Why no unlimited broadband packages in New Zealand?

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#231148 5-Jul-2009 12:25

I used to run my primary MX and DNS on my home machine. Spam was never an appreciable amount of traffic, same for online gaming, Quake/Warcraft/etc.

The same argument appears in iPhone contract comparisons. The interesting thing, is that the individuals who complain have no idea how much actual data they are using. That typical usage? Somewhere around 80MB/month. So, that plan that provides 2-3GB/month? For all intents and purposes, that's "unlimited".

The same goes for broadband. Find out how much traffic you are currently using, ask yourself, "is my usage average?", and then make the comparison.

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Screeb

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#231177 5-Jul-2009 15:19

jpollock:
The same goes for broadband. Find out how much traffic you are currently using, ask yourself, "is my usage average?", and then make the comparison.

That argument doesn't hold water, because behaviour changes when you have unlimited bandwidth. It also ignores the fact that most first world countries don't have caps, so why not NZ (yes I know the reason)? Even in this thread, lchiu7 notes that he can't really watch TV online because of data caps. Not to mention Sky just recently cancelled their Sky Online service for this exact reason. Someone also mentioned seeding torrents. New Zealanders are somewhat notorious for being "leechers" because they don't seed due to the bandwidth cost. People don't want to blow hundreds of dollars a month busting their caps.

NonprayingMantis

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#231187 5-Jul-2009 16:19

Ragnor: 1: Poor economies of scale, due to NZ's small population ISP's aren't large enough to get better data transit pricing like huge ISP's overseas

2: Lack of competition probably around 90% of ADSL connections are via Telecom wholesale equipment, for most ISP's the only option to provide ADSL is via Telecom wholesale equipment. Only in Auckland and Wellington and recently have other ISP's been able to invest into installing gear in the exchanges. You can get Cable in Wellington and Christchurch but there's no competition to ADSL in Auckland other than wireless which is pretty much a joke.

3: The majority of the content on the internet that NZ'ers access is hosted in the US, the cost to provide 1GB of international data for an ISP is estimated to be around $0.50 per GB, most ISP's charge around $1-2 for extra GB's of data.

Things are improving slowly over time though:

More options for internet access (wireless, mobile broadband, future fibre network)
Better local caching of data, ISP's have started to realise the benefits in investing in caching data
Better caching technology for p2p
Regulation of the industry has improved in recent years (local loop unbundling, sub loop unbundling etc)
Proposed 2nd submarine cable to Australia

all of the above plus this one...

Consider that NZ has roughly the same land area as the UK, but apprx 1/10th the population. the more people you squeez into an area, the cheaper it is to provide each of them with BB, because you can spread fixed costs over more customers.
ISPs in the UK will have, on average, many more customers per square km than ISPs in NZ, meaning they have much lower costs per customer, and therefore can charge much lower fees.

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#231189 5-Jul-2009 16:25

NonprayingMantis:
all of the above plus this one...

Consider that NZ has roughly the same land area as the UK, but apprx 1/10th the population. the more people you squeez into an area, the cheaper it is to provide each of them with BB, because you can spread fixed costs over more customers.
ISPs in the UK will have, on average, many more customers per square km than ISPs in NZ, meaning they have much lower costs per customer, and therefore can charge much lower fees.

Look, if people are going to start bringing facts and common sense in here, we're in serious danger of defusing some of the far more interesting but less accurate hyperbole.

And that... Will just not do!

Cheers - N

:-)

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

jpollock

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#231213 5-Jul-2009 17:42

Screeb:
jpollock:
The same goes for broadband. Find out how much traffic you are currently using, ask yourself, "is my usage average?", and then make the comparison.

That argument doesn't hold water, because behaviour changes when you have unlimited bandwidth. It also ignores the fact that most first world countries don't have caps, so why not NZ (yes I know the reason)? Even in this thread, lchiu7 notes that he can't really watch TV online because of data caps. Not to mention Sky just recently cancelled their Sky Online service for this exact reason. Someone also mentioned seeding torrents. New Zealanders are somewhat notorious for being "leechers" because they don't seed due to the bandwidth cost. People don't want to blow hundreds of dollars a month busting their caps.

