Price of DSL makes me weep

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#1515812 18-Mar-2016 18:24

NonprayingMantis:

Its not that ADSL is expensive.

Its that UFB is cheap.

UFB is massively subsidised by the government and the entire point was to stimulate demand for UFB by making it about the same price as copper - which is exactly what happened.

"Chorus’ business today largely comprises copper revenues ... Around 65% of Chorus’ FY13 revenues were reinvested in capital expenditure, most of it for fibre. "
direct quote from a document on the chorus website BackgroundQandA-on-UBA-decision.pdf

Translation, Chorus makes a heap from their copper network, and is using it to build a fibre network. So people using copper are subsidising the fibre network.

The problem is that around my area we have been relegated to the slowest ufb install date - previously it was just "some time after June 2017" however today I see it has been updated to 'by December 2019!' I was promised that our exchange would get a Faxability upgrade in a year back in the late 1990s (I would be still waiting if I could remember when I last used a fax) and about 5 years ago we were told that a cabinet was due to be installed at the end of our road "next year" - and that still hasn't happened. So what confidence do I have that we will actually get UFB?

Anyway, thank you very much Skinny for your 4G broadband plan. It was a mission to get it - mainly because the modelling showed we had zero coverage. But a Skinny sim in a 4G mobile showed there was coverage here, and thanks to @livingskinny, I was able to dump the copper and go wireless. I have 5 days and 2GB left on my free month (hmm, I wonder if I need to manually renew or if it happens automatically - I guess I find out tonight!) and I am loving the boost in speed, particularly the much much much faster upload speeds! The link is maybe 12 to 15km.

The only other option I had was a wireless connection, however due to a longer link of over 30km, the install cost was going to be ten times the cost of Skinny, the speeds slower than Skinny (but faster than adsl) and the monthly fee higher - hence it hadn't quite happened yet.

ockel

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#1515825 18-Mar-2016 18:30

Localeyes:

NonprayingMantis:

Its not that ADSL is expensive.

Its that UFB is cheap.

UFB is massively subsidised by the government and the entire point was to stimulate demand for UFB by making it about the same price as copper - which is exactly what happened.

"Chorus’ business today largely comprises copper revenues ... Around 65% of Chorus’ FY13 revenues were reinvested in capital expenditure, most of it for fibre. "
direct quote from a document on the chorus website BackgroundQandA-on-UBA-decision.pdf

Translation, Chorus makes a heap from their copper network, and is using it to build a fibre network. So people using copper are subsidising the fibre network.

The problem is that around my area we have been relegated to the slowest ufb install date - previously it was just "some time after June 2017" however today I see it has been updated to 'by December 2019!' I was promised that our exchange would get a Faxability upgrade in a year back in the late 1990s (I would be still waiting if I could remember when I last used a fax) and about 5 years ago we were told that a cabinet was due to be installed at the end of our road "next year" - and that still hasn't happened. So what confidence do I have that we will actually get UFB?

Anyway, thank you very much Skinny for your 4G broadband plan. It was a mission to get it - mainly because the modelling showed we had zero coverage. But a Skinny sim in a 4G mobile showed there was coverage here, and thanks to @livingskinny, I was able to dump the copper and go wireless. I have 5 days and 2GB left on my free month (hmm, I wonder if I need to manually renew or if it happens automatically - I guess I find out tonight!) and I am loving the boost in speed, particularly the much much much faster upload speeds! The link is maybe 12 to 15km.

The only other option I had was a wireless connection, however due to a longer link of over 30km, the install cost was going to be ten times the cost of Skinny, the speeds slower than Skinny (but faster than adsl) and the monthly fee higher - hence it hadn't quite happened yet.

Chorus gets not more than $1122 per premise passed for UFB. Its part of the terms between Chorus as a LFC and the Government. Chorus issues preference shares for 50% of this and debt securities for the balance. To say that Chorus "makes a heap from their copper network, and is using it to build a fibre network" shows that you do not understand the basic fundamentals of the UFB build. Please try again.

And when you do please quote the Return on Invested Capital (ROIC) that Chorus earns from its network, the pricing and returns terms associated with its regulated services vs its non-regulated services - and whether you believe these to be super-normal, normal or sub-normal economic profits.

Sixth Labour Government - "Vision without Execution is just Hallucination"

Localeyes

34 posts

Geek
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#1515831 18-Mar-2016 18:53

ockel:

Chorus gets not more than $1122 per premise passed for UFB. Its part of the terms between Chorus as a LFC and the Government. Chorus issues preference shares for 50% of this and debt securities for the balance. To say that Chorus "makes a heap from their copper network, and is using it to build a fibre network" shows that you do not understand the basic fundamentals of the UFB build. Please try again.

