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Topic # 10196 9-Nov-2006 19:19
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(freitasm consider it) Done.

Ok, now how about everyone in this thread agrees to one simple thing, sticking to the facts and not say stuff like 'Once again... stupid, stupid, stupid.' in part because it just gets everyone frustrated, but mostly because it doesn't actually contribute to the logic of the discussion.

I will also keep my judgments of Telecom out of it, but I will say that the vast majority of the public, the government and international broadband experts hold Telecom (and in part the governments previous inaction, actually politicians are the first to blame themselves) to blame for our poor broadband, I recognize that most likely replies will come from people who I have never seen do anything but defend Telecom on every issue so it is best to keep views of Telecom out of this.

What this thread is here to discuss is the Sothern Cross Cable which is owned by the Sothern Cross Cable Network (which I note has a brand new website) and primarily the response I got to my claim that in effect Telecom doesn't pay a dime for International traffic it passes over the cable because it gets more (assets in whichever form) from the cable it 50% owns (but uses less than 50%) than it pays.

No one has offered a rebuttle as to how it doesn't infact get more back than it puts in.

As the reply I got to that was to riddicule (but not refute any of the things I stated or show how my reasoning is at fault) I conceeded that because you could argue that Telecom would make more money from the cable if it shut down it's internet offerings and stopped using the cable so maybe I can't count all of the money it makes from the cable, however because the cable is not used to capacity, at the very least I can solidly argue that Telecom get back 50% (in some form) of what they pay to the Sothern Cross Cable Network.

Also the SCC's (I believe CEO) is an ex-Telecom manager and as they own 50% I bet they pretty much get their way.

So without resorting to insults, sticking to just the facts and logic please explain why I am mistaken.
Insulting me is not as an effective way to get your opinion across as it may appear but thus far it seems the only reply you have.

Also I'd invite each person replying to state what if anything they blame Telecom for.

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Reply # 51771 9-Nov-2006 19:25
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antigrav: What this thread is here to discuss is the Sothern Cross Cable which is owned by the Sothern Cross Cable Network (which I note has a brand new website) and primarily the response I got to my claim that in effect Telecom doesn't pay a dime for International traffic it passes over the cable because it gets more (assets in whichever form) from the cable it 50% owns (but uses less than 50%) than it pays.


I consider the SCC a medium to provide traffic to data. It's only one of the variables. I understand that the data being carried itself is not provided by SCC, but by other providers, who charge for this.

So this is where I start disbelieving that Telecom could possibly get away with no costs simply because they have a high share of the SCC. Even if they do, the any ISP using the SCC services still have to pay for the data itself.

Then there are the maintenance costs, engineering, management, support to companies utilising the cable, and other associated costs.


Seeing that Telecom does not have much of a representation on this site (the few Telecom NZ employees posting here do so on a personal basis and no one is here on behalf of Telecom) I think it will be really hard to find some facts, if not all of them.

But let's see if something comes out of this...





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Reply # 51773 9-Nov-2006 19:33
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antigrav:
  • I will also keep my judgments of Telecom out of it
  • I will say that the vast majority of the public, the government and international broadband experts hold Telecom (snip) to blame for our poor broadband
  • it is best to keep views of Telecom out of this.
  • Telecom doesn't pay a dime for International traffic it passes over the cable
  • I conceeded that because you could argue that Telecom would make more money from the cable if it shut down it's internet offerings and stopped using the cable so maybe I can't count all of the money it makes from the cable,
  • however because the cable is not used to capacity, at the very least I can solidly argue that Telecom get back 50% (in some form) of what they pay to the Sothern Cross Cable Network.
  • Also the SCC's (I believe CEO) is an ex-Telecom manager and as they own 50% I bet they pretty much get their way.
  • Also I'd invite each person replying to state what if anything they blame Telecom for.

Id say the thread might be doomed to faliure already. I am not sure what you want to hear about at all.

