Congrats - you are subsidising Chorus shareholders by $100s of millions

Forums › New Zealand Broadband › Congrats - you are subsidising Chorus shareholders by $100s of millions

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Ultimate Geek
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#889297 3-Sep-2013 22:11

I could understand part subsidising the fibre rollout from copper revenue, if 30% of the UFB market wasn't taken up by companies that have no copper revenue to prop them up. If they can do it, why not chorus?

Sure fibre will eventually replace copper, but in the mean time I don't see why I should pay the same or more for an inferior connection. It's not choice that concerns me, but access to service. Don't want me to stay on copper, don't like that I'm paying less for it that fibre? Hurry up and connect my fibre then. Push people off of copper when they have somewhere to jump, not before.

I imagine, quite naively I'll admit, that once the copper network starts being abandoned on mass that the left over equipment could be frankensteined into still copper only areas when equipment breaks down, basically running the copper network into the ground but still keeping people connected until they can get fibre. If fibre rollout costs really are higher than expected then how to make that transition economically should be considered now, exit plans already in place when the time comes. Slowly powering equipment down and mothballing it til the reaper comes for it.

One worry I have being in Christchurch is that chorus have no reason to care, enable has the ufb contract here but I'll be waiting til near the end of the rollout to get an install. When chorus gets that low on customers here, how far will the quality of their services fall? And will I be paying through the nose for a connection that carrier pigeons laugh at?

richms

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#889323 3-Sep-2013 22:41

Ragnor: Have you considered that: Copper is likely to become more expensive to run as more people switch off to fibre because the economies of scale will be lost... the fixed costs spread over less customers.

At which point, they have the option of moving to fiber so a huge hike of the price will not matter since they can just move to nice cheap fiber services.

Richard rich.ms

colinuu

246 posts

Master Geek

#889325 3-Sep-2013 22:43

A very interesting debate going on here!

Does it really matter how your internet data is delivered, as long as you can access what you need with a reasonable reliability?

Fibre is the way of the future for urban areas, and eventually we can see a time coming when the copper will be retired in favour of fibre. But I think that is more for the benefit of the telcos, as data delivery by fibre will become more economic and the copper network starts costing too much in maintenance. For the majority of internet users there is no pressing need to switch to fibre. So why should the consumer pay more for the connection, unless he wishes to take advantage of the higher capacity?

Those of us living out in the wops for whom the copper network is already dead and buried as far as data goes, and who will never see fibre in our lifetimes, will have to rely on wireless of some sort. We are already connecting through the RBI, for which we pay more for a lesser service, but hey, at least it works (mostly)! But please, let's have an end to the old "townies subsidise rural" story. It's no longer valid. [And, just by the way, I would be rather teed off right now if I happened to be an English Premier League fan, wouldn't I] Hopefully I'll live to see a 4G/LTE service delivering data at a more useful rate, but I'm not holding my breath while waiting.

In the end it's not the physical medium that matters, more being able to access a reliable service commensurate with your needs. Pricing in urban areas should reflect the speed and data availability according to the selected plan, while rural dwellers will pay according to the cost of their particular wireless solution per population served by it.

richms

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#889327 3-Sep-2013 22:44

PaulBags:
I imagine, quite naively I'll admit, that once the copper network starts being abandoned on mass that the left over equipment could be frankensteined into still copper only areas when equipment breaks down, basically running the copper network into the ground but still keeping people connected until they can get fibre. If fibre rollout costs really are higher than expected then how to make that transition economically should be considered now, exit plans already in place when the time comes. Slowly powering equipment down and mothballing it til the reaper comes for it.

The equipment which breaks, is decrepid and long over due for replacement and causes all the problems on a copper network _is_ the copper. Its not like they will pull the copper out of the ground in one place and put it in somewhere else. For less labour costs than fixing the copper in most cases they can deploy fibre. Why fix it at all when it breaks?

Richard rich.ms

giollarnat

138 posts

Master Geek

#894817 12-Sep-2013 16:39

"Axe the copper tax" campaign.