And when you do please quote the Return on Invested Capital (ROIC) that Chorus earns from its network, the pricing and returns terms associated with its regulated services vs its non-regulated services - and whether you believe these to be super-normal, normal or sub-normal economic profits.

$1122 per premise passed? Hmm, do we put UFB in the posh area of town where successful people want to work from home because they live on 1500 m² sections and would love to have UFB, or do we do the cheap areas of town first, where the unemployed live on 350 m² sections watching TV all day. We probably pass about 8 times as many premises per metre of road in the cheap areas so obviously the government wants to pay us a stack more to give UFB to the unemployed than to the wealth creators, so lets get going and leave the posh fringe areas till last!

I have a vehicle that cost 50k new, but now it is old. I would love to get just as much rental for it as for the new car that I am planning to buy with the proceeds, but I doubt my customer would be happy to pay the same for a 30 year old car as their neighbour up to road is for a five year old car or the guy in the next suburb is for their new car!

I don't care what return Chorus want on their invested capital. That is their shareholders interests, not the customer. The investment they made here was decades ago and Chorus have demonstrated that they don't care about maintaining the infrastructure in our area. I am happy that they will no longer earn any return on that from me.

PhantomNVD

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#1515832 18-Mar-2016 18:57

How much data do you actually use? SKINNY Briadband seems highly competitive if you use 120gb/month or less. And at least you actually HAVE the cable option.

I had a Chorus quote of $2600 just to GET copper installed to my boundary (Cross a small road!) for my new build, and then be stuck with the copper tax too! 😳

Skinny broadband has some issues in my barely in signal range, but still beats the cr$p out of a VDSL line id have had to pay $2600 to even be able to access. In a city central range, you should be able to do 40/30 easily... Check out their address availbility unless you need unlimited?

Localeyes

34 posts

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#1515833 18-Mar-2016 19:02

I found an address just over the hill from you where skinny broadband was available and there a small blips of coverage shown for 4G on the Skinny map.

So if you can actually get any 4G coverage it might be worth trying to get permission to try the modem. I get much better Skinny 4g speeds from the modem than I did on the phone.

ockel

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#1515839 18-Mar-2016 19:19

Localeyes:

ockel:

Chorus gets not more than $1122 per premise passed for UFB. Its part of the terms between Chorus as a LFC and the Government. Chorus issues preference shares for 50% of this and debt securities for the balance. To say that Chorus "makes a heap from their copper network, and is using it to build a fibre network" shows that you do not understand the basic fundamentals of the UFB build. Please try again.

And when you do please quote the Return on Invested Capital (ROIC) that Chorus earns from its network, the pricing and returns terms associated with its regulated services vs its non-regulated services - and whether you believe these to be super-normal, normal or sub-normal economic profits.

$1122 per premise passed? Hmm, do we put UFB in the posh area of town where successful people want to work from home because they live on 1500 m² sections and would love to have UFB, or do we do the cheap areas of town first, where the unemployed live on 350 m² sections watching TV all day. We probably pass about 8 times as many premises per metre of road in the cheap areas so obviously the government wants to pay us a stack more to give UFB to the unemployed than to the wealth creators, so lets get going and leave the posh fringe areas till last!

I have a vehicle that cost 50k new, but now it is old. I would love to get just as much rental for it as for the new car that I am planning to buy with the proceeds, but I doubt my customer would be happy to pay the same for a 30 year old car as their neighbour up to road is for a five year old car or the guy in the next suburb is for their new car!

I don't care what return Chorus want on their invested capital. That is their shareholders interests, not the customer. The investment they made here was decades ago and Chorus have demonstrated that they don't care about maintaining the infrastructure in our area. I am happy that they will no longer earn any return on that from me.

The $1122 also includes multi-dwelling units - so if there are 2,3,6 or 20 homes on the same premise Chorus still only gets not more than $1122. How it rolls out its network seems to be a mystery - it selected a mix of low-cost areas and high-cost areas. Propensity to pay or topography or access didnt seem to bear any correlation to the rollout process.

As to the ROIC that Chorus is allowed to earn on its regulated assets.... its a key determinant in the calculation of the REGULATED prices that its allowed to charge on both copper and fibre. Take your concerns to the Commerce Commission (feel free to make submissions) rather than Chorus shareholders. If your feel that defining a product price should be on the basis of a depreciated asset then state so. Dont make claims about the money that Chorus makes on its copper assets or how the fibre rollout is funded without having an understanding first. Not an opinion - an understanding about how the journey on pricing has been made over the last 15 years and where we are now - and where we might go into the next decade.

Sixth Labour Government - "Vision without Execution is just Hallucination"

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Localeyes

34 posts

Geek
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#1515868 18-Mar-2016 20:58

ockel:

Dont make claims about the money that Chorus makes on its copper assets or how the fibre rollout is funded

Is this an issue with me quoting a Chorus document?

