Users with faster fibre (846/480Mbps) or Hyperfibre

noroad:

Here is the crazyness of the anti-competitive behaviour from Telecom in those days. "Jetstream" from Telecom was the only adsl option available due to the lack of forced unbundling of the asset that the entire country paid for. Jetstream had a data accounting charge to the end user. As a wholesale ISP you could buy the ADSL tail that was then handed over to you in Auckland/Wellington/Christurch on a 155Mb/s ATM OC3 (this cost you $4000 month). Then as an ISP you would supply the Internet transit capacity to your customers. But here is the thing, Telecom (remove swear words here) would not just charge the ISP for the local tail, oh no, Telecom would also charge the wholesale ISP for the data transfered! So no wholesale ISP could ever do anything apart from lose money as they were paying Telecom for transit capacity that Telecom was not even providing! Absolutely criminal anti-competitive behaviour, so I would not talk too loudly about being on the team preventing unbundling at that time.

Rant about telecom:
Back then, the telecom network was very much microwave powered. They just didnt have the capacity between towns for huge amounts of data transfer and fibre wasnt everywhere.
This was a time when a 155mbit OC3 microwave link was considered super fast.

The first fibre cable into gisborne i dont think arrived until at least 2006.
It wasnt diversified with an alternate route out of gisborne around the east cape until 2013.

It was a huge undertaking and the network was perfectly fine for handling voice calls. There was absolutley no need to upgrade the regional telephone networks at the time.
Except for data - the data is what caused the upgrade requirement and needed many millions spent on laying intercity fiber cables.
I can see justification with the limited existing bandwidth into major towns and cities, a need to charge for the users who benefit from that capacity so new inter-city fiber cables could be laid.

Telecom was at the time also backhauling the tail circuits to one of those convenient handover points, while later it was up to the ISP to deliver the circuit from their auckland data centre, to a local handover point closer to the end customer.
With UFB a national ISP needed to build a national network to backhaul their circuits to something like 16? local handover points (before chorus introduced tail extensions).

Rant about NBN:

The problems...
1) Multi technology mix.
- They built the skymuster satelite using stationary orbit technology just only a few years before low earth orbiting starlink tech came on the scene. And at huge cost, now users are fleeing to starlink in droves. But NBN still needs to pay for it.
- They accepted slower connection speeds as a result of purchasing Telstra's copper plant. So many users who are far from their cabinet can only get 25mbit plans.
- Rural users served off 4G LTE services which are congested. NZ did better by getting local isp network operators involved who have less tolerance for congestion.

2) The pricing
NBN delivers a tail circuit for a set monthly fee just like our LFCs do.
There is a fee per circuit which I understand is based on the plan peak speed, not the technology used. So the ISP pays the same for a 25mbit circuit if it is delivered over satellite, 4G, VDSL, DOCSIS or Fibre. I do like the ethos behind this idea.

However the ISP must also pay a capacity charge. There may be 50 circuits at a local handover, each capable of 25mbits peak speed but they also need to purchase a number of megabits of capacity to share among those.
So an ISP can sell 50x 25mbit circuits (1.25gbit) but only purchase 400mbits of the capacity component and let them congest a bit at peak times. Outside of the 8-11pm period, users would be happy they get their full speed, and it only slows down by 33% for a couple of hours in the evening.
By going cheap on the capacity service, an ISP can lower their cost per household served and compete against other ISPs on price. Its a race to the bottom.

In NZ, the price to serve each house is rather much the same since an ISP only pays the circuit charge.

Its simply the circuit fee which has a peak speed of say 300mbits. Each circuit has a dedicated 2.5mbits of committed capacity to the local handover point.
There are only 16 subscribers on a 2gbit PON port so in effect from the OLT at the exchange there is a dedicated 125mbits of capacity per circuit. It is very rare that 15 subscribers would each be using a collective 1gbit of capacity so there is always that spare gigabit for subscriber 16 to do their speed test.
Chorus advertises this to ISPs as they are "running an uncongested network" which I think is a pretty cool thing that we have - quite literally NZ became one of the best countries in the world for internet access.

However it could have gone slightly differently.
In the original UFB pricing plans, the LFCs could sell multicast capacity for linear broadcast television. The idea being Sky and Vodafone or others could be delivering service to their set top boxes via the UFB network instead of coax cable or satellite.
Those broadcasters would pay for dedicated capacity on the UFB network, which would take away from the general pool available to internet circuits.

If the remaining capacity on each OLT port was then reduced to 1gbit then we might start seeing problems with speed tests at peak times. Not an issue though because each circuit still has its dedicated 2.5mbits and still there is ~60mbits per circuit of shared capacity. ISPs just need to advertise that to their residential customers and set appropriate expectations.
But the market has not found a need to let customers know their 300mbit circuit only actually has a 2.5mbit dedicated capacity.

There is also the option for ISPs to purchase extra dedicated capacity for a specific circuit (usually business connections) on top of the base 2.5mbits that is included with each circuit. This could create a nice premium product for a business that didnt want their fiber circuit to fall below a certain amount of capacity at times of congestion.

But the broadcasters so far have not taken the LFCs up on the offer. They just individually stream on an ad-hoc basis as users request via their internet circuits. So as an ISP we have not found a need to purchase dedicated capacity for our business customer circuits.

3) Legal obstacles to other network operators

In Australia it is effectively illegal to build a fixed line network that is capable of delivering circuits to brownfield users greater than 25mbits, more than 1km from the existing network footprint as of ~2011.
This means an ISP cant bypass the NBN to provide a better service, or enable themselves to access different pricing unless that physical network already existed in 2011.

Because NBN has decided 100mbits is a great speed, they have no desire to offer gigabit plans or hyperfibre style plans and therefore the price of those faster fibre circuits is still absurdly high meaning the average speed in australia is much lower as households purchase what they feel they can afford. I believe part of this is that so little of the multi technology mix is based on fibre to the home, that it would create a huge disparity between those with fibre which can access the faster speeds and those with DSL or cable who cant - which creates a publicity problem. With gigabit priced so high, property values are only just starting to be affected by fibre availability. Because most users can still access the fiber speeds on copper or cable, it doesnt matter so much if you have fibre for the average user.

In NZ, the LFCs in many areas face competition from other network operators who are all trying to get the ISPs business. Eg. in hawkes bay, chorus competes against Unison/Tuatahi and in Wellington, chorus competes against Citylink. So LFCs have an incentive to offer faster circuit speeds - otherwise someone else might find a business case to overbuild. This is what bought about hyperfibre.

In Australia, NBN does face competition but only in the major cities where companies like TPG have historically built their own networks and target dense apartment complexes.
Companies like TPG who want to offer a speed faster than 25mbits on their own networks must pay a monthly tax to NBN to compensate NBN for the lost customer. Its a whopping $7.10 per month per circuit.
The justification of this is to help pay for the rural 4G/Satellite networks that NBN is obligated to run.

Not only does this screw the business case for a competitor to overbuild the NBN, its almost impossible anyway with limits to building or expanding existing network footprints.

Rant over.

turtleattacks

noroad

raytaylor