It is being led publicly by Consumer New Zealand chief executive Sue Chetwin, InternetNZ chief executive Jordan Carter and Paul Brislen, chief executive of the Telecommunications Users Association of New Zealand (Tuanz).

Other members include the Federation of Maori Authorities, Grey Power, the the New Zealand Union of Students' Associations, Rural Women and the Unite union.

Kiwiblog, run by David Farrar, the head of the National Party's polling company, is also a member.

"This is a story of the Government planning a new $600m tax on Kiwi broadband customers to unfairly boost the profits of Chorus, a private monopoly, that last year made a profit of $171m," Chetwin said at the campaign launch in Wellington.

"There will be no benefit to any Kiwi consumer from the new $600m tax," Chetwin said.

"This $600m tax follows lobbying by Chorus, which is building part of a new internet network that 70 per cent of Kiwis won't use this decade - and that a quarter of us will never have access to. No rural users ever will."

http://www.stuff.co.nz/business/industries/9155840/Chorus-big-winner-in-internet-reform-Coalition

sbiddle

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#894821 12-Sep-2013 16:43

giollarnat:
"Axe the copper tax" campaign. It is being led publicly by Consumer New Zealand chief executive Sue Chetwin, InternetNZ chief executive Jordan Carter and Paul Brislen, chief executive of the Telecommunications Users Association of New Zealand (Tuanz). Other members include the Federation of Maori Authorities, Grey Power, the the New Zealand Union of Students' Associations, Rural Women and the Unite union. Kiwiblog, run by David Farrar, the head of the National Party's polling company, is also a member. "This is a story of the Government planning a new $600m tax on Kiwi broadband customers to unfairly boost the profits of Chorus, a private monopoly, that last year made a profit of $171m," Chetwin said at the campaign launch in Wellington. "There will be no benefit to any Kiwi consumer from the new $600m tax," Chetwin said. "This $600m tax follows lobbying by Chorus, which is building part of a new internet network that 70 per cent of Kiwis won't use this decade - and that a quarter of us will never have access to. No rural users ever will."

http://www.stuff.co.nz/business/industries/9155840/Chorus-big-winner-in-internet-reform-Coalition

Clearly nobody ever bothered to look at the meaning of "tax" before starting such an idiotic campaign.

Despite reading most of what they've released today I'm actually struggling to see what they're actually objecting to or what they actually want.

1080p

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#894834 12-Sep-2013 17:06

I'm happy to pay this tax.

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SteveON

1916 posts

Uber Geek

#894840 12-Sep-2013 17:37

Im sure copper lines still cost money to maintain. I for one believe it is in the best interest to charge more for copper! How else would they incentivise the population to move off it? Its not like unmetered iptv is coming anytime soon.

sbiddle

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#894865 12-Sep-2013 18:31

Funny how we didn't see all these organisations banding together when the Commerce Commission were ripping off all NZers with their inept calculations for UBA pricing.

ajw

1932 posts

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#894876 12-Sep-2013 18:43

Perhaps we should also blame the inept politicians who mandated the role of pricing determinations be undertaken by the Commerce Commission.

matisyahu

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#894885 12-Sep-2013 19:08

Le sigh, someone is going to have to pay - either the tax payer (us), the customer (us) or the shareholder (us via lower returns to our kiwisaver which impacts long term). There is no such thing as a getting a free ride without someone else getting the bill later down the line.

As for copper vs. UFB - personally as UFB is placed in the ground and setup (operational) they should rip up the copper at the same time - UFB is there to replace copper and not to compliment it. As for the players, if certain players are procrastinating when it comes to getting their VoIP solutions setup then they're the ones who should feel the full brunt of the market speaking.

"When the people are being beaten with a stick, they are not much happier if it is called 'the People's Stick'"

PaulBags

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#894925 12-Sep-2013 20:24

kawaii: As for copper vs. UFB - personally as UFB is placed in the ground and setup (operational) they should rip up the copper at the same time - UFB is there to replace copper and not to compliment it.

