[TelstraClear] The Ugly Side of LLU...

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Jama

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#6589 7-Feb-2006 16:31

Interesting that we only get to see one side of the LLU argument here. What you don't see (unless you read the overseas media) is all the ugly incumbent behaviour when it comes to charging for use of the copper. See, you can ULL but the incumbent is going to get the money back off you some how.

Take Australia for example which is held up as the shining light of LLU. Media are today reporting that Telstra last Friday increased the charge to rent the copper between a home and a telephone exchange for wholesale customers.

Optus, Primus and iiNet are currently paying $22 p/line p/month in cities. Telstra have now increased this to $30 p/line p/month.

Now interestingly enough iiNet own ihug and ihug have been very vocal about the need for LLU in NZ.

You have to wonder how do you make a buck when Telstra charge you $30 for each copper line and thousands to co-locate DSLAMS in their exchanges? Remembering this is before you whack on your own margin.

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#27968 7-Feb-2006 17:27

It was my understanding that LLU was based on the principle that the little guys could offer services using the copper lines, but without depending on a wholesale arrangement with 'the incumbent'.

Am I missing something here?

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#27970 7-Feb-2006 17:45

I retract my post.

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#27976 7-Feb-2006 22:44

I moderated my post after the whole story was told and I cannot add any good idea from my side, because I am not familiar with the whole issue.

I wish sometime in the future Telecom will increase the upload speed to 256K and then I will be happy! :)
Or NZ should have a competitor in the broadband business with fair offers and minimum the same quality of service.

All I need a healthy competition.

I is a kollege stoodent. Bee nice.

freitasm

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#27978 7-Feb-2006 22:54

Check your private messages.

riahon

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#27982 8-Feb-2006 07:45

Something I else I didnt realise (or maybe I am getting this wrong) but if unbundling was to eventuate, would it be true that the competitors would have to install their own equipment in the exchanges (or make their own?) to access the copper. If this is the case then the cost of doing so would be hindered due to impending new technology around the corner.

If true then this is not making sense. What would LLU allow Telco's access to in NZ? Is it just the copper or the whole shooting box.

And also LLU would that also mean the new Telco's would have to abide by the Kiwi share? With the perceived low Broadband uptake surely that would mean they would be inheriting the cost of those dial customers making free local calls as well.

More to this than meets the eye.

Jama

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#27983 8-Feb-2006 07:58

There are 3 types of charges passed on from the incumbent:
- The one off cost for line connections
- Charges for access to the telecommunications facilities eg monthly line rental
- Collocation costs (hosting your kit in the incumbents exchange) - space rental, power usage, security, etc

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#27985 8-Feb-2006 08:07

I am not against the LLU, but if this is simply a move to impose co-location and copper sharing on the incumbent, then really it's going to be a problem.

The incumbent will probably have the rights to charge the entrant a share of costs on exchanges - power, maintenance, space. This will not be cheap. There are places with no space, where some construction will be in order. This does not come free.

Of course the entrant will have to add this to the price of any services provided. Assuming they only slap a couple of DSLAMS on an exchange and offer DSL and don't even enter the POTS because they would probably have to provide their part on kiwi share, etc.

If this is the case I can imagine entrants battling for DSL services only. And really, what's innovative about this?

Give us optic fiber to the house (FIOS), last mile wireless, and other really creative services that don't rely on copper and exchange, instead of fighting for the unbundling, and tossing all out of the window in two years...

[Note: posted this before seeing Jama's previous post, so it complements it]

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riahon

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#27986 8-Feb-2006 08:08

Jama: There are 3 types of charges passed on from the incumbent:
- The one off cost for line connections
- Charges for access to the telecommunications facilities eg monthly line rental
- Collocation costs (hosting your kit in the incumbents exchange) - space rental, power usage, security, etc

Its that 'kit' part that I want to know about. Is that kit like a box I carry in and plug away and bingo - access or are we talking about a several forklifts worth. In either case having a kit would cost money to have and to maintain - can this cost be justified with new technology not too far away, or will LLU also allow them access to NGN (no idea what this is but it sounds like where we are heading, I dont even know if it uses existing copper so excuse my ignorance if this make no sense)

Jama

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#27987 8-Feb-2006 08:16

Yeah a big box - Switch > Splitter > DSLAM > PSTN Network

NGN is more about changes to the core network.

When LLU was a big thing in the 90's we didn't have all this wireless technology 'around the corner'.

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#28005 8-Feb-2006 13:51

Jama: Interesting that we only get to see one side of the LLU argument here. What you don't see (unless you read the overseas media) is all the ugly incumbent behaviour when it comes to charging for use of the copper. See, you can ULL but the incumbent is going to get the money back off you some how.

