is this guy who wants to set up a garage, but doesn't have the money or business case, so we are going to force you to let him have a corner of your workshop and he'll poach your customers as they walk in the door and you have to let him, and we'll tell you how much rent you can charge him". Ridiculous.

No one is "forced" to buy wholesale access from Telecom, as I said they can set up their own [fibre] network, as many companies have, or go do something else. Your road example is a bad one. I don't agree to the wasteful option, if they want to play by their own rules, their own network should be the only option. I think you have listened to the media hype too much instead of having a balanced opinion like the other readers on this forum. We have some of the best priced BB in the world, especially considering we're in the middle of nowhere. Labour lost the election, people aren't going to be told what to do anymore, move on.

Regs:
pjamieson:
I'm about 200m from Auckland Central exchange so am keen to know.

is that the line of sight distance between your front door and the exchange, or in wire distance between your wall jack and their dslam?

i've seen instances where people are a couple of km from an exchange but have more double that distance in wires. Also two neighbours - one connected to the new shiny cabinet in between their houses, the other at the end of a very long, unstable wire to the nearest exchange..

you've probably got a decent line, but you just never know... :)

I was already thinking that, ie: 100m LOS, so 200m of wiring, but thinking about it in a bit more detail it's probably 200m LOS and 500m wiring and I'm getting 23mbps on DSL2+. Either way I'm hoping for the full 50mbps in March! :)

Screeb

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Ultimate Geek

#194791 8-Feb-2009 20:42

pjamieson:
Um, I'm not convinced on this. Although I can see some of the benefits in LLU, I'm just not comfortable in a government taking companies property rights away from them like this. It is their property, they bought it fair and square, they were not doing anything illegal. I just find it outrageous that they can do this and it doesn't give me faith to get back into business in NZ (or overseas investors), and we can see the devastating effect it had on Telecom's share price, and therefore the wealth of the NZ Stock market.

Think about this, if you owned a mechanics garage on a street for years and the government wanders along and says "Yeah there is this guy who wants to set up a garage, but doesn't have the money or business case, so we are going to force you to let him have a corner of your workshop and he'll poach your customers as they walk in the door and you have to let him, and we'll tell you how much rent you can charge him". Ridiculous.

No one is "forced" to buy wholesale access from Telecom, as I said they can set up their own [fibre] network, as many companies have, or go do something else. Your road example is a bad one. I don't agree to the wasteful option, if they want to play by their own rules, their own network should be the only option. I think you have listened to the media hype too much instead of having a balanced opinion like the other readers on this forum.

Maybe you should read up on natural monopolies and utilities. It is a completely different situation than your mechanics example. And what's wrong with my road analogy? Would you like another one? How about water pipes? Should there be multiple underground pipes under your street owned by different companies, waiting for you to choose which one to connect with?

I haven't listened to "media hype", I've read many reports by various organisations such as the OECD, Internet NZ, etc who have done studies regarding the subject. Have you?

We have some of the best priced BB in the world, especially considering we're in the middle of nowhere.

Haha, what? Tell that to the statistics. BTW, "price" is a bad measure. I could sell you a broadband connection for an amazing $0.10 / month!*

*8Kbps with a 1KB data cap per month and 20% uptime.

Labour lost the election, people aren't going to be told what to do anymore, move on.

What? National are the ones wanting to build a FTTH network. I have never once voted Labour.

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Snowflake

#195014 9-Feb-2009 22:54

Screeb:
We have some of the best priced BB in the world, especially considering we're in the middle of nowhere.

Haha, what? Tell that to the statistics. BTW, "price" is a bad measure. I could sell you a broadband connection for an amazing $0.10 / month!*

*8Kbps with a 1KB data cap per month and 20% uptime.

I think our consumer BB pricing is mostly ok.

I would like to see business grade broadband prices come down a bit more however and more people moving to a business grade product for running their businesses on.

Unfortunately I think Telecom is largely to blame when it comes to businesses buying consumer grade product. Firstly they charged/charge too much for frame relay, fibre, isdn (in the past, who would buy it now?), and xdsl. Subsequently they cut the prices on the adsl 'business' plans to the point where the gap between adsl and other more robust technologies was too great for most businesses to contemplate making the jump.

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Screeb

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Ultimate Geek

#195035 10-Feb-2009 04:16

Regs:
I think our consumer BB pricing is mostly ok.