Actually, you can. It is cheaper to:

1) Set up an Amazon EC2 account.
2) Run a Squid Proxy on an EC2 instance
3) Pay 10c/hr and 15c/GB (US$) for proxy access.
4) Pay NZ traffic charges at NZ$1.50/GB
5) Watch Hulu SD.

Than it is to pay for Sky TV/TCL Cable if you watch less than 3hrs/day of TV. I've done it, watched the traffic and done the math. I've cancelled my TCL TV subscription, and the WAF is high because it's all Video on Demand.

You can make the deal even better by purchasing an PPTP VPN account with UK/US PoPs for US$40/yr.

As for seeding, do the math.

350MB for 40min episode * 2 for seeding = 700MB.
therefore, you can get:

40GB/0.7GB = 57 shows = 37hours of TV.

That's a lot of TV when you're looking at only the shows you want to watch. 80GB is an even larger amount.

Let's look at Hulu:

Hulu - ~1Mbps *3600s * / 8 * (4/6) = 300MB for a 40min episode

Since there is only traffic in one direction, Hulu and those sites are all cheaper than torrents. Heck, Hulu HD is only slightly more expensive than the basic torrent at 3Mbps. Just to pre-empt the discussion, you can easily get the 1Mbps connection needed during prime time. 3Mbps is also easily possible, just not using Amazon EC2 which caps traffic at 1Mbps per connection. At least on TCL cable in Wellington... :)

Just as it was back when torrents of movies first appeared, it is _cheaper_ to be legal than it is to violate copyright. Back then, traffic was NZ$60-120 to torrent, NZ$40 retail.

Still, we're drifting from the main discussion.

My argument is that NZ ISPs with data caps and charging are more honest than UK ISPs which use low bandwidth users to subsidise others. Unlimited data leads to traffic shaping as ISPs look to manage their traffic, with the resulting nastiness. Too see what happens, look at Canada's Internet market.

If you look into the history of the NZ market, TCL had to provide refunds to their 10Mbps customers for several months because they couldn't provide a reasonable speed. I haven't heard of that happening in uncapped networks.

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Screeb

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#231218 5-Jul-2009 18:12

NonprayingMantis:
all of the above plus this one...

Consider that NZ has roughly the same land area as the UK, but apprx 1/10th the population. the more people you squeez into an area, the cheaper it is to provide each of them with BB, because you can spread fixed costs over more customers.
ISPs in the UK will have, on average, many more customers per square km than ISPs in NZ, meaning they have much lower costs per customer, and therefore can charge much lower fees.

Like you say, it's FIXED costs. Cost per GB is not influenced by fixed costs. Also see this re density and broadband.

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Screeb

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#231223 5-Jul-2009 18:20

jpollock:
Actually, you can. It is cheaper to:

1) Set up an Amazon EC2 account.
2) Run a Squid Proxy on an EC2 instance
3) Pay 10c/hr and 15c/GB (US$) for proxy access.
4) Pay NZ traffic charges at NZ$1.50/GB
5) Watch Hulu SD.

Than it is to pay for Sky TV/TCL Cable if you watch less than 3hrs/day of TV. I've done it, watched the traffic and done the math. I've cancelled my TCL TV subscription, and the WAF is high because it's all Video on Demand.

You can make the deal even better by purchasing an PPTP VPN account with UK/US PoPs for US$40/yr.

Firstly, that's illegal (watching Hulu in NZ), congratulations. Secondly, it ignores the fact that NZ doesn't have its own such services (see Sky online going down) due to data caps.

As for seeding, do the math.

350MB for 40min episode * 2 for seeding = 700MB.
therefore, you can get:

40GB/0.7GB = 57 shows = 37hours of TV.

That's a lot of TV when you're looking at only the shows you want to watch. 80GB is an even larger amount.

Let's look at Hulu:

Hulu - ~1Mbps *3600s * / 8 * (4/6) = 300MB for a 40min episode

Since there is only traffic in one direction, Hulu and those sites are all cheaper than torrents. Heck, Hulu HD is only slightly more expensive than the basic torrent at 3Mbps. Just to pre-empt the discussion, you can easily get the 1Mbps connection needed during prime time. 3Mbps is also easily possible, just not using Amazon EC2 which caps traffic at 1Mbps per connection. At least on TCL cable in Wellington... :)

Just as it was back when torrents of movies first appeared, it is _cheaper_ to be legal than it is to violate copyright. Back then, traffic was NZ$60-120 to torrent, NZ$40 retail.

