Broadband - What the government should have done!

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3892 posts

Uber Geek

#35220 8-May-2006 22:16

JonC: I have to agree with adamj - this issue is all to do with a monopoly and Telecom exploiting its monolopy in the market.

Oh come on.... our government doesn't have issue with monopolies, they create them. How many airport companies are there?

JonC: LLU is a bit of a gamble, but it has been proved to work elsewhere and it should encourage investment.

Where else has it proven to work? What do you define as "work"?

JonC: Prior to now, everyone knew that Telecom held all the cards in the broadband game, so why bother.

But Telecom didn't hold all the cards in the market at all. Now they're going to be slowing down the whole market for years while everyone fights about the ULL access. At least with what we had other providers where pushing forward with different technology answers.

JonC: 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.

Now there's a fair statement if ever I read one. I called our local council the other day and found out that it would cost ~$360 just for the paper work to thro an antenna on the side of a building to use wifi. TV antenna / dish doesn't require any paper work.

Cheers Don

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ajobbins

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#35231 9-May-2006 00:30

DonGould, im not sure if you have been completely brainwashed by TG or if just havent left the telecom building for the last 6 years....

Pretty much everyone who DOESNT work for Telecom is over the moon about LLU, its basically Telecom, some of its employees, and a TINY bunch of others who think this thing is really bad.

But Telecom didn't hold all the cards in the market at all. Now they're going to be slowing down the whole market for years while everyone fights about the ULL access. At least with what we had other providers where pushing forward with different technology answers.

This were holding all the cards. All of their competitors had to use Telecoms network. Telecom has deployed numerous stalling tacktics even just with UBS. This means they ARE holding all the cards. If they werent holding all of the cards the other Telcos wouldn't have cared. But you got the slowing down the market bit right. They will do everything they can to make this thing as anti-competitive as possible

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DonGould

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#35233 9-May-2006 00:45

adamj: DonGould, im not sure if you have been completely brainwashed by TG or if just havent left the telecom building for the last 6 years....

About the only Telecom building I've been in, in the past 6 years, is the Telecom Shop in the Riccarton mall.

adamj: Pretty much everyone who DOESNT work for Telecom is over the moon about LLU,

Yes I noticed that, and I really can't work out why you're so happy. It's a disaster for common sense if you think about it. It failed in Australia.

adamj: Telecom has deployed numerous stalling tacktics even just with UBS.

Ok now I'm completely confused. As I understood it we don't have UBS in NZ. Anyone who wants to provider DSL service on Telecom copper has to use a Telecom DSLAM don't they?

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bonkiebonks

389 posts

Ultimate Geek

#35234 9-May-2006 01:02

Have you been asleep or what?

All ISPs provide ADSL access to their customers via Telecom's Unbundled Bitstream Service. Have a look on Orcon's website (http://www.orcon.co.nz/) and you'll even find that they name their ADSL packages as BitStream. As someone pointed out (can't remember if it was on this forum or the other forums), wholesale is also available but the prices are probably too expensive for them to be competitive in this cut-throat business. Well, not really cut-throat, but the margin they're making out of UBS is already very low, and the last thing they need is higher wholesale cost which will hurt their bottom line.

What the government has included in their Wednesday announcement was to regulate Telecom so they provide unconstrainted UBS to ISPs. I guess that will be the only difference between the current UBS and the future UBS. It is a major difference if you ask me.

bcourtney

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#35235 9-May-2006 01:13

adamj: Pretty much everyone who DOESNT work for Telecom is over the moon about LLU, its basically Telecom, some of its employees, and a TINY bunch of others who think this thing is really bad.

The reason why pretty much everyone is over the moon about LLU is because they don't understand it (and I doubt even 5% of the population understand LLU let alone know the pro's and con's), they have just heard on the news that broadband is going to get cheaper - and that's all they are gauging it on.

Those amongst us that don't agree with it being a good move have enough market nous to understand the many drawbacks. Telecom employees aside, this isn't a pro versus anti Telecom argument here. Take Telecom out of the picture, (as much as you can) this is about what really IS going to happen in the future for you and I with respect to the broadband et al technologies that are now going to be implemented in NZ and at what rate.