How? Just compare data cap sizes / existence and contention ratios to other OECD countries and you'll see it's not all sunshine and roses. I guess it depends how you define "ok" though. It may be "ok" for you, but for many people it isn't. The other thing is so many people just don't realise the benefits of better internet access quality. Lots of people were content with dial up, but when they eventually got broadband, they realised the internet doesn't stop at emails, and that they could do all sorts of new things. If you had truly "unlimited", fast broadband, you* would soon find yourself storing large files offsite, doing offsite backups, streaming HD videos (ala NetFlix), etc. That is currently not possible in NZ for a reasonable price.

*maybe not you personally, but many people.

cyril7

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#195044 10-Feb-2009 07:33

Thought I'd add my 2 cents worth. I should come here more often really :)
To me VDSL2 is one of those technologys that sounds great in theory, and looks great in marketing but I can't help but take a cynical viewpoint of its deployment.

Not so much the timeframe it takes to upgrade exchanges/cabinets to VDSL2 (good things take time, etc) but can't help but think that uplink given for those cabinets will not be large enough to accomodate VDSL speeds. So people will be connecting to their exchange at 50mbps but from there they may only get 10.

The ISAM 7330 FTTN system is based around a quite high capacity backplane. Essentially it consists of a host that contains a 24Gb/s backplane ethernet switch, connected to this are 7 GigE agreegratable uplinks, 10 GigE expansion downlinks and a local GigE port to the directly attached set of 192line ports. Each of the 10GigE downlinks can then attach to Expansion shelfs which consist of a GigE uplink (to the host) and 192 line ports. Obviously all GigE links are fibre.

So if we concider a fully stacked setup you can have 7Gigb/s feeding 2112ports, if all ports were running at full chat you could theoretically support 3.3Mb/s on each of those ports, but we all know thats not a real situation. In simplistic terms Commercial contention ratios are in the 10-20 mark, domestic 20-50, so lets pick a contention ratio of 20, way above what we have on any other current solution for domestic, this would mean you could be sold a 66Mb/s service.

Now all this assumes that Telecom would provide that level of uplinks, and all local system reticulations would have a full set of 10 cascaded expansion chassis below the host. Telecom is rolling 216fibre cables so its not a lack of physical capacity within the local loop, only a question of what level of capacity Telecom chose to provide.

Cyril

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Snowflake

#195192 10-Feb-2009 21:05

Screeb:
Regs:
I think our consumer BB pricing is mostly ok.

How? Just compare data cap sizes / existence and contention ratios to other OECD countries and you'll see it's not all sunshine and roses

But you cant simply compare costs. It cost a lot more to deliver the bandwith to our teeny island in the middle of nowhere and then distribute it to each household.

Asian countries have ridiculuosly high population density so its cost effective to deliver FTTH there and they also generate and consume the bulk of their own material thus requiring less internation capacity.

United States generates and consume much of their own data and has several areas of high density population. Europe also has some fairly high densities and high levels of locally generated and consumed content.

New Zealand and Australia (which have similarly priced plans) consume mostly content generated in US, Europe and Asia and hardly any local content therefore the bulk of the bandwidth has to be delivered over international pipes. Both NZ and Australia also have less combined population and lower population densities than most of the countries/cities in europe and the US. The raw cost per GB consumed per capita is going to be way higher than the same calculation made in other countries.

If you forget about dsl and look at the cost of other services - e.g satellite - in the US or europe then you still have to take into account the our isolated location and low population density. There are a lot more satellites hovering over the US and Europe, for example, and there are potentially a lot more customers so the costs are going to be lower for them for these services too.

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munchkin

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#195194 10-Feb-2009 21:07

Yet again, it seems this thread - like all others before it - has gone off topic...

Quic Broadband

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DjShadow

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#195199 10-Feb-2009 21:20

to help drag it back on topic, what kind of routers (brands) should we expect to see once VDSL2 comes out and would it be safe to assume without going onto a VDSL2 plan that if I got a router for it I could gain a VDSL2 speed connection but be limited to 24mb? (top speed of ADSL2+)

Screeb

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Ultimate Geek

#195211 10-Feb-2009 22:04

Regs:
But you cant simply compare costs. It cost a lot more to deliver the bandwith to our teeny island in the middle of nowhere and then distribute it to each household.

Asian countries have ridiculuosly high population density so its cost effective to deliver FTTH there and they also generate and consume the bulk of their own material thus requiring less internation capacity.

United States generates and consume much of their own data and has several areas of high density population. Europe also has some fairly high densities and high levels of locally generated and consumed content.