You say 'keep views of Telecom out of this' but the first post is full of you making statements about your views of Telecom, and asking people for their views of Telecoms wrongdoings.




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Master Geek
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  Reply # 51783 9-Nov-2006 20:09
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freitasm:

antigrav: What this thread is here to discuss is the Sothern Cross Cable which is owned by the Sothern Cross Cable Network (which I note has a brand new website) and primarily the response I got to my claim that in effect Telecom doesn't pay a dime for International traffic it passes over the cable because it gets more (assets in whichever form) from the cable it 50% owns (but uses less than 50%) than it pays.


I consider the SCC a medium to provide traffic to data.
I have a feeling that's the last thing we will both agree on ;)
It's only one of the variables. I understand that the data being carried itself is not provided by SCC
No, the data it's self is provided by the server or user on the other side of the cable, and the user and server on this side for uploaded data
, but by other providers, who charge for this.

The server or user at the other end pays money for part of the trip too of course, where these costs meet I don't know, nor clearly do you. (Probably related to those peering exchanges)

I would note however that this cost is pretty small compared to the data charges over here. The data charges there, whatever they are is low enough to allow flat rate connections even up to Gbit connections for reasonible monthly fees in pretty much every country in the world


So this is where I start disbelieving that Telecom could possibly get away with no costs simply because they have a high share of the SCC.
'This is where I start disbelieving'? I take it then you disagree with the views of the other posters to my previous thread who thought it was so far out as to be riddiculed?

May I ask you for your guesstimate of what percentage of the SCC Telecom uses?

20 million people in Australia, and Telecom owns or did own AAPT or AAAPT or some Telecomunication company over there it ruined. (maybe without a monopoly and the government on it's side it really isn't up to much?)

4 million people in New Zealand. (of which NZ has what % of the internet connections DSL and otherwise)

To do this right you'd need to look at lots and lots of figures but lets just propose that 25% of the Data used is used by Telecom.

This would mean that as it gets 50% of all money paid to the SCC it would be getting double the money back that it pays. (moere if it manages to stiffle it's users)

Even if they do, the any ISP using the SCC services still have to pay for the data itself.

Yes, Actually Xtra isn't an ISP, Telecom says so.

Telecom and other NZ and Australian serviceproviders pay the SCC (SCCN).

Not sure what you point is here, I stated that they pay the SCC, but in some form (for simplicity we'll assume it's cash) they get the money back.


Then there are the maintenance costs
Yes, but I'm quite sure that even if the maintenance costs lookblarge compared to your weekly food bill, that considering the many billions it charges it's totally forgettible, prove me wrong
, engineering
eh? It's already built and paid for, you just looking for things to add to a list to make it seem impressive
, management,
Yes, think of the help desk staff, billing, debit collection issues they must have deating will millions of people, the rent on building in every city in NZ and AU... wait, they supply big business, hell I could run all the day to day managment, even if again they manage to spend a bit it's nothing to what they rake in, go ahead and prove otherwise by finding all the details of their tax returns or something
in support to companies utilising the cable, and other associated costs.
If they have a pet as a mascot at the office there is food, vet bills (do you know how much that can cost!) and flea treatment etc... (though from what I'd gather from their old website their most likely pets were some dead looking goldfish, oh and the old site anyway showed that until recently all the money wasn't goig into making attractive websites ;)

Fact is it doesn't matter a thing what their expenses are because we know they were enough to make 1.3 billion in, I don't know what time frame admittedly, so they are making money and that money goes to it's shareholders, and to my mind obviously that would mean they pay Telecom more than Telecom pays them since even 25% usage seemed generious.


Seeing that Telecom does not have much of a representation on this site (the few Telecom NZ employees posting here do so on a personal basis and no one is here on behalf of Telecom) I think it will be really hard to find some facts, if not all of them.

But let's see if something comes out of this...


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  Reply # 51787 9-Nov-2006 20:17
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All right, I'll bite... (deep breath...)