I couldn't give a flying Fujitsu about broadband uptake numbers in NZ, I want to be offered the best available broadband technology, in a reliable and stable market, by a company that understands the technology COMPLETELY and has done the hard work and paid for it themselves. I don't see any of these other leech ISP's really coming to the party and helping out to deliver the best available techonolgy to us - this will all still come from Telecom.

Screw Annette Presley and her bread loaves

(p.s. All this aside, i am quite happy with my TelstraClear cable at home and my Fibre in my business

)

freitasm

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#35249 9-May-2006 08:56

adamj: Pretty much everyone who DOESNT work for Telecom is over the moon about LLU, its basically Telecom, some of its employees, and a TINY bunch of others who think this thing is really bad.

I am part of the tiny bunch which thinks this is not so good (I am not saying really bad).

What I will see happening is all ISPs piggybacking on old copper network to sell their "services".

People forget that

a) purchasing DSLAMs will have a cost
b) some cabinets don't have space, and expansion costsso there'll be a cost f
c) maintaning copper network has a cost
d) developing technology has a cost

So, how is this cost being reduced to zero? By charging customers. Faster Internet? Only to the limit of the copper. Cheaper? I doubt it.

Then comes the development. Telecom is investing on its NGN, which is AFAIK not part of the local loop. I haven't heard any other company, except for Woosh (wireless), TelstraClear (cable), and Econet (cellular) laying plans for development of their own, more modern, more efficient, and faster network.

Shame Econet doesn't seem to be in the cards for a while, Woosh is struggling with deployments and QoS, and TelstraClear could not deploy cable in AKL because of council decisions.

JonC

425 posts

Ultimate Geek

#35253 9-May-2006 09:14

freitasm:
a) purchasing DSLAMs will have a cost
b) some cabinets don't have space, and expansion costsso there'll be a cost f
c) maintaning copper network has a cost
d) developing technology has a cost
So, how is this cost being reduced to zero? By charging customers. Faster Internet? Only to the limit of the copper. Cheaper? I doubt it.

Currently Telecom covers a, c and d and charges ISPs $X per customer for it. With LLU, the ISPs will pay for a, maybe b (not sure???) and d and Telecom will charge them $Y, where Y<X and is set by the government. That's my understanding - please correct me if I'm wrong.

So I'm guessing that how things go with LLU will depend on whether companies think that they can make the above equation make a profit for whatever the government sets Y to be.

Although the long-term future of broadband is probably not going to come down your phone line, there is still a lot of bandwidth left on the old copper network that currently isn't being used and if that's going to be the most cost-efficient way of getting broadband to customers, then that's what ISPs will deliver.

Does anyone know if there's any hope of TCL expanding their network into Auckland? I had heard it had failed because of complaints from residents that the ugly coax would blight their streets and the council caved in. I like seeing the cable running around Wellington because it means there's an alternative way of getting TV, phone and internet here, which reduces bills and provides a better service than anyone else can get currently over a phone line.

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bcourtney

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#35263 9-May-2006 10:57

JonC: Does anyone know if there's any hope of TCL expanding their network into Auckland? I had heard it had failed because of complaints from residents that the ugly coax would blight their streets and the council caved in. I like seeing the cable running around Wellington because it means there's an alternative way of getting TV, phone and internet here, which reduces bills and provides a better service than anyone else can get currently over a phone line.

Why would TCL WANT to expand into Auckland?! There would surely be fear of their own network being forced to open up to the masses and therefore reducing profit margins immensely, giving a ridiculously low return on the investment...

JonC

425 posts

Ultimate Geek

#35265 9-May-2006 11:16

DonGould: Oh come on.... our government doesn't have issue with monopolies, they create them. How many airport companies are there?

Just because I err on the side of the government in this case, it doesn't mean I have to defend all their decisions. I support LLU cautiously - it's not going to be broadband heaven all of a sudden, but I believe it's better than the status quo.

DonGould: Where else has it proven to work? What do you define as "work"?