New Zealand and Australia (which have similarly priced plans) consume mostly content generated in US, Europe and Asia and hardly any local content therefore the bulk of the bandwidth has to be delivered over international pipes. Both NZ and Australia also have less combined population and lower population densities than most of the countries/cities in europe and the US. The raw cost per GB consumed per capita is going to be way higher than the same calculation made in other countries.

If you forget about dsl and look at the cost of other services - e.g satellite - in the US or europe then you still have to take into account the our isolated location and low population density. There are a lot more satellites hovering over the US and Europe, for example, and there are potentially a lot more customers so the costs are going to be lower for them for these services too.

Just because it may not be as cost effective to provide broadband in NZ as other countries doesn't mean what we have is good. There's no point in accepting defeat and saying "well, we're a small country in the middle of nowhere, so this is as good as we can get". We can overcome our disadvantages by utilising government investment.

Also, according to SCC, "Southern Cross Cable Network sales director Ross Pfeffer says medium to heavy broadband users pay an average of only US$3.50 a month to use the network". (link) That makes it sound international bandwidth has little to do with our broadband cost... And given the costs of building our existing BB networks have no doubt been payed off already, population density no longer factors into the equation.

Anyway, as the other said, we're getting back off topic.

On topic, I'm betting that VDSL2 from Telecom will be very expensive (probably $150 min / month just for the connection wholesale).

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Snowflake

#195217 10-Feb-2009 22:57

Screeb:
On topic, I'm betting that VDSL2 from Telecom will be very expensive (probably $150 min / month just for the connection wholesale).

well telstraclear has set a precedent for VDSL pricing (following, note business product only) so telecom may have to follow a similar pricing structure. If they make it cheaper they will probably be accused of abusing their 'natural monopoly" position to undercut competitors....

http://www.telstraclear.co.nz/business/products/internet/biznet/

BizNet Gold Up to 10Mbps download (2Mbps upload) $49.95 Cable and VDSL2 1G, 5G, 10G, 20G packs
BizNet Premium Up to 15Mbps download (2Mbps upload) $199.95 VDSL2 catchments only 1G, 5G, 10G, 20G packs
BizNet Supreme Up to 30Mbps download (7Mbps upload) $399.95 VDSL2 catchments only 1G, 5G, 10G, 20G packs

now remember that the wholesale cost of each UCLL line is around $20/month - it doesnt charge based on speed of that local loop.

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Screeb

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Ultimate Geek

#195231 11-Feb-2009 02:20

Regs:
well telstraclear has set a precedent for VDSL pricing (following, note business product only) so telecom may have to follow a similar pricing structure.

Very doubtful, given TelstraClear's VDSL is only available in very select areas.

If they make it cheaper they will probably be accused of abusing their 'natural monopoly" position to undercut competitors....

No, because the local loop is already unbundled, and the sub-loop will be too.

http://www.telstraclear.co.nz/business/products/internet/biznet/

BizNet Gold Up to 10Mbps download (2Mbps upload) $49.95 Cable and VDSL2 1G, 5G, 10G, 20G packs
BizNet Premium Up to 15Mbps download (2Mbps upload) $199.95 VDSL2 catchments only 1G, 5G, 10G, 20G packs
BizNet Supreme Up to 30Mbps download (7Mbps upload) $399.95 VDSL2 catchments only 1G, 5G, 10G, 20G packs

These prices are useless to compare against anyway, because they are business plans, and TelstraClear's plans have always been expensive.

now remember that the wholesale cost of each UCLL line is around $20/month - it doesnt charge based on speed of that local loop.

VDSL2 will be a new product, so they can charge whatever they like AFAIK. I could be wrong, but I doubt Telecom would offer 50/20 speeds to ISPs for $20/month.

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Snowflake

#195422 11-Feb-2009 22:49

Screeb:
Regs:
now remember that the wholesale cost of each UCLL line is around $20/month - it doesnt charge based on speed of that local loop.

VDSL2 will be a new product, so they can charge whatever they like AFAIK. I could be wrong, but I doubt Telecom would offer 50/20 speeds to ISPs for $20/month.

Actually I was pointing out the cost of the wholesale local loop portion that telstraclear would have to pay per subscriber. Of course they also have to pay for space rental at the exchange, the dslam equipment and backhaul too (no doubt this runs over telstraclear fibre, not telecom fibre) so perhaps that explains why the 30/7 product starts at $400 per month....