Sure, Telecom may make a net profit out of the cable, but surely you can't take that as meaning they "don't pay a dime for international traffic". I'd fully expect they're totally unrelated from an operational point of view (TNZL would have to pay for international bandwidth whether or not TCNZ co-owned SCC, and TCNZ would get a return on SCC whether or not TNZL used bandwidth on it.) I can't imagine they see any relationship when they come to balance the books.

Another way of looking at it is you're trying to say their broadband network doesn't cost anything because it earns a net profit. Or my term deposit at the bank (if I had one) is free because in a year's time I'll get $110 back for the $100 I gave them at the beginning.

Maybe you just need to say Telecom (Corporation rather than Limited) makes a net profit out of the cable (and leave the financial wizardry to the bean counters).




 

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Reply # 51789 9-Nov-2006 20:22
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antigrav: I would note however that this cost is pretty small compared to the data charges over here. The data charges there, whatever they are is low enough to allow flat rate connections even up to Gbit connections for reasonible monthly fees in pretty much every country in the world


Got links?



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  Reply # 51799 9-Nov-2006 22:05
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A little bit of research (straight from their website) shows that:

The sothern cross cable was in profit before laying way finished! by .3 Billion in August '00 (They sold capacity before it was finished, actually a few months later it was finished and it was only 20Gbit, it has expanded the max. possible data from 120Gbit to 480Gbit thanks to advances in technology, this is free BW they gained effectivly.
The capacity of it is 480Gbit, actually due to advances in laser technology it is possible it may be able to do more, anyway less that 240Gbit is currently active the rest waiting to be activated, not currently any demand!

I have heard (from a contact) that it is only part of Telecom's international capacity, attarently it (TCOM) has 600+ (it was something like 620, 680 or so) Gbit. (No I don't know what the rest of it is, nor how much of the SCC he was counting as Telecoms)
This is forgetting the AU to JP cable which could be paired (and may be?) to pipes in Japan, I forget how many Gbit at this moment but I think it's more than SCC.

Telecom does indeed profit share, and it pays the same everyone else pays to SCCN, half of the profit of which is directly profitshared back into Telecoms pockets.

Telecom owns the controling share and the CEO is ex-Telecom, if they wanted they could decide too do some deal so that the cable is better utilized whithout reducing their profits, but why the hell would they do that?


If the following offends anyone that has used these excuses I appologize, offending is not my intent:

But hey, we are small, and a long way away, and it's expensive, we have to suck it's not our fault it's circumstance...

Sorry I just don't think these excuses are anything but excuses.



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  Reply # 51803 9-Nov-2006 22:31
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JAMMAN2110:
antigrav: I would note however that this cost is pretty small compared to the data charges over here. The data charges there, whatever they are is low enough to allow flat rate connections even up to Gbit connections for reasonible monthly fees in pretty much every country in the world


Got links?


To what? international flat rate plans?
international Gbit plans?

Well not really for either but the first is obvious, the second is true in HK and france at the very least... (though international data isn't at Gbit speeds generally ;) and that is one of the few times I think it's really understandible)

BTW according to New Zealand Next Gen Internet a really thin cable (I forget and are not going to visit the site again to check it out) has enough data capacity to transfer an individual video stream for every person on earth.)

Now obviously New Zealand would never need that much data, but even if you take into account future growth, and Australia, and the fact that it might have required an impractical level of technology it is obviously possible to get more than enough speed for Australasia (I hate that term for obvious reasons) from a single cable laying exersite.

Again if your going to refute or disagree I welcome an intelligent debate, not one line zingers like 'What are you smoking' or 'I will not honor your (respectful data filled logical argument which appears to be without any real flaw) with a response you Troll'.
Let's keep to reason and Logic thanks.