This assumes all you do is download TV episodes. I.e. It doesn't take into account usage from other net activities, not to mention HD movies for example, which come in at a few gigs a pop. It also assumes one person per household.

Still, we're drifting from the main discussion.

My argument is that NZ ISPs with data caps and charging are more honest than UK ISPs which use low bandwidth users to subsidise others. Unlimited data leads to traffic shaping as ISPs look to manage their traffic, with the resulting nastiness. Too see what happens, look at Canada's Internet market.

You're implying here that NZ internet is better than the rest of the world for this reason. Verizon FiOS has no shaping and is very fast and reliable.

If you look into the history of the NZ market, TCL had to provide refunds to their 10Mbps customers for several months because they couldn't provide a reasonable speed. I haven't heard of that happening in uncapped networks.

And you can buy capped or business plans overseas for this reason. I'd rather have the choice. Not everyone needs guaranteed speeds.

NonprayingMantis

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#231285 5-Jul-2009 19:54

Screeb:
NonprayingMantis:
all of the above plus this one...

Consider that NZ has roughly the same land area as the UK, but apprx 1/10th the population. the more people you squeez into an area, the cheaper it is to provide each of them with BB, because you can spread fixed costs over more customers.
ISPs in the UK will have, on average, many more customers per square km than ISPs in NZ, meaning they have much lower costs per customer, and therefore can charge much lower fees.

Like you say, it's FIXED costs. Cost per GB is not influenced by fixed costs.

true, but my point was more a general point why NZ is more expensive, not sepcifically referring to data costs.

Also see this re density and broadband.

My point was that with higher population density, in urban areas in particular*, that BB can be provided at a lower cost cetirus paribus.

I was not claiming population density was correlated with BB penetration. I was claiming it effects the cost of providing broadband, which is something entriely different. So your chart is not refuting any claim I have made.

There could be a myriad of reasons why pentration is not correlated with population density
e.g. government regualtion, urban/rural split of population (which may or may not be correlated with overall population density), income distribution, size of average household, age of population, etc etc.

*Australia for example has the smallest population density on that chart, but since most of it's poplation is crammed into the main living areas and almosty noone lives in the middle of the outback, it can provide decent BB to most of the population. It's urban density is probably closer to the average,

Screeb

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#231323 5-Jul-2009 20:58

NonprayingMantis:
My point was that with higher population density, in urban areas in particular*, that BB can be provided at a lower cost cetirus paribus.

I was not claiming population density was correlated with BB penetration. I was claiming it effects the cost of providing broadband, which is something entriely different. So your chart is not refuting any claim I have made.

There could be a myriad of reasons why pentration is not correlated with population density
e.g. government regualtion, urban/rural split of population (which may or may not be correlated with overall population density), income distribution, size of average household, age of population, etc etc.

*Australia for example has the smallest population density on that chart, but since most of it's poplation is crammed into the main living areas and almosty noone lives in the middle of the outback, it can provide decent BB to most of the population. It's urban density is probably closer to the average,

Actually, Australia's urban density is 3rd highest in the OECD:

[T]hough Australia is the least densely populated country in the OECD, 93 percent of its citizens live in urban areas (the 3rd highest percentage in the OECD).

Therefore, a more appropriate gauge of population density – “urbanicity” – takes into account both the percentage living in urban areas and the average density of those areas. Among OECD nations, there is virtually no correlation between a country’s “urbanicity” and its level of broadband penetration (0.07). In other words, OECD countries with more densely urban populations do not necessarily have higher levels of broadband take-up. Population density is not a sufficient explanation for America’s lagging broadband penetration.

(From http://www.itif.org/files/BroadbandRankings.pdf)

And as you know, Australia certainly doesn't have the 3rd best broadband in the OECD.

NonprayingMantis

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#231375 5-Jul-2009 23:20

Screeb:
NonprayingMantis:
My point was that with higher population density, in urban areas in particular*, that BB can be provided at a lower cost cetirus paribus.