As for the telstraclear vdsl being a business product - it doesnt mention business grade things like thier Business Internet Access products do such as

Avoid the broadband blockage. ISPs combine lots of broadband customers onto common equipment, to create an affordable product. With BIA you never share your access bandwidth with more than 3 others, and usually your access is exclusive. In practise you won’t hit any congestion inside the TelstraClear network. For you, it means your throughput closely follows your speed for local traffic.

Business Internet Access is TelstraClear’s premium Internet service. It provides fast, configurable, highly reliable, high performance Internet access

you do get this however:

BizNet provides businesses with superior internet access and a better broadband experience. Being built on our next generation fibre technology means you get faster internet speeds and greater security with the ability to support the extra capacity of larger businesses with growing demands.

So on the face of it it would appear to me to be more like regular ADSL business plans - i.e. best effort and high contention. Its probably only a "business" plan cause they wouldnt be able to sell it to consumers given the price points.

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pjamieson

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Chorus

#196353 17-Feb-2009 18:31

Screeb: Just because it may not be as cost effective to provide broadband in NZ as other countries doesn't mean what we have is good. There's no point in accepting defeat and saying "well, we're a small country in the middle of nowhere, so this is as good as we can get".

Even though everyone else (except you and in my opinion the media - that most of the public go along with) is agreeing with this view it doesn't mean those on this thread are accepting defeat. We are saying we understand the situation and reasons behind it and realise there is a gradual plan to progress it and we will keep pushing for that end point as much as anyone. But in the mean time with the features available we are happy (although keen for better) with what we have (in my example 23mbps, about to go up to 40-50mbps).

Screeb: Maybe you should read up on natural monopolies and utilities. And what's wrong with my road analogy? Should there be multiple underground pipes under your street owned by different companies, waiting for you to choose which one to connect with? I haven't listened to "media hype", I've read many reports by various organisations such as the OECD, Internet NZ, etc who have done studies regarding the subject. Have you?

Well in my already existing knowledge, as well as a little more reading lately, no I don’t agree with this view. Firstly the widely held view now is that Telecommunications is not a natural monopoly due to the cheaper technology and alternatives available (eg: it is cheaper now to roll out fibre than it was to roll out copper 50 years ago, also wireless etc that is available). Secondly I don’t think you can compare water pipes and roads to Telecomms. Telecomms is not a necessity of life and yes duplicating those would be wasteful, but not Telecomms (as there are so many ways to do it).

A natural monopoly is defined by the economies of scale of setup. I don’t think Telecomms has a high setup cost vs marginal cost. In my opinion and as others have said Telecomms competitors do not have to be setup across the whole country to compete with Telecom. They can start with the most profitable areas and roll out progressively. In uneconomical areas they can choose to bow out or use cheaper technology, but good enough, such as wireless. Otherwise their rollout is linear as every km of fibre laid is another km of customers available (simply explained). So to back up my original point, if you don’t like the prices, set up your own network, eg: Get involved with power companies and every time they dig up the street, lay some fibre (there are lots of economical solutions).

Screeb:
pjamieson: We have some of the best priced BB in the world, especially considering we're in the middle of nowhere.

Haha, what? Tell that to the statistics.

Press releases would say "The OECD estimates New Zealand has the 6th cheapest broadband services in the world". Maybe you should do some reading of your own?

Screeb:
Labour lost the election, people aren't going to be told what to do anymore, move on.

What? National are the ones wanting to build a FTTH network. I have never once voted Labour.

Sorry, I assumed since you were so pro-regulation / telling people/companies what to do and supported what Labour had done you were a Labour supporter. I apologise. I am not for regulation, although some of your statements have provoked a little bit of thought, but I still don’t agree with it fundamentally. National are also less regulation inclined, so I cross my fingers for the more intelligent public vs private partnership (hopefully mainly Telecom do this as otherwise it could be a waste of money).

May I suggest that for your own reasons (whatever they are), you may want a 100 meg connection with no cap, but only want to pay $30 pm for it? In that case, it will never happen in NZ and I suggest you move to America.

Screeb

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Ultimate Geek

#196382 17-Feb-2009 21:06

pjamieson:
Even though everyone else (except you and in my opinion the media - that most of the public go along with) is agreeing with this view it doesn't mean those on this thread are accepting defeat. We are saying we understand the situation and reasons behind it and realise there is a gradual plan to progress it and we will keep pushing for that end point as much as anyone. But in the mean time with the features available we are happy (although keen for better) with what we have (in my example 23mbps, about to go up to 40-50mbps).