Also if your not just blindly pro Telecom I will invite you tell me what you think they are doing wrong, thus far no one has taken me up on this offer and I suspect that you are blindly opposing anything critical of Telecom out of habit, please prove me wrong.
Telecom have done some things right, and the givernment, other ISP's (though it's difficult to be too hard on them since Telecom is a pretty intimidating monopoly, and most ISP's working against it have been too small to do much, and that goes for saturn/telstra/clear...
Yes the public is also in part to blame.

So do you accept that Telecom is in part to blame?
And for those that think that the rest of the world with their super fast broadband that we are jelious of got it wrong with unbundling (looking after the rights of multi billion dollar profit per year companies because they don't have any power of their owm ;) ) what do you think should have been done back in may if not unbundlr for better internet? if the government got it wrong what should it have done to change things, or do you view it doesn't needc change things are great as they are?

BTW if you guys stopped defending Telecom then it wouldn't be an argument, it would just be frustrated people venting and talking about something on their minds
What you resists persists.



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Reply # 51805 9-Nov-2006 22:51
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Telecom has impact on the current deficiency in infrastructure? Certainly.

Is the SCC the Holy Grail? Hardly. Why the debate? Because somewhere behind we argued that there can't be unlimited data at low price as some people asked for (hey, someone suggested unlimited data for $29.95/month) and you started this crusade to show that the argument of "New Zealand being isolated and therefore data traffic costs can be justified" is not valid.

Now, while we can agree the cable is paid for, there are other costs, including operation, engineering, support to maintain this cable(s) in an operational state.

On top of this each ISP contracts with a carrier for the data to be supplied. Data is not free transit from one server to the client. ISPs pay for this data to be available at their point in San Jose or wherever else, to be injected into the SCC.

So, when you point out that just because Telecom has 50% of the cable, and it shouldn't charge that much because it's getting the money back you forget that each individual ISP pay a different provider for this data, you forget that the money paid to SCC incurs tax, you forget that this has to transit through our national infrastructure.

What problem are we trying to discuss here?

- Bad performance of "unleashed" plans (due to national infrastructure, not international traffic)?
- General lack of nationwide alternatives to the DSL/copper infrastructure (options exist, including WiMax, WCDMA TDD (Woosh), cable, sattelite, CDMA and WCDMA in extreme cases)?

So what I see is that pinpointing the whole affair to the fact that Telecom owns 50% of the SCC as being the cause of all ills in the country Internet infrastructure is not considering other factors.

Now why you have got so many bad responses? Because in every thread you participated before we had to lock the thread, with so many off topic postings. That's why I asked you to create this thread and make it focused.








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  Reply # 51813 10-Nov-2006 00:14
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freitasm:

Telecom has impact on the current deficiency in infrastructure? Certainly.

Is the SCC the Holy Grail? Hardly. Why the debate?

No of course it isn't, though it is an important integral part of broadband and the main reason that New Zealand is said not to have any true unlimited plans for any widespread service barring thr restricted in peak only plan from Woosh and the 'kind of unlimited if you can find a use for it that won't be heavily throttled)' Go Large Plan.

The debate is because someone was asking about Telstra unlimited plans, only to be jumped on by a lot of people who gleefully point out some bogus and one sides facts as to why New Zealand can't and shouldn't be unlimited.

I offered a counter argument and was set on by the same people even being banned in the channel despite not saying anything in the chan when i was banned and not saying anything offensive.

It seems that the information and point of view I and many others hold isn't welcome here and I have been told such by you, good chance I will be banned for this message.

And oh, you asked me to.

Because somewhere behind we argued that there can't be unlimited data at low price as some people asked for (hey, someone suggested unlimited data for $29.95/month) and you started this crusade
crusade? really? Just replying and giving some fact, does 'crusade' mean you think I'm winning, or out to get you? Sounds impressive anyway (sorry for taking the piss, but hey I've been taking plenty of sh1t, honestly I was wanting that to be an appology but my wit has the better of me)
to show that the argument of "New Zealand being isolated and therefore data traffic costs can be justified" is not valid.