I was not claiming population density was correlated with BB penetration. I was claiming it effects the cost of providing broadband, which is something entriely different. So your chart is not refuting any claim I have made.

There could be a myriad of reasons why pentration is not correlated with population density
e.g. government regualtion, urban/rural split of population (which may or may not be correlated with overall population density), income distribution, size of average household, age of population, etc etc.

*Australia for example has the smallest population density on that chart, but since most of it's poplation is crammed into the main living areas and almosty noone lives in the middle of the outback, it can provide decent BB to most of the population. It's urban density is probably closer to the average,

Actually, Australia's urban density is 3rd highest in the OECD:

[T]hough Australia is the least densely populated country in the OECD, 93 percent of its citizens live in urban areas (the 3rd highest percentage in the OECD).

Therefore, a more appropriate gauge of population density – “urbanicity” – takes into account both the percentage living in urban areas and the average density of those areas. Among OECD nations, there is virtually no correlation between a country’s “urbanicity” and its level of broadband penetration (0.07). In other words, OECD countries with more densely urban populations do not necessarily have higher levels of broadband take-up. Population density is not a sufficient explanation for America’s lagging broadband penetration.

(From http://www.itif.org/files/BroadbandRankings.pdf)

that's good. you provide a chart showing BB penetration compared with pop density, then aknowledge that it is useless for the reaosns I cite. Why even provide it in the first place?

And as you know, Australia certainly doesn't have the 3rd best broadband in the OECD.

ummm, again, so what? I was not arguing about broadband quality either (and the link provided talks about penetration, not 'best', which is entirely different depending on how you define 'best').

My point, for the third time now, is simply the fixed cost of providing broadband to a particular geographical area, which is a significant portion of the total cost, is less per person when you can spread it over more people. i.e. if the people in auckland are well dispersed, which they are, then it is more expensive for ISPs (or rather network providers) to provide that BB.

Please do not post anymore stats about BB penetration because they are just a strawman that is irrelevant to my point. Besides which these stats, at best, can only show correlation, not causation.

As i said before, there could be a myriad of reasons why pentration is not correlated with population density
e.g. government regualtion, urban/rural split of population (which may or may not be correlated with overall population density), income distribution, size of average household, age of population, etc etc.

Screeb

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Ultimate Geek
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#231406 6-Jul-2009 01:53

NonprayingMantis:
that's good. you provide a chart showing BB penetration compared with pop density, then aknowledge that it is useless for the reaosns I cite. Why even provide it in the first place?

ummm, again, so what? I was not arguing about broadband quality either (and the link provided talks about penetration, not 'best', which is entirely different depending on how you define 'best').

My point, for the third time now, is simply the fixed cost of providing broadband to a particular geographical area, which is a significant portion of the total cost, is less per person when you can spread it over more people. i.e. if the people in auckland are well dispersed, which they are, then it is more expensive for ISPs (or rather network providers) to provide that BB.

Please do not post anymore stats about BB penetration because they are just a strawman that is irrelevant to my point. Besides which these stats, at best, can only show correlation, not causation.

As i said before, there could be a myriad of reasons why pentration is not correlated with population density
e.g. government regualtion, urban/rural split of population (which may or may not be correlated with overall population density), income distribution, size of average household, age of population, etc etc.

The point is that while density is not linked with penetration, penetration is linked with price (per mbit). Subsequently, density is not linked with price.

Also, you said:

*Australia for example has the smallest population density on that chart, but since most of it's poplation is crammed into the main living areas and almosty noone lives in the middle of the outback, it can provide decent BB to most of the population. It's urban density is probably closer to the average,

Which the second link disproves. (ie its urbanicity has no bearing on its ability to provide "decent BB to most of the population"). Also "It's urban density is probably closer to the average" was shown to be wrong in that it's 3rd highest, not close to average.

Remember that this discussion is "Why no unlimited broadband packages in New Zealand?" to which you added the reason "population density".

Oh, and "Besides which these stats, at best, can only show correlation, not causation.". The point is they show NO correlation, therefore causation need not be established, because we can simply rule out population density as a factor for penetration.

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#231424 6-Jul-2009 08:14

Screeb:

Firstly, that's illegal (watching Hulu in NZ), congratulations. Secondly, it ignores the fact that NZ doesn't have its own such services (see Sky online going down) due to data caps.

