simon14: Doesn't satellite internet have really high latency? Like 1000 to 2000 ms?

Under the Telecommunications Service Obligation (the old Kiwishare), Telecom is required to provide a home line, and access to a dial-up internet connection, for around 60,000 rural customers deemed “commercially non-viable”.
Each year, the Commerce Commission calculates how much it costs to serve these commercially non-viable customers (CNVCs).

The painful part for other telcos is that they have to chip in to help Telecom cover the cost of the commercially non-viable customers.

With annual High Court challenges thrown in, payments work on a two or three year lag, put last year the TSO cost was calculated by the commission at $70.7 million for the 2007/2008 year.

Vodafone was allocated easily the largest share, at $16 million (which is set by the commission, but has to be paid directly to Telecom). Most of the balance only exists on paper. The bizarre and complex formula behind the TSO requires Telecom to conduct a “thought experiment” on internal charges to allocate its own TSO cost; the amount remains a purely notional sum.

Tuanz, TelstraClear, Vodafone and others have long maintained that the TSO should be scrapped altogether, and even Telecom conceeds it should be refashioned to allow for cellular and satellite technologies.

Now, Vodafone is looking to actively prove its point that many of the “commercially non-viable” rural customers covered by the TSO are in fact commercially valid customer.