Broadband - What the government should have done!

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#35117 6-May-2006 22:50

proLLU: Though I believe privatisation is good,

Agreed. At the time it was a very good move for NZ. We needed money back in the government coffers to pay down debt and Telecom was not being well run.

proLLU: I do not believe selling the local loop as part of the Telecom sale was a good idea

Agreed. This is a mistake that may countries around the world have made.

proLLU: - especially so if it is sold to an non-NZ entity.

Not really relivant. The company was sold on the basics that ~50% of it was then put on the open market. It has sense been bought back by New Zealanders in the most part.

proLLU: I believe Government intervention in a country is good.

Agreed. However it must be the right intervention. Vote me in to government at the next election [1] and I can assure you that I would be rail roading a campaign to give the ULL back to Telecom to do with as they please.

proLLU: If you were to look at Singapore

We're not in Singapore. Our cultures are so far apart that your presentation isn't worth considering IMHO :)

proLLU: I don't see why Government intervention and regulation will stop investment,

Government intervention in this case will stop investment and not just in telecommunications. This action is sending a global message about our governance in New Zealand.

In the telecommuications sector right now I would be telling any prospective investor to hold on to their cash or put it somewhere else as it's quite clear that our government is moving the goal posts around at present and no one's quite sure how anyone is going to react. This lack of stability, that we did have, sent shock wave thru our market late last week and it will continue to have ripple effects for some time. It was a fundmentally bad move.

proLLU: It is highly unlikely an outsider (i.e. foreign companies) would help improve NZ, and think of the public before their own profit. The only reason they would put money (invest) in the country is so they can get MORE out of the country, i.e. a net gain on their part and hence a net loss for the residents. They are sucking money out of NZers,.

This is untrue. People make investment decisions in other countries for a whole range of reasons. I don't act based solely on todays profit. When I'm investing, I invest in the furture. I make choices based on outcomes I want to see today, next month and in 10 years.

A smart investor looks for a win/win/win out come.

Cheers Don

[1] - I have no political aspiration, so don't even waste your own time flaming me on that issue.

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nzbnw

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#35118 6-May-2006 22:54

Don, Can I just say you would have my vote.

DonGould

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#35119 6-May-2006 23:45

proLLU: Telecom was given chances after chances to improve their services, and provide reliable services for ALL NZers. That failed. Miserably I must add.

Actually that statement is completely untrue. The service to New Zealanders has improved and so has it's reliabilty. I am not going to back that claim up, but I will assure you I can.

What T failed to do was ensure it's competitors meet their targets that the government had laid down. Bailing up Telecom on this issue is unreasonable. The government should infact be bailing up these competitors. They have not delivered.

proLLU: Why are they investing in 3G, and NGN when there are still people in the rural areas in dire need of some form of connectivity? If Telecom were really the saint Theresa Gattungs claimed to be, they should have laid fibre to provide ADSL to more people in the rural areas.

Ok, now you're demonstrating a lack of technical understanding about what the NGN is.

NGN is the process of rolling out an IP based node network (as I understand it). The process of laying fibre and putting xDSL on the end of it is what NGN is all about. What you're basicly saying is 'They should be building a NGN rather than building NGN' - yes, the statement doesn't make sense.

3G is being rolled out because is has to be. Manufactures are focusing on the production of 3G equipment. In 3 years you won't be able to purchase 2G handset at competitive rates anymore. Telecom has no choice is it wants to stay in the mobile market. CDMA is dead.

proLLU: Once again, it is fair for the Government to unbundle the local loop because Telecom was given another chance in 2003 to prove their case that LLU is not for NZ. Now, it is chance the other ISPs are given THEIR chance to prove LLU is for NZ. I guess, LLU can be reversed should the other ISPs not prove their case too. :) But I am quite confident LLU will work, because it has, for many reasons.

I would like to hear these reasons you are so confident.

proLLU: Australia which also have a widely distributed population (low density) like NZ have shown us that LLU worked for them, and I see no reason why NZ should be different.

Incorrect. ULL has not worked for Australia at all. At $46 per pair, most ISPs showed no interest in investing in ULL. At present most ISPs still don't use ULL as it is simply not profitable in the domestic market.

proLLU: I have never looked at Telecom as an NZ-owned company, for one, because they aren't. I read somewhere that only 25% of the shareholders are NZer, with the remnant Australians or from other countries - i.e. Ameritech and Bell Atlantic.

Actually that's also not true. As I understand it the majority of Telecom is now and has been owned by New Zealanders and New Zealand investment firms for quite some time.

proLLU: Yes, it is a breach of private property, but because their private property affects the majority of the public, it had to be done.