Now, while we can agree the cable is paid for, there are other costs, including operation, engineering, support to maintain this cable(s) in an operational state.

I think you'll find this is where we disagree, I am of the opinion that the cost of those things is peanuts either in an absolute sense or in a relative sense at the very least, furthermore there really isn't an increase to those costs by opening up the pipe a bit more and it has a long way to open.


On top of this each ISP contracts with a carrier for the data to be supplied. Data is not free transit from one server to the client. ISPs pay for this data to be available at their point in San Jose or wherever else, to be injected into the SCC.
Yes but all those ISP's offering 100mbit for $29.95 uncapped are also paying those charges.


So, when you point out that just because Telecom has 50% of the cable, and it shouldn't charge that much because it's getting the money back you forget that each individual ISP pay a different provider for this data, you forget that the money paid to SCC incurs tax, you forget that this has to transit through our national infrastructure.
No I haven't, but again those costs are super rediculious and crappy and Telecom owned.


What problem are we trying to discuss here?
In the general sense the problem of New Zealands crappy internet, that it doesn't have to be that way and that Telecom is the main fault in the system, in the more specific sense that the reason Telecom can't provide unlimited data is not because of the SCC as claimed, or at least that's what I'm saying.

As far as I can tell your stance is that New Zealand can't and shouldn't have unlimited because, well without the SCC it seems to be just 'running as ISP costs money' but as this now removes anything special about New Zealand you can't explain why we have bad broadband without blaming Telecom which clearly you loathe to do.



- Bad performance of "unleashed" plans (due to national infrastructure, not international traffic)?
Sure, well who's fault is that largely? Well you could point the finger at anyone with deep pockets but it's Telecoms network...

- General lack of nationwide alternatives to the DSL/copper infrastructure (options exist, including WiMax, WCDMA TDD (Woosh), cable, sattelite, CDMA and WCDMA in extreme cases)?
and Fibre too unless that was covered in one of those fancy exotic acronyms, this is largely Telecom's fault because it hasn't been for apparent lack of trying, but Telecom is able to match prices in specific areas, or was allowed to...



So what I see is that pinpointing the whole affair to the fact that Telecom owns 50% of the SCC as being the cause of all ills in the country Internet infrastructure is not considering other factors.
I couldn't agree more, Telecom has crappy national infrastructure, anticompetitive monopolistic habbits and controls the last mile, still I was directly replying to claims that the SCC is the problem when it isn't.

Also another thing, New Zealand had an advantage, considering our size we have a great shape for building good national networks, the country is long and thin with places being connected by pretty much straight lines, compare this to the the US which is wide and has places dotted all over it that need good connections.

It must be that Telecom has been one of the few telecomunication companies to do poorly so it couldn't afford to, well no the reverse is the case.


Maybe the public didn't really take to the internet, anyone care to look at the dialup figures we had, we were leading the world despite crappy per hour charges till ihug.

Maybe there are some challenges to giving NZ good fast broadband but I'm sure you never look at our advantages.

Now why you have got so many bad responses? Because in every thread you participated before we had to lock the thread, with so many off topic postings. That's why I asked you to create this thread and make it focused.

Ok, well IMO what I was saying was related very closely, but ok.

In none of the cases however did I just start saying 'New Zealand should have good broadband because the SCC is owned bt Telecom' when people were busy talking about elephants, it was always the case that in a thread about people unsatisfed with speeds, limits etc... a bunch of people jumped on them giving all sorts of half thuths as to why it's not Teleecoms fault, it's because of some bogus New Zealand sucks syndrome, and when I offer alternative facts and an alternative POV everyone attacks me, it's 5 on one and the attacks are personal...

Fact is it doesn't need to suck, when I then give a solution such as FTTP being afforible you shoot it down seemingly in complete ignorance of the document I gave you showing actual breakdown of costs of this being done for real.


