Campbell Live: Broadband fiasco (5/May/2010)

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#327286 6-May-2010 10:39

freitasm:

Then Telecom annouced the cabinetisation process, so unbundling exchange is completely meaningless after that...

Unbundling regulation came too late to be effective, if it was done in the early 2000's like Europe rather than 2006/07 a lot more unbundling would have been done by now and we'd all be better off due to increased competition.

The big delay for sub loop unbundling also created a lot of uncertainty and the decision on how backhaul costs are split from the cabinet to a pop between carriers in the cabinet is retarded. If I understand it correctly if their are 2 providers in the cabinet they pay 50% of the backhaul costs each even if Telecom (Wholesale) has 250/300 of the customers in the cabinet and the other provider has only 50/300.

Also it appears not all cabinets intstalled are the double size whisper cabinets with room for another providers gear, some are the single size ones and there is no room at all.

It simply doesn't make sense to build multiple sets of the core infrastructure eg: ducting for fibre, cabinets, exchanges.. for each area. I doubt the council's would give resource consent for multiple cabinets from different providers at the same location.

I believe Orcon stated the cost to serve a customer from a cabinet is 26% higher than from the exchange and it's not economic for them to do so.

Yes Vodafone and Orcon have stopped unbundling exchanges, but how can you blame them when sub loop unbundling is not viable and FTTH in the next 10+ years will change everything. When you invest in DSL equipment they would be planning for 10-20 years of life to get a reasonable ROI.

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#327288 6-May-2010 10:44

Ragnor:
I believe Orcon stated the cost to serve a customer from a cabinet is 26% higher than from the exchange and it's not economic for them to do so.

I recall reading a comment (which I'm sure came from the Commerce Commission) who while acknowledging the higher costs believed this could be balanced out by providers being able to charge a premium price for a premium service since speeds and performance would ultimately be higher.

maverick

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#327289 6-May-2010 10:45

freitasm: It also happened that when the companies decided to go on the unbundling they decided to go to the main centres - Auckland first, Wellington a long time after that... And that was it. Those companies go where the money is. If there is no money, well, leave it to Telecom to deploy infrastructure, and complain if they aren't fast enough.

It turns out that unbundling involves truckloads of money and if they don't sell 100% of their ports they are losing money.

The largest unbundling out there seems to be TelstraClear...

Then Telecom annouced the cabinetisation process, so unbundling exchange is completely meaningless after that...

Oh lets not get me started on this one.... !!!!

If they had only listened at the briefings given by Telecom's Greg Patchell (Group Technolgy Officer) on the June 1st 2007, the briefing book pages 23 to 41 where it lays out the Cabinetistaion processes (reading it again and see in my notes where I added "screws LLU,)... Then they jumped up and down about it a year later.

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#327297 6-May-2010 11:06

LLU was still worth it from a consumer point of view.

Total Home would be more expensive without price pressure from Orcon Purple and Vodafone Red Network plans.

Remember before LLU when only Wellington and Christchurch had $10-15 lower fixed landline pricing than Auckland and the rest of the country for example.

Telstraclear still think it's worthwhile installing gear in ~40 exchanges last and this year. Slingshot are installing gear in Hamilton. Which is positive for the end user.

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#327299 6-May-2010 11:10

Ragnor: LLU was still worth it from a consumer point of view.

Total Home would be more expensive without price pressure from Orcon Purple and Vodafone Red Network plans.

Remember before LLU when only Wellington and Christchurch had $10-15 lower fixed landline pricing than Auckland and the rest of the country for example.

Telstraclear still think it's worthwhile installing gear in ~40 exchanges last and this year. Slingshot are installing gear in Hamilton. Which is positive for the end user.

Yes but remember back the arguments for LLU vs Not from some providers was that the whole country was going to benefit not just the main areas ... look what happened

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#327327 6-May-2010 11:57

Sure they haven't benefited from more choice directly but I would say they have benefited from overall downward price pressure in general because of extra competition in the main centres.

pressF1

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#327363 6-May-2010 13:06

maverick:
Ragnor: LLU was still worth it from a consumer point of view.

Total Home would be more expensive without price pressure from Orcon Purple and Vodafone Red Network plans.

Remember before LLU when only Wellington and Christchurch had $10-15 lower fixed landline pricing than Auckland and the rest of the country for example.

Telstraclear still think it's worthwhile installing gear in ~40 exchanges last and this year. Slingshot are installing gear in Hamilton. Which is positive for the end user.

Yes but remember back the arguments for LLU vs Not from some providers was that the whole country was going to benefit not just the main areas ... look what happened

IIRC what happened was telecom rolled out cabinets to a number high density locations which did not necessarily need cabinets, whilst not rolling them out to locations which desperately needed it, and cut the revenue streams for the companies who were unbundling....then sub-loop pricing came back at such a cost as to be uneconomic (I know that was set by the com com) and you end up with the underlying network being primarily Telecom again...hmmm. Wonder why they (and the stock market by all indications) are nervous about the government building a national fibre network with open access??