This is also not true. Telecoms actions were not affecting the public majority. The majority of public are living in areas that currently has bb access yet they have not signed up for it as they don't see that it has value to them. It did not have to be done at all. It happened as a result of a small group of very powerful people becoming embarrised in a public forum.

proLLU: Their predatory pricing and actions also warranted the Government's intervention,

Another untrue statement. Telecoms pricing is not predatory at all. Telecom maintain high market pricing without under cutting its competitors. It is the main competitor in the two major duopoly markets. Wired - Telecom/Telstra Wireless - Telecom/Vodafone.

proLLU: I must also add that the "private property" of Telecom has also sucked dry many of NZers money. $42/month for line rental is just too much.

Following UBL in Australia the cost of a domestic phone line almost trippled. Part of the "rebalancing" was so that the true cost of service delivery was reflected and not cross subsidsing from toll revenue. Another aspect of 'rebalancing' was to ensure that there was room for a retail margian for providers reselling Telstra services.

Cheers Don

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DonGould

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#35121 7-May-2006 00:06

nzbnw: Yes i can confirm for you, I am a loyal employee, but to me this is much more than just about Telecom. I believe in free business, and I would back just about any company put in a similar position.

Yes I 100% agree. This is far more than just about Telecom. The issue is about the governments reactionary actions in the New Zealand market place. It sends a message to the world that I'm not happy with as New Zealander.

nzbnw: LLU is hardly a success story you make it out o be in Australia,

LLU was a resounding failure in Australia. Telstra then went on to deliver UBS which has been a success.

nzbnw: and I hold a great deal of respect for Telsta for standing up to the ACCC and the Australian Government.

Ok nzbnw, I must at this point thank you for your kind comments about me in other posts tonight...

...but I was rolling around the floor as I read that last comment...

One should remember that Telstra is 51% owned by the Australian government. Basicly when Telstra, the ACCC and the Australian Government go up against each other it really is just different members of the same family discussing what to do. It is a massive conflict of interest really. It's also regarded as a huge mess that's bigger than any problem we have here in NZ with Telecom.

Thou... on the other hand, I do respect my Dad when he stands up to my Mother... ;)

Cheers Don

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DonGould

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#35125 7-May-2006 00:45

bonkiebonks: I think all these arguments come down to greed on Telecom's part. Had they charged a little less, and provided a little more reliability on my broadband, I wouldn't cared much about LLU.

I don't agree with you.

It is TG's job to fight ULL for no other reason that private property rights. Something that the NZ government has a shocking track record at over the past two hundred years.

Reality check here again... New Zealanders simply don't see bb at any cost as a value proposition a head of other products and services. Vodafone will tell you that their average spend is over $50 per user per month. In my house that's $100 and we only spend $40 on bb (thou I do have two bb connections into my home so I guess I'm paying more than most need to).

The only reason the government care about ull is because a bunch of industry people are telling them that they need access to it to provide better bb access to Kiwis. Something that I might note that your average Kiwi just doesn't care about.

bonkiebonks: It's sad to think I had to choose the 56k version when I was watching a TV3 video on their website - and that is an NZ hosted site. :(

btw, I'm on 3.5M, so if I could actually get my full 3.5M, I'm quite happy to pay for it. To be quite frank, it isn't too expensive.

Has it occured to you that the machine you're connecting to at TV3 is causing your bottle-neck?

On my 1 mbit connection I often only get 10k from a web site. Has nothing to do with my connection and everything to do with the rest of the path to my connection.

I would be calling TV3 for a 'please explain'.

Cheers Don

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NokiaRocks

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#35128 7-May-2006 01:00

i dont mind paying the $59 for broadband a month, i do object to having to pay the $34 line rental for a phone line that never has a voice call placed down it though

DonGould

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#35130 7-May-2006 01:03

NokiaRocks: i dont mind paying the $59 for broadband a month, i do object to having to pay the $34 line rental for a phone line that never has a voice call placed down it though

Where are you located? Are you in any of the three major centers?

Cheers Don

Further... see: www.tcn.bowenvale.co.nz and put an end to your problem permantly.

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bcourtney

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#35133 7-May-2006 01:23

Jaffa: I have seen Nokias 12 month roadmap for cdma and some EVDO. Very very cool handsets.

CDMA and EVDO are far from dead!

OK this is heading WAY off topic but I am getting a little tired of people making unsubstantiated comments on here about Nokia's/Sanyo's/Samsung's/Bob's Uncle's 12 month roadmap for CDMA/EVDO - "Very very cool hansets" etc etc. This would be grand if any of it were happening, but I've been waiting now and nothing seems to be appearing. Besides which, it would appear that Sprint/Telecom seem to take on a very conservative/limited range of phones. No handset has come out of Telecom to this point that i would class as 'cool' let alone "very very cool". But being the mobile data junkie I am i will sit here... and wait... just like Jetiteech...