You don't seem to want solutions, hope that it can get better, identification of where the problems lie, you have yet to indicate that you think Telecom has any fault and while you attack unbundling you don't suggest an alternative.

 


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  Reply # 51820 10-Nov-2006 08:11
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On the national infrastructure topic, my whole point against unbundling is "why does it have to be Telecom?". Since you cite FTTH, I ask again "why does it have to be Telecom?".

Being a new technology and not related to copper (in the last mile sense), why do we have to wait for Telecom to do it? What about Citylink, doing already a good job in Wellington and going into Auckland now?

Why do ISPs cry to use copper, and whatever Telecom brings in the future, but they can't cry for the rights of doing their own, through an association or a new company they fund?

Why other companies are not investing in the infrastructure? Is it because it's easier to lobby the government to get rights to use the last mile put in place by another company, using old technology?

Companies like NZWireless (WiMax in Wellington), Woosh (WCDMA TDD in Wellington and Christchurch), Vodafone NZ (HSDPA nationwide), TelstraClear (HSDPA trial in Tauranga, roam on Vodafone NZ later?) and even Telecom New Zealand (CDMA EVDO Rev 0 and Rev A nationwide) should be looked after - they are liberating people from the last mile infrastructure that's costly to deploy.

Even when we talk about cables, Citylink (fiber in Wellington and Auckland) or TelstraClear (cable in Wellington, Christchurch) offer great alternatives.

Some of these alternatives are more interesting to consumers (Woosh, NZWireless and TelstraClear) while other are great for businesses (Citylink, Vodafone, Telecom New Zealand).

Alas, all rely in the national infrastructure to move data from one side to another within the country.

So the whole problem was attacked as "give access to all", but the government, lobbyist and even Telecom did not work in the infrastructure.

So, how can we have unlimited Internet access if this makes the whole thing melt, is not cost effective yet to deploy since we are tied to the old copper?

This is the problem we have to have solved.

I am not defending Telecom. I am saying that we shouldn't even have to worry about Telecom and go directly to an alternative. Not as today, where an alternative is "Ihug service + Telecom line", or "Slingshot service + Telecom line". Or "Paradise service + Telecom line". Where is the innovation here?

Got my point yet? I am not pro Telecom, they are running a business. I am against the other companies who don't move and do anything but to cry for access. There are investments for networks planned and announced (Orcon and others), but why not have these in progress before? Or, and by the way, investments in hardware to place inside exchanges and cabinets is not really infrastructure and new network, right?

I am Telecom free at home, where we use TelstraClear. I use Vodafone for my voice communications, and data. I do have a Telecom mobile account, so I can test the mobile devices I have here and comment on both Telecom and Vodafone offerings.







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  Reply # 51830 10-Nov-2006 10:14
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Fibre is a great solution indeed, but I think it's an issue of immediacy. (sp?)
Unbundling copper can for next to no cost bring 100mbit to most better populated areas where is it worth while putting DSLAM's closer to the home.
Also technically Fibre is an older technology than adsl I believe and certainly far far older than VDSL.

As for the idea of having an association or company they fund I agree they should all put money in a pool, along with the public and maybe even the government and work out some way to roll fibre out everywhere, and with the public and governmental input not charge the earth for access since once the money has been made back. (If an ISP doesn't put money in it loses the right charge the customer)

But even if you accept the cost workups in the document I mentioned earlier it is still a lot of money no matter how fast it may pay for it's self, there needs to be vision, unification, planning and deep pockets.

(BTW Woosh has lots of service over Auckland.)

And I agree they should be looked after.
Infact I propose that we start a new site and organization dedicated to bringing together everything needed to build a national fibre network.
Get the ISP's on board, the public on board, try and get the government on board, work up some plans, some facts and figures, work with New Zealand www.ngi-nz.co.nz although they don't seem focused on bringing fibre to the public any time soon. We should make it an open meeting place and framework for everyone.
Even if it just insipres debate and discussion it would be well worth it.

