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sbiddle: I still find it ironic that so many "experts" (aka politicians) believe that cheap broadband is essential for a knowledge based economy. How exactly?
There's a simple answer to that:
The cost of broadband is like a tax on the whole of NZ's economy. The more we have to pay for broadband, the less is available to be spent on other goods and services. All businesses need broadband in the 21st century in order to complete basic tasks like Internet Banking, E-mail and updating their web site at an acceptable speed, not to mention finding other resources on the web by using Google etc. To expect businesses to function efficiently using dialup is not realistic in the year 2006.
Can we agree on this basic premise then: Businesses need broadband in order to function efficiently.
I'm not saying that unlimited ("all you can eat") data traffic is typically needed for business. In that sphere I would have to agree with others who have posted in this thread that this is mostly the domain of File Sharers and Bit Torrent enthusiasts.
However, I also strongly believe that MANY businesses need broadband with a faster upload speed than 128kbps. Otherwise it takes far too long to send large e-mail attachments, upload via FTP etc.
At the risk of getting off-topic, I would like to take our 3-person IT business as an example of broadband requirements:
For over 6 years we clung doggedly to a Full-Speed Jetstream plan until the very last moment when Telecom withdrew it in May this year. Even though we were paying about $90 per month for a 600MB data cap, to us, the need for a decent upload speed meant we didn't have any choice. The only alternative was a UBS plan with just 128kbps upload speed.
For at least a year or two, many players in the NZ broadband scene were calling for Telecom to offer a faster upload speed than 128kbps on their UBS plans. Yet they were ignored until Telecom mysteriously had a change of heart in May this year and started offering 512kbps upload. There are no prizes for remembering what else happened in May that might have had something to do with this change of heart...
So at that point, we could get a broadband plan with 3.5Mbps down / 512kbps up and a 10GB data cap for $80 per month.
$80 is still quite a lot of money for that service don't you think?
The 10GB data cap was far more than we needed (typically we only use 1 or 2 GB per month) but this was the cheapest plan that offered a half-decent upload speed. Still not the 800kbps or so that we had been getting for the past 6 years on the old "Full Speed" Jetstream plan, but way better than 128kbps nonetheless.
Fast forward to October and the great "unleashed" debacle. The heat was really on Telecom by this stage and they finally agreed to throw open the taps and let our DSL connections run at Maximum Line Speed (just like we had in 1999 when Jetstream was launched).
Another new plan was launched which provided Max/Max line speeds with just a 2GB data cap for $50 per month. This plan is pretty much tailor made for our business, so I have no complaints on that score, but we are still paying $50 per month for 2GB of data traffic, albeit at much faster speeds.
$50 per month for broadband plus line rentals for 3 phone lines @ $40 per month per line adds up to $170 per month.
Added to that are all the toll charges as well as the various "Smart Phone Services" that we need for things to work efficiently. By the time GST goes on top we are paying between $250 and $300 per month for 3 phone lines and broadband.
$250 to $300 per month for 3 phone lines and broadband is still quite a lot of money don't you think?
This is my response to the topic of this thread: "Does Mr Cunliffe really know what kiwis want?" and then to Jama's initial statement:
Jama: I guess when Mr Cunliffe says 'kiwis' he could be referring to two people.
The $250 to $300 per month we are paying for Telecommunications Services is just another tax on our business. How many business owners are there who wouldn't jump at the chance to pay less while still maintaining the services they need?
By legislating Unbundling of the Local Loop (ULL), Mr Cunliffe is poised to deliver such a saving to NZ businesses as I will endeavour to explain below. That is most definitely "what Kiwis want!" and it's a lot more than 2 people we are talking about here.
The question now becomes:
What is a fair price to pay for Telecommunications Services?
At this point we open a whole can of worms but it doesn't seem unreasonable to compare the prices we pay in NZ to other countries of a similar size, albeit with some reasonable extra loading due to the cost of international connectivity via the Southern Cross Cable etc.
Whichever way you look at it, we are paying dearly in NZ for Telecommunication Services compared to many other first-world countries. Without ULL, we would be stuck forever with the need to rent voice lines in order to get broadband when it should be possible to only order the services you actually need via Naked DSL. In our case, I can see the day coming when we have no voice lines at all, but instead use some sort of Virtual PABX and VoIP to achieve the same thing at much lower cost than is possible under the present regime.
As with many things, the proof of the pudding will be in the eating. What I have outlined here are the benefits to our business if ULL goes according to plan.
Some would say that Mr Cunliffe has made the wrong decision and that we should have just stuck our heads in the sand and stayed with the status quo (no ULL). To most thinking people however, this is not an option because "if you keep doing what you've always done, you keep getting what you've always got". The Profit Margin on 85% of our monthly Telecommunications expenditure is currently going to offshore owners of Telecom who repatriate most of it overseas via fat dividend payments.
How exactly does that "keep our country working?"
Now I'll sit back in my chair and wait for the flaming to start...
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