I agree in principal, but there would be alot of older people angry at losing their simple line powered phone lines that just work. Heck I want some time to adsorb the idea of VoIP; basic workings so I'm not scratching my head like setting up a VCR in the 80's, security, reliable battery backup, and more importantly making sure I can set it up to Just Work for my parents. People need a lot of notice, just look at freeview: people given a lot notice and still a massive rush to get installs and sort out what's going on right at changeover time. We've still got some useless unconverted tv's stuck in walls and up on brackets at my work.

UreKismet

10 posts

Wannabe Geek

#895115 13-Sep-2013 10:24

Well I was fairly angry about the fiber rollout before - now I'm ropeable - set aside all of the arcane arguments based on personal economic beliefs and corporate loyalties and consider the issue at its simplest.
NZ appointed a telecommunications commissioner to make these calls by objectively assessing the circumstances & deciding based on a set of criteria Parliament approved to ensure the decision would be fair to everyone.
The Commissioner goes through a thorough check before appointment to ensure there are no conflicts of interest etc.
That commissioner has made a decision that doesn't sit well with government members many of whom are known to be large investors in NZ's share market. Sure they set up so called blind trusts to administer their holdings during their term in office but since Telecom or more correctly now, Telecom & Chorus, comprise such a significant proportion of the NZX market capitalisation, it is inconceivable that those government MP's with large investments won't derive a substantial benefit from their decision to overturn the independent arbitrator.

I don't know about anyone else, but for me that reeks of corruption, a fingers in the till scam even worse than the one that awarded over 1 billion of taxpayer monies to Telecom/Chorus to build the UFB in the first place.
That decision saw Telecom's (at that time there was only telecom) stock market value more than double in the 18 months after that call was made. The share value doubled in Sydney & on the New York Stock Exchange as well making a lot of non New Zealanders very rich courtesy of the taxes you & I pay.
That makes me mad, what's worse is it is happening again and everyone is sitting round arguing technical toss instead of seeing this corruption for what it really is.

NonprayingMantis

6434 posts

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#895120 13-Sep-2013 10:42

sbiddle:
giollarnat:
"Axe the copper tax" campaign. It is being led publicly by Consumer New Zealand chief executive Sue Chetwin, InternetNZ chief executive Jordan Carter and Paul Brislen, chief executive of the Telecommunications Users Association of New Zealand (Tuanz). Other members include the Federation of Maori Authorities, Grey Power, the the New Zealand Union of Students' Associations, Rural Women and the Unite union. Kiwiblog, run by David Farrar, the head of the National Party's polling company, is also a member. "This is a story of the Government planning a new $600m tax on Kiwi broadband customers to unfairly boost the profits of Chorus, a private monopoly, that last year made a profit of $171m," Chetwin said at the campaign launch in Wellington. "There will be no benefit to any Kiwi consumer from the new $600m tax," Chetwin said. "This $600m tax follows lobbying by Chorus, which is building part of a new internet network that 70 per cent of Kiwis won't use this decade - and that a quarter of us will never have access to. No rural users ever will."

http://www.stuff.co.nz/business/industries/9155840/Chorus-big-winner-in-internet-reform-Coalition

Clearly nobody ever bothered to look at the meaning of "tax" before starting such an idiotic campaign.

Despite reading most of what they've released today I'm actually struggling to see what they're actually objecting to or what they actually want.

I really don't think they are going to win many friends by using weasel words and misleading terms like tax/subsidy to mean something totally different.

UreKismet

10 posts

Wannabe Geek

#895184 13-Sep-2013 13:13

I would have thought what they are campaigning against is fairly obvious, that is The Telecommunications Commisioner, an independent arbitrator appointed by Parliament has made the decision he/she believes will be best for Aotearoa, then a self interested mob of stock market investors (I.E. the national cabinet) has chosen to overrule the independent arbitrator's decision resulting in an increased cost to kiwis and increased profits for shareholders in Chorus.
Some of the government MP's will hold shares in Chorus and will directly profit from this decision.
I call that corruption what do you call it. "The cost of doing business" or something equally facile, cliched or sound-bitey?

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