If you're going to claim it is illegal, you're going to have to point out the New Zealand law that says so.

My reading of the NZ Copyright law is that it is 100% legal, albeit untested in court:

http://www.legislation.govt.nz/act/public/2008/0027/22.0/viewpdf.aspx
page 48:

    for the avoidance of doubt, does not include a process,
    treatment, mechanism, device, or system to the extent
    that, in the normal course of operation, it only controls
    any access to a work for noninfringing
    purposes (for example, it does not include a process, treatment,
    mechanism, device, or system to the extent that it controls
    geographic market segmentation by preventing the
    playback in New Zealand of a noninfringing
    copy of a work)

New Zealand Copyright law has an EXPLICIT exemption that allows New Zealand residents to do anything that they want to get around region locks. Hulu is legally offering their content to US IP Addresses, and I have a US IP Address. it's no more illegal than a Region Free DVD player - which is 100% legal in New Zealand.

This assumes all you do is download TV episodes. I.e. It doesn't take into account usage from other net activities, not to mention HD movies for example, which come in at a few gigs a pop. It also assumes one person per household.

Sure it does, it points out that the cost of bandwidth is easily offset by a reduction in TV costs. It doesn't matter if you're buying extra traffic to watch the shows, it's cheaper than buying Sky/Cable (with the 3hrs/day caveat). This even covers HD movies available on Hulu or the other US sites, for example NetFlix. HD movies are cheaper to watch legally than torrent!

Remember - Region Coding can be legally circumvented in New Zealand.

You're implying here that NZ internet is better than the rest of the world for this reason. Verizon FiOS has no shaping and is very fast and reliable.

I imply nothing. I merely disagree with your pov that it is wrong and bad for the customer. I'm a customer, and I much prefer having a cap to not having one, it allows larger market penetration.

As for Verizon, they're in the US, without a need to pay traffic termination charges to the large backbone providers (being one of them). They are also pretty expensive at US$45/month for a basic plan. That's more than double NZ's cheapest plan at NZ$30.

If you don't want guaranteed speeds, then TNZ's new broadband plan is the perfect one for you. Uncapped with throttling during peak hours.

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Screeb

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Ultimate Geek
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#231664 6-Jul-2009 14:41

jpollock:
If you're going to claim it is illegal, you're going to have to point out the New Zealand law that says so.

My reading of the NZ Copyright law is that it is 100% legal, albeit untested in court:

http://www.legislation.govt.nz/act/public/2008/0027/22.0/viewpdf.aspx
page 48:

    for the avoidance of doubt, does not include a process,
    treatment, mechanism, device, or system to the extent
    that, in the normal course of operation, it only controls
    any access to a work for noninfringing
    purposes (for example, it does not include a process, treatment,
    mechanism, device, or system to the extent that it controls
    geographic market segmentation by preventing the
    playback in New Zealand of a noninfringing
    copy of a work)

New Zealand Copyright law has an EXPLICIT exemption that allows New Zealand residents to do anything that they want to get around region locks. Hulu is legally offering their content to US IP Addresses, and I have a US IP Address. it's no more illegal than a Region Free DVD player - which is 100% legal in New Zealand.

Well like you say it's untested. It would be very interesting if this is covered by that clause as AFAIK the point of the clause is so that we can play imported DVDs. Also it still may be against US law, as you are exporting copyrighted material without a license.

Sure it does, it points out that the cost of bandwidth is easily offset by a reduction in TV costs. It doesn't matter if you're buying extra traffic to watch the shows, it's cheaper than buying Sky/Cable (with the 3hrs/day caveat). This even covers HD movies available on Hulu or the other US sites, for example NetFlix. HD movies are cheaper to watch legally than torrent!

Remember - Region Coding can be legally circumvented in New Zealand.

Watching TV on the internet isn't really a replacement for normal TV. Consider SKY Sports and such, that involve NZ content that is not available online. It's also good for rewatching shows or catching up on shows you missed. In those cases you would still have SKY or whatever.

You're also ignoring my point about SKY Online closing down explicitly due to the cap issue, and the general lack of such services in NZ. Lack of uncapped plans is doing this. This is not a good thing. Driving services overseas is not good for the NZ economy as well.