"Chorus’ business today largely comprises copper revenues ... Around 65% of Chorus’ FY13 revenues were reinvested in capital expenditure, most of it for fibre. "

Or with my loose paraphrase and conclusion?

"Chorus makes a heap from their copper network, and is using it to build a fibre network. So people using copper are subsidising the fibre network.""

Based on the wording in that quote from the Chorus document ("largely" and "most") my calculations are that for every $10 that Chorus earned on my phone line, no less than $3, and probably more than $5 went towards installing fibre somewhere, but certainly not near my place, not then, not now and not for the next few years. Can you explain what I was doing if I wasn't subsidising the cost of someone else getting fibre?

ajw

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#1515869 18-Mar-2016 21:01

Localeyes:

ockel:

Dont make claims about the money that Chorus makes on its copper assets or how the fibre rollout is funded

Is this an issue with me quoting a Chorus document?

"Chorus’ business today largely comprises copper revenues ... Around 65% of Chorus’ FY13 revenues were reinvested in capital expenditure, most of it for fibre. "
Or with my loose paraphrase and conclusion?

"Chorus makes a heap from their copper network, and is using it to build a fibre network. So people using copper are subsidising the fibre network.""
Based on the wording in that quote from the Chorus document ("largely" and "most") my calculations are that for every $10 that Chorus earned on my phone line, no less than $3, and probably more than $5 went towards installing fibre somewhere, but certainly not near my place, not then, not now and not for the next few years. Can you explain what I was doing if I wasn't subsidising the cost of someone else getting fibre?

Agreed, even the govt gets sensitive when it is called a copper tax.

Lorenceo

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#1515900 18-Mar-2016 22:20

IMO it'd be a good idea for the Comcom to allow Chorus to charge more for copper service in areas where there's no UFB. But at the same time, also have to reduce it in areas where there is no UFB. Would help drive UFB uptake I imagine.

Yabanize

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#1515910 18-Mar-2016 23:01

Go here and put your address in to see if you can get Skinny Broadband. If so, Sign up by Sunday and the first month is free. It is $55 a month for 60gb delivered over Spark's 4G network. It requires a one off modem purchase of $149 (was $199)

Sideface

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#1515919 18-Mar-2016 23:14

Lorenceo:

IMO it'd be a good idea for the Comcom to allow Chorus to charge more for copper service in areas where there's no UFB. But at the same time, also have to reduce it in areas where there is no UFB. Would help drive UFB uptake I imagine.

If you want to encourage UFB uptake, do the opposite - make copper MORE expensive than UFB in UFB areas, with a lower rate for copper users without a UFB option.

Sideface

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quickymart

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#1515948 19-Mar-2016 08:09

Lorenceo:

IMO it'd be a good idea for the Comcom to allow Chorus to charge more for copper service in areas where there's no UFB. But at the same time, also have to reduce it in areas where there is no UFB. Would help drive UFB uptake I imagine.

So just charge more, regardless of whether UFB is available or not? That doesn't make sense.

BarTender

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#1516272 20-Mar-2016 06:54

Sideface:
Lorenceo:

IMO it'd be a good idea for the Comcom to allow Chorus to charge more for copper service in areas where there's no UFB. But at the same time, also have to reduce it in areas where there is no UFB. Would help drive UFB uptake I imagine.

If you want to encourage UFB uptake, do the opposite - make copper MORE expensive than UFB in UFB areas, with a lower rate for copper users without a UFB option.

Or better yet set a date for switch off of the copper.

I've read this thread with much despair. I'm on 14mb ADSL and neighbourhood next door getting UFB now. I'm not scheduled until late 2017. But that's life with major infrastructure builds like this some will be first others will be last. My 14mb gives me Netflix at 720p or sometimes 1080 and my kids never complain to me about buffering. So ADSL is ok enough for me to do everything I need right now and if I have large downloads they get queued overnight.

If it was a major issue for me I would move. But it's not and I love my house.

Suck it up buttercup.

ajw

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#1516320 20-Mar-2016 09:47

I'm in Stokes Valley according to Chorus my street will not have fibre until December 2019. Think I'll just keep vfone cable even after chorus wires my street.

SteveC

stevec
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#1516379 20-Mar-2016 12:24

antoniosk:
sbiddle:

Must be a pretty unique property up there to have no cable because that covers all of the area.

4G coverage around most of that area is fine on Vodafone, but indoors might give slightly different results.

I agree. Southgate is a recent subdivision (70's as I recall), and I thought went down all of it. Sure it's not voda just parroting bad records?

It might be the 'recent' nature of the subdivision that is the issue. Looking on Google Maps, I see that large chunks of Melrose (Melrose Road, parts of Buckley Road, for example) have underground cable, and Saturn were reluctant to put their HFC underground.

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