Apologies to DonGould, I'm actually enjoying this thread (the on-topic side of things) but simply couldn't let that one go by

NokiaRocks

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#35141 7-May-2006 10:18

DonGould:
NokiaRocks: i dont mind paying the $59 for broadband a month, i do object to having to pay the $34 line rental for a phone line that never has a voice call placed down it though

Where are you located? Are you in any of the three major centers?

Cheers Don

Further... see: www.tcn.bowenvale.co.nz and put an end to your problem permantly.

I live in Lower Hutt, and i dont see how your website helps me at all. I want cheaper internet, why would i want to spend money on more wifi gear?

retardinator

114 posts

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#35158 7-May-2006 17:22

NokiaRocks:
DonGould:
NokiaRocks: i dont mind paying the $59 for broadband a month, i do object to having to pay the $34 line rental for a phone line that never has a voice call placed down it though

Where are you located? Are you in any of the three major centers?

Cheers Don

Further... see: www.tcns.bowenvale.co.nz and put an end to your problem permantly.

I live in Lower Hutt, and i dont see how your website helps me at all. I want cheaper internet, why would i want to spend money on more wifi gear?

Off topic I know, but I couldn't help but guide this guy to an answer

http://www.usbwifi.orcon.net.nz/

sbiddle

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#35159 7-May-2006 17:34

Jaffa:
I have seen Nokias 12 month roadmap for cdma and some EVDO. Very very cool handsets.

The current fight between Nokia and Qualcomm is turning into a very interesting battle however and could certainly impact hugely on the CDMA and WCDMA markets if a resolution isn't reached. Nokia obviously aren't going to stop making handsets as it's what they do but there are a lot of threats being thrown around by both companies.

nzbnw

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#35160 7-May-2006 18:18

sbiddle:
Jaffa:
I have seen Nokias 12 month roadmap for cdma and some EVDO. Very very cool handsets.

The current fight between Nokia and Qualcomm is turning into a very interesting battle however and could certainly impact hugely on the CDMA and WCDMA markets if a resolution isn't reached. Nokia obviously aren't going to stop making handsets as it's what they do but there are a lot of threats being thrown around by both companies.

I wonder how Nokia and Sanyo merging their CDMA divisions will affect this, with Sanyo using Qualcomm chips??

turb

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#35170 8-May-2006 08:27

Apparently the "exchange" isn't nessesarily a big building with a Telecom sign on the outside. It can just be a green box by the side of the road where the fibreoptic meets the copper. Does anyone know whether Telecom will continue extending the fibreoptic out to the suburbs (and reducing our pings) or whether the unbundling will stop any investment in that direction? (no i don't work for Telefascist!). Will the other ISPs be able to fit their gear into these roadside boxes?

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ajobbins

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#35183 8-May-2006 12:59

I have been pretty much 'on-the-fence' about LLU until recently. A government, especially a left-wing govt as we have now will lean towards regulation when the market is failing. Telecom, being the monopoly it is was able to artificially inflate the price of its services to well above the market equilibrium. What the government is doing is allowing a free market and allowing supply and demand to move back into equlibrium.

I can sympathise with Telecom, but the New Zealand governtment is doing what is best for New Zealand as a whole, that is their job. They can either do what is best for Telecoms shareholders (75% of which are overseas) or what is best for New Zealand as a whole.

I'm not a labour guy by any means, but good on them for taking this bold move.

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JonC

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#35188 8-May-2006 13:29

I have to agree with adamj - this issue is all to do with a monopoly and Telecom exploiting its monolopy in the market. The government gave them more chances than they deserved to fix it up, but they just didn't get broadband in NZ to where it should be. Saying that Telecom doesn't abuse its monopoly position are naive - any good business loves a monopoly position and Telecom was no exception. It had limited competition and it does just enough to match its competitors and nothing better. How do you explain it offering cheaper line rental in TCL areas? Competition is the great motivator for companies - without it, they will do "just enough" - with good competition, service gets better, prices come down and profit margins shrink - good for customers, bad for investors, share prices and CEOs.

I agree that the government do seem to be interfering with the private property rights of a company, but any investor who knows anything about the telecommunications sector will know that NZ was the EXCEPTION (until now) in terms of LLU regulation, so I don't think it will send a message that the government will go about seizing assets of private companies. Besides, there must be laws in place to prevent monopolies.

LLU is a bit of a gamble, but it has been proved to work elsewhere and it should encourage investment. Prior to now, everyone knew that Telecom held all the cards in the broadband game, so why bother. Frankly, the Resource Management Act and local councils (I'm refering to decisions that stopped TCL rolling out cable in Auckland) are more a deterant to investment than this LLU decision.

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