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graemeh

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#327372 6-May-2010 13:29

pressF1:
maverick:
Ragnor: LLU was still worth it from a consumer point of view.

Total Home would be more expensive without price pressure from Orcon Purple and Vodafone Red Network plans.

Remember before LLU when only Wellington and Christchurch had $10-15 lower fixed landline pricing than Auckland and the rest of the country for example.

Telstraclear still think it's worthwhile installing gear in ~40 exchanges last and this year. Slingshot are installing gear in Hamilton. Which is positive for the end user.

Yes but remember back the arguments for LLU vs Not from some providers was that the whole country was going to benefit not just the main areas ... look what happened

IIRC what happened was telecom rolled out cabinets to a number high density locations which did not necessarily need cabinets, whilst not rolling them out to locations which desperately needed it, and cut the revenue streams for the companies who were unbundling....then sub-loop pricing came back at such a cost as to be uneconomic (I know that was set by the com com) and you end up with the underlying network being primarily Telecom again...hmmm. Wonder why they (and the stock market by all indications) are nervous about the government building a national fibre network with open access??

Another way to look at it is that the high density areas got more reliable and faster local access. I know my house has much more reliable broadband now that there is a cabinet 500m down the road.

I guess Telecom learnt a very valuable lesson from how they got whipped when their best revenue stream was cherry picked by toll bypass operators.

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#327375 6-May-2010 13:44

pressF1:

IIRC what happened was telecom rolled out cabinets to a number high density locations which did not necessarily need cabinets..

Telecom has to deliver 10Mbit/s to 20Mbit/s connections to 80% of New Zealanders by the end of 2011 as part of its government Operational Separation Undertakings.

Whether an area is high density doesn't matter, if your house is in a "high density" area but >2km in line wiring from the exchange then you are probably not going to be able get >10Mbit sync speed.

Cabinets are in fact required/neccesary.

Do you know of any examples of houses connected to cabinets when they are are within 2km of the exchange?

pressF1

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#327380 6-May-2010 13:59

Ragnor:
pressF1:

IIRC what happened was telecom rolled out cabinets to a number high density locations which did not necessarily need cabinets..

Telecom has to deliver 10Mbit/s to 20Mbit/s connections to 80% of New Zealanders by the end of 2011 as part of its government Operational Separation Undertakings.

Whether an area is high density doesn't matter, if your house is in a "high density" area but >2km in line wiring from the exchange then you are probably not going to be able get >10Mbit sync speed.

Cabinets are in fact required/neccesary.

Do you know of any examples of houses connected to cabinets when they are are within 2km of the exchange?

Must admit i have not asked that question to anyone...but fair point. Are you suggesting that the deployment of cabinets into areas being unbundled by other providers was coincidence or just good business sense on Telecom's part. And that deploying cabinets to other areas not being unbundled but with a similar line length issue should have always been a secondary consideration for them??

I understand business is business and that a "sensible"organisation does not let the competition simply cherry pick without fighting back, but the point i was wanting to make (and maybe with a little too much tounge in cheek) is that complaining/expressing dis-satisfaction about lack of unbundling in the market is not necessarily down to the unbundlers not doing enough.

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#327415 6-May-2010 15:38

Ragnor:
pressF1:

IIRC what happened was telecom rolled out cabinets to a number high density locations which did not necessarily need cabinets..

Telecom has to deliver 10Mbit/s to 20Mbit/s connections to 80% of New Zealanders by the end of 2011 as part of its government Operational Separation Undertakings.

Whether an area is high density doesn't matter, if your house is in a "high density" area but >2km in line wiring from the exchange then you are probably not going to be able get >10Mbit sync speed.

Cabinets are in fact required/neccesary.

Do you know of any examples of houses connected to cabinets when they are are within 2km of the exchange?

You have hit the nail on the head !!!!, this was the one of the major talking points, Telecom had a legal requirement to do this, they told everyone that had an interest in this at a technical briefing and explained it all in black and white, all this while the LLU debate was going on.... some couldn't see the wood for the trees I’m afraid.

So it came down to some wanted LLU so badly they didn't see that the LLU coverage areas would shrink as cabinets rolled out, basically stranding high cost investments, as the Telecom whole sale offerings will offer better speeds and a few LLU exchanges will fight amongst themselves for a smaller coverage area, was it a good commercial decision to go down the LLU path ... don't know have to ask the people that did it, but not many have had an aggressive rollout now do they ?, they all seem to be pretty quiet as well when they were advocating so strongly that unless there was LLU the country would just stop and they were going to jus tcover the country. Seem to remember some spokeswoman for a company (appeared to have few too many under the belt as well) going on TV saying that.