I imply nothing. I merely disagree with your pov that it is wrong and bad for the customer. I'm a customer, and I much prefer having a cap to not having one, it allows larger market penetration.

What on earth is that supposed to mean? How does having a cap allow larger market penetration? You ARE implying that NZ internet is better than the rest of the world dollar for dollar ("I much prefer having a cap to not having one"). And do you prefer paying more per GB than other countries?

As for Verizon, they're in the US, without a need to pay traffic termination charges to the large backbone providers (being one of them). They are also pretty expensive at US$45/month for a basic plan. That's more than double NZ's cheapest plan at NZ$30.

You're seriously comparing uncapped, unthrottled 15/5 fibre with "NZ's cheapest plan"? I assume you're talking about Telecom's Basic plan, which is limited to 128k up and has a whopping 500MB of data. Wow, talk about grasping at straws... You've also mentioned TCL cable and 40GB so assuming you're on that plan (which, incidentally, is what I'm on), you're paying $110 for 40GB of 10/2, versus Verizon's unlimited, unthrottled 15/5 for ~$71.68. If you seriously think you're getting a better deal, then I've got a bridge to sell you.

If you don't want guaranteed speeds, then TNZ's new broadband plan is the perfect one for you. Uncapped with throttling during peak hours.

Sure, Big Time does look enticing, but I'll wait and see how performance is. And you seem to be against the very idea of such a plan existing. Even then, Big Time is far worse value than overseas plans in terms of quality (again, see Verizon FiOS).

jpollock

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#231680 6-Jul-2009 15:29

All through this, I've been responding to other people's points.

Spam was brought up, I pointed out that spam was never a substantial part of the traffic on my systems.

Verizon was brought up as the be-all-end-all of Internet access. I pointed out that it was expensive when compared to the NZ market.

You pointed out that watching Hulu is illegal. I pointed out the exact paragraph in the Copyright Ammendment Act which indicates that region coding is not a protected TPM and can be worked around legally. You then try and waffle about US law, but still neglect to point to the specific clause you feel is being violated.

Finally, we talk about TV vs Bandwidth charges. My point has been that it is cheaper to watch TV on the Internet than it is to pay for Sky, or even torrent it (which is definitely a copyright violation in NZ). Since I supported my argument with _math_ (dirty facts!), you then changed the subject to not having access to Sky Sports. Personally, I don't watch Sky Sports, they don't carry the sports I like. I'll go somewhere else (like NHL.com, or MLB.com) and watch the sports I actually care about, for about the same price as the Sky Sports package.

Now, the value judgement may be different for someone else. It may be worth the NZ$50-70/month for the ability to watch the sport, particularly if you care about rugby.

As for Sky Online, they probably found it was competing with MySkyHDi, so why offer it? Also, they are stuck because the customer is paying for _both_ the sky subscription _and_ the traffic. That math doesn't work at all. It might work if the Telcos implemented free local peering, but they don't. TVNZ and TV3 seem to be doing pretty well with their online offerings.

So, let's recap:

Legal (or less illegal if we take your pov) is cheaper than torrents
Legal is cheaper than paying for Sky
If you're not using video, you've got enough traffic in a basic plan.

Bandwidth is cheap enough to support all of this today, the only problem is that people haven't quite figured out that the Internet _replaces_ subscription TV instead of complementing it.

Can ISPs do better? Definitely. Would it be better in an uncapped world? I doubt it. What would make it better?

1) minimum speed guarantees (local, national and international)
2) local peering
3) cheaper national traffic
4) even cheaper local traffic (free?)
5) more than one physical network provider

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#231682 6-Jul-2009 15:40

jpollock:

As for Sky Online, they probably found it was competing with MySkyHDi, so why offer it? Also, they are stuck because the customer is paying for _both_ the sky subscription _and_ the traffic. That math doesn't work at all.

I'd say Sky-online failed because of the dearth of any decent content. Other than Sports and movies, there was FOOD TV and wrestling from the BOX channel. No Nat Geo, History,, etc , none of the reasonably decent programs from BOX channel, no kids program channels ( disney, etc ). A wasted effort on part of Sky. Too little, too soon, way too late ,,

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