Take Australia for example which is held up as the shining light of LLU. Media are today reporting that Telstra last Friday increased the charge to rent the copper between a home and a telephone exchange for wholesale customers.

Optus, Primus and iiNet are currently paying $22 p/line p/month in cities. Telstra have now increased this to $30 p/line p/month.

This increase by Telstra is their attempt to bypass the ACCC decision due in approximately 6 weeks. Currently in cities Telstra charge $22 per line and in rural areas somewhere around $100. The ACCC have recommended the price in cities drop from between $7 in a CBD, $13 in a suburb and $144 in rural areas as according to Telstras own documents this is still giving them a generous margin.

Telstra on the other hand are determined to charge a flat rate for access which has already been frowned upon by the ACCC. Because unlike the commerce commission here the ACCC does use their power I would say Telstra's chances of that $30 price sticking are somewhere between non existant and completely non existant.

I honestly don't believe LLU is going to solve NZ's problems because we only have probably 2 or 3 ISP's who can afford to roll out gear nationwide and at the end of they day they'll all simply be reselling those services to lower tier providers. However the fact that the NG network is essentially going to give everbody an ethernet socket on their wall would make some form of true wholesale service very exciting - essentially any ISP could roll out a phone service by building a soft and also offer high speed internet.

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#28026 8-Feb-2006 21:31

Correct me if I'm wrong, but if LLU was implemented, doesn't it also mean that companies such as TelstraClear, who already have a National Backhaul Network, could then offer Cable Internet services for the last mile & also wireless where appropriate? I was under the impression that they weren't purely limited to ADSL, which seems to be what some people are implying.

Obviously ADSL is the most affordable, but surely TelstraClear would offer more choice than "just" ADSL & any varients thereof. They have also recently announced a $20Million upgrade of their cable network to certain parts of the Southisland, see HERE for further details, which will also eventually tie into the Multi-Gigabit Advanced Research Network.

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#28027 8-Feb-2006 21:50

Grantis: ... doesn't it also mean that companies such as TelstraClear, who already have a National Backhaul Network, could then offer Cable Internet services for the last mile & also wireless where appropriate? I was under the impression that they weren't purely limited to ADSL, which seems to be what some people are implying.

That would be great, and welcome. I for one am a TelstraClear customer, since Saturn actually - but their customer service is horrible - saying technicians would come around but then on a subsequent call finding out nothing was scheduled, people with no technical knowledge, etc.

The whole thing is not only the technical side, but also the service on its entirity.

Having said that, we are still looking for a new house, and one of the requirements is being on a street serviced by TelstraClear cable.

Grantis

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#28028 8-Feb-2006 21:50

freitasm:
Give us optic fiber to the house (FIOS)

I would have to agree, having that technology available in New Zealand would be amazing! I would most certainly be happy to pay for it as well, albeit, I can't see it being available in New Zealand to Residential Customers inside of 15-20 years, if at all.

Jama

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#28047 9-Feb-2006 07:37

TCL don't need LLU to offer more services. They could offer last mile wireless now or extend their cable network. Yes LLU seems to always be pointed at ADSL.

I agree with fibre to the house. But who is going to invest the money if the return is $20 p/month? I would be more than happy to see some of my tax dollars go to rolling out fibre. The Korean government spent the money to do this so I don't see why the NZ government don't do the same. If you trimmed 5% from the $35b public service spend you could certainly have a good crack at it.

It is quite possible though that it will become redundant with 802.16 and 802.20 technologies. It is certainly cheaper to roll out wireless than to dig up roads to lay fibre.

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#28084 9-Feb-2006 16:20

Grantis:
freitasm:
Give us optic fiber to the house (FIOS)

I would have to agree, having that technology available in New Zealand would be amazing! I would most certainly be happy to pay for it as well, albeit, I can't see it being available in New Zealand to Residential Customers inside of 15-20 years, if at all.

While I'm no fan of Telecom there is no disputing they have done a pretty good job running a network in NZ dating back to the NZPO days, the NEAX gear we had was state of the art when it was deployed and there were not many places in the world in the late 80's that had a network as advanced as we did. Not long after Telecom was floated Telecom wanted ISDN available to every household in the country by the mid 90's, since Telecom had a good working relationship with BT (not many other countries have adopted the BT wiring standards and plugs!) they believed the future lay with ISDN. Unfortunately the greed of the Americans took over and the ISDN got laid to rest along with Telecom's plans to roll out a GSM network (they had ETACS spectrum but had to hand it back after the commerce comm at the time ruled they couldn't own both AMPS bands + 1 ETACS band)

The NG network is going to be amazing, the real test is just going to be how that fits in with a sector that does need some form of regulation to stop the profit gauging.

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