I can only compare it to the UK, where I was living the past few years. LLU was introduced there some 4-5 years ago and the broadband market there is now demonstrably better than it is in NZ. By "work" I mean quicker speeds available at cheaper costs for consumers. There is also a good range of ISPs offering lots of different types of packages.

DonGould: But Telecom didn't hold all the cards in the market at all. Now they're going to be slowing down the whole market for years while everyone fights about the ULL access. At least with what we had other providers where pushing forward with different technology answers.

Well that really depends on how the government implements and runs the regulations. I do think you're right though - there won't be a sudden improvement within a couple of years - it will take more like three or four years before its effects are felt (for better or worse).

NokiaRocks

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#35266 9-May-2006 11:32

atleast we're starting to making our way towards those 3-4 years now rather than in another 3-4 years

Juan Incognito

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#35280 9-May-2006 16:15

Just a comment in response to the first few posts: ULL is not a wacky, unreasonable or out of left field policy, it has been the orthodox in comparable states/economies to NZ over the last 5 years. All of these countries are regulary used as points of comparison for all sorts of things, why not ULL? If TG wants to change countries to pursue a Telco career outside of ULL's influence she might have to move to the developing world or the US, as she won't find it elsewhere.

Regarding letting other people access other existing networks, well, it does seem unfair to penalise on TCNZ. However TCNZ is the only company with total market penetration, all others have very small networks, comparatively. Creating a total open access regime would be massively complicated and time consuming, if fair. Having one network opened is a compromise that seeks to solve the two main perceived problems: poor quality broadband and low penetration. Its not designed to create a totally fair regime.

Regarding future networks investment/ or broadband access, well, I assume that once again MED/government is betting on new technology to save us. Back in the day they didn't unbundle because new technology was going to make TCNZ's monopoly moot. It hasn't happened yet, and everyone got sick of waiting (the best efforts of Woosh/Wired country aside). I suspect that now things like Wi-Max are looking like real, cheap options people in power might be thinking that 5-10 years down the track wireless will be cheap and universal, thus removing the need for a copper/fibre to the home/business style network to maintain existing and future demand. We may also have a whole bunch of financially viable 2nd tier ISPs able to invest in such futures, unlike today where most of them were slowly going broke due to the very poor financial return of UBS.

JonC

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Ultimate Geek

#35281 9-May-2006 16:24

Juan Incognito: If TG wants to change countries to pursue a Telco career outside of ULL's influence she might have to move to the developing world or the US, as she won't find it elsewhere.

Nope, AFAIK the US has implemented a LLU policy, so it's off to Mexico for TG :-)

ajobbins

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#35282 9-May-2006 16:32

Anyway, it's going ahead so I guess we will see what happens in due course

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nzbnw

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#35285 9-May-2006 16:54

adamj: Anyway, it's going ahead so I guess we will see what happens in due course

But is it? Well that’s if what TG has to say below means anything;

"This isn't being driven by the regulator. This is pretty much a manufactured grievance. You know that's the case because the only people marching in the streets about it are our competitors, not customers."

Gattung also said that contrary to what the media was reporting, the unbundling of Telecom's local loop was far from a done deal. She also doubted the Government would take any serious action against Telecom.

"The Government is way too smart to do anything dumb here."

I hope for the sake of free business, Telecom, New Zealand and anyone with a remote understanding of economics and the effects it will have on New Zealand, this is true.

Juan Incognito

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Wannabe Geek

#35288 9-May-2006 16:57

The US example is not a good one to follow, and I belive that Mexico may have made some very recent moves around LLU, hard to tell really since I can't speak Spanish.

Regarding TelstraClear and cable, has anyone heard them state they would roll out widespread cable networks to the home recently? I've not heard anything in the press, and given the financial pressure that Telstra Australia is operating under, and its decision not to let TelstraClear build a 3G mobile network anytime soon I'd doubt they have any immediate plans for big investment. Further, I don't think ULL usually applies to non monopoly network owners. Neither Optus's residential, nor Soul's quite large network are subject to the ULL regime in Australia, so far as I know.

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