Business plans changed the day somone actually worked out what it actually meant.

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#327452 6-May-2010 17:05

pressF1:Must admit i have not asked that question to anyone...but fair point. Are you suggesting that the deployment of cabinets into areas being unbundled by other providers was coincidence or just good business sense on Telecom's part. And that deploying cabinets to other areas not being unbundled but with a similar line length issue should have always been a secondary consideration for them??

I understand business is business and that a "sensible"organisation does not let the competition simply cherry pick without fighting back, but the point i was wanting to make (and maybe with a little too much tounge in cheek) is that complaining/expressing dis-satisfaction about lack of unbundling in the market is not necessarily down to the unbundlers not doing enough.

You're completely ignoring the fact cabinetisation was only a shock to those providers who hadn't bothered to attend any of Telecom's meetings about this. Maverick made this point earlier on.

Telecom's planned rollout schedule for cabinetisation was also nothing secret and has always been publically available. If you are trying to find some sort of conspiracy here I think you might struggle to find any cold hard facts!

I'd actually make a point that I believe ULL carriers have (to en extent) been very unethical by signing up customers who they knew would ultimately move to cabinets. Mid point injection is an issue that affects the vast majority of ULL customers, it was an issue clearly pointed out by Telecom before the cabinetisation project even began and is something that can't be easily avoided.

TelstraClear won't connect anybody to their ULL equipment who will be cabinetisated, instead they will stay on a wholesale connection. If other providers had done this they wouldn't have to deal with the issues they've had to moving customers back from ULL to wholesale and which has also meant a price increase for many. I've heard reports of them putting the blame fair and square onto Telecom for this when they explain to the customer why things need to change, when ultimately the failing was their own.

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#327468 6-May-2010 17:35

sbiddle:
pressF1:Must admit i have not asked that question to anyone...but fair point.? Are you suggesting that the deployment of cabinets into areas being unbundled by other providers was coincidence or just good business sense on Telecom's part.? And that deploying cabinets to other areas not being unbundled but with a similar line length issue should have always been a secondary consideration for them??

I understand business is business and that a "sensible"organisation does not let the competition simply cherry pick without fighting back, but the point i was wanting to make (and maybe with a little too much tounge in cheek) is that complaining/expressing dis-satisfaction about lack of unbundling in the market is not necessarily down to the unbundlers not doing enough.

You're completely ignoring the fact cabinetisation was only a shock to those providers who hadn't bothered to attend any of Telecom's meetings about this. Maverick made this point earlier on.

Telecom's planned rollout schedule for cabinetisation was also nothing secret and?has always been publically?available. If you are trying to find some sort of conspiracy here I think you might struggle to find any cold hard facts!

I'd actually make a point that I believe ULL carriers have (to en extent) been very unethical by signing up customers who they knew would ultimately move to cabinets. Mid point injection is an issue that affects the vast majority of ULL customers, it was an issue clearly pointed out by Telecom before the cabinetisation project even began?and is something that can't be easily avoided.

TelstraClear won't connect anybody to their ULL equipment who will be cabinetisated, instead they will stay on a wholesale connection. If other providers had done this they wouldn't have to deal with the issues they've had to moving customers back from ULL to wholesale and which has also meant a price increase for many. I've heard reports of them putting the blame fair and square onto Telecom for this when they explain to the customer why things need to change, when ultimately the failing was their own.

And there we have the truth of the matter. Well put!

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#327470 6-May-2010 17:36

sbiddle:
pressF1:Must admit i have not asked that question to anyone...but fair point. Are you suggesting that the deployment of cabinets into areas being unbundled by other providers was coincidence or just good business sense on Telecom's part. And that deploying cabinets to other areas not being unbundled but with a similar line length issue should have always been a secondary consideration for them??

I understand business is business and that a "sensible"organisation does not let the competition simply cherry pick without fighting back, but the point i was wanting to make (and maybe with a little too much tounge in cheek) is that complaining/expressing dis-satisfaction about lack of unbundling in the market is not necessarily down to the unbundlers not doing enough.

You're completely ignoring the fact cabinetisation was only a shock to those providers who hadn't bothered to attend any of Telecom's meetings about this. Maverick made this point earlier on.

One correction here Steve.. They were all at the meetings !!!!, thats why it came as such a suprise when these same providors went off in the media blasting Telecom for ruining their LLU investment and it was a big conspiracy...

I remember the thread where I pointed this out...just can't find it

They were all there and sorry to say they just didn't get it , I'm guessing the wrong people were there and didn't understand what the remifications were or passed the information back to the right people so it looks like they had based their LLU business models with out understanding what Telecom laid out for them, then cried foul when they finally got it....

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#327478 6-May-2010 17:56

Argh found the discussion from 2007

http://www.geekzone.co.nz/forums.asp?forumid=39&topicid=17333&page_no=3

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