Well, it seems you have a bit of bias here. You're able to get 23mbps, and are about to be upgraded to VDSL2 apparently. Sorry to inform you, but you are in the extreme minority. Just because you happen to live somewhere where you are able to get good speeds doesn't mean the rest of the country is in the same position.

Well in my already existing knowledge, as well as a little more reading lately, no I don’t agree with this view. Firstly the widely held view now is that Telecommunications is not a natural monopoly due to the cheaper technology and alternatives available

As I've mentioned earlier (don't remember if it was in this thread or another), alternatives to copper aren't equivalent alternatives. Some applications need fibre or fast copper-based solutions, and won't work sufficiently with wireless or satellite.

(eg: it is cheaper now to roll out fibre than it was to roll out copper 50 years ago, also wireless etc that is available).

And who was it that rolled out that copper in the first place? The government. And then Telecom bought it for a bargain. Also, the fact that it may be cheaper to roll out fibre now than copper 50 years ago is irrelevant. The difference between the profits possible for the first and only network in the country and the profits possible for a competing network are huge. ie, it is far more economical to build the first network (you have a monopoly) than the second (have to compete).

Secondly I don’t think you can compare water pipes and roads to Telecomms. Telecomms is not a necessity of life and yes duplicating those would be wasteful, but not Telecomms (as there are so many ways to do it).

I don't see how something being a "necessity of life" affects whether or not it is wasteful to duplicate its infrastructure. In fact, it would make even more sense if it was a necessity, as it would provide a vital backup in case the first one fails - but we don't do that anyway. I should also note that it's possible to live without running water (eg by collecting rain). And again, refer to what I said above about "alternatives".

A natural monopoly is defined by the economies of scale of setup. I don’t think Telecomms has a high setup cost vs marginal cost. In my opinion and as others have said Telecomms competitors do not have to be setup across the whole country to compete with Telecom. They can start with the most profitable areas and roll out progressively. In uneconomical areas they can choose to bow out or use cheaper technology, but good enough, such as wireless. Otherwise their rollout is linear as every km of fibre laid is another km of customers available (simply explained).

The problem with this is that it doesn't create competition. It's only "one-way". That is, if say Telecom has a network over the entire country, then if another company creates a network in one city, then that company just has to make their product slightly better than Telecom's. Telecom won't make their network better in that one city, because they don't want to get into a price war if they don't have to (eg Telecom never competed on broadband in Wellington and Christchurch with TelstraClear's cable network. All they did was reduce phone line cost, and it was still more expensive than TelstraClear's), plus, other regions would complain that they were paying higher prices, leading to regulation. The other thing is that it also results in only a select few areas being serviced, while the rest of the country is waiting forever for coverage in their area.

So to back up my original point, if you don’t like the prices, set up your own network, eg: Get involved with power companies and every time they dig up the street, lay some fibre (there are lots of economical solutions).

Sorry, but this is the worst argument ever ("if you want it done right, make your own company"). I don't have the time nor desire to run my own ISP. That shouldn't affect my stance on whether or not FTTH is a good idea. Never mind the fact that I don't think it would be economical (hence my position on government involvement).

Press releases would say "The OECD estimates New Zealand has the 6th cheapest broadband services in the world". Maybe you should do some reading of your own?

I've already discussed this with you. Price does not take into account speed, contention ratios, data caps, etc. So it's a completely useless metric when comparing quality of broadband. Sure we may be the 6th cheapest, but we don't get the same bang for our buck.

May I suggest that for your own reasons (whatever they are), you may want a 100 meg connection with no cap, but only want to pay $30 pm for it? In that case, it will never happen in NZ and I suggest you move to America.

I'm not expecting to pay $30/month for that. I would say $100 is a reasonable price.

FreakyKiwi

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Master Geek

#196698 19-Feb-2009 13:20

As an aside, I have 1 Telstra Customer using VDSL2 in CHCH....It appears Telstra havent done much work with this as they are having interesting routing and traffic issues among other things with this circuit...

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10

BizNet Gold	Up to 10Mbps download (2Mbps upload)	$49.95	Cable and VDSL2	1G, 5G, 10G, 20G packs
BizNet Premium	Up to 15Mbps download (2Mbps upload)	$199.95	VDSL2 catchments only	1G, 5G, 10G, 20G packs
BizNet Supreme	Up to 30Mbps download (7Mbps upload)	$399.95	VDSL2 catchments only	1G, 5G, 10G, 20G packs