Could be a bit of fun, no reason it shouldn't lead to something even if it is just the push of Telecom or some other Telecomunication company to wire up NZ before we do so as to make more $.

So who is in? Who is actually willing to do something?

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  Reply # 51908 10-Nov-2006 17:39
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To answer the original question about Telecom getting more out of the Southern Cross Cable then they put in, your correct, but your question is flawed.



It's like you saying you get more back from the shares you have in your power company than you spend in Books.



The SCC is a seperate company with many different shareholders, Telecom decided as the local communications monopoly that it would be wise to own shares in the biggest connection out of New Zealand. In business terms, it's called Vertical Integration, owning all the things you need to make your product.



For example, if Bob's Coffee company was to be vertically integrated they would buy a bean farm, and a physical retail shop, and a dam to provide water, and a power plant for power etc. This means that their biggests costs, while they still pay, and appear on the books, at the end of the year contribute to the Bob's Coffee Group of Companies profits.



Now, Bob's Coffee (Telecom) company grows at a huge rate, and is now the beangrowers biggest client (SCC.)



The bean company (SCC) still has the overheads of growing beans, which remain the same no matter who owns them, but their profits at the end of the year end up going to Bob's Coffee group of companies.



Your question I think is that since Telecom (Bob's Coffee Company) own shares in SCC (Beangrowers) the SCC gives them traffic for free.



The SCC Can't simply not charge, or not charge market prices for their products because of of two reasons - The other shareholders would not allow SCC to 'give' away their money, they have invested in SCC to make money, they want the best return they can. Second is that it still costs SCC money to provide this service, so they need to cover these costs.



What happens is that SCC charges Telecom what the standard price is for x/bandwidth/month per their ratecard/pricing book, and at the end of the year Telecom get money back from SCC in share divenend payouts. On a good year it will be a lot of money, on a crap year not so much.



Does this equal more than Telecom pay in charges to SCC, perhaps - but they still had to invest billions of dollars in SCC to get those shares. Companies and people expect to get a return on investment.



How much money would Telecom make if they sold their shares in SCC and put it in the bank? Probably more than Xtra pay to SCC a year.



How much money would Telecom make if the took that money and brought The Warehouse?



So, in answer to what I think your actual question is - no SCC arn't doing any 'freebee's to Telecom, but yes Telecom having invested billions in SCC probably are getting more money back than they put in.



This doesn't actually give Xtra an advantage in the market, as Telecom still had spend billions to buy shares in SCC.



For our example with Bob's Coffee Company, Bob doesn't get 'free' beans from the beangrowers as they still cost money to produce, and if the beancompany did 'give' them away the beangrowers would make less money, and then Bob would get less money from them at the end of the year from dividends.



So, Bob ends up making the same amount of money.



It still makes sense for Bob (Telecom) to own parts or all of it's Suppliers because it does get a seat at the boardroom table, and one of Bob's biggest costs, beans, it's other company is making money on, so even though it's biggest cost is still there, the 10% that the beangrowers make in profit, Bob eventually gets back.



ISP's pay about $1/user/month for bandwidth per Broadband connection (USA Statistics)





This will all be moot anyways with http://www.stuff.co.nz/stuff/0,2106,3855776a13,00.html

[Moderator edit (JF): URL Hyperlinked]




Tyler - Parnell Geek - iPhone 3G - Lenovo X301 - Kaseya - Great Western Steak House, these are some of my favourite things.



68 posts

Master Geek
Inactive user


  Reply # 51943 11-Nov-2006 00:12
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Some stuff taken from the history page of their site:
Telecom New Zealand and Optus engage in discussions with a variety of carriers in Australasia and the United States to gauge support for a new trans-Pacific cable.

1997

July: Telecom New Zealand, Optus and MFS Globenet (subsequently taken over by WorldCom) agree to sponsor the Southern Cross project.

They then presold the Bandwidth, they presold almost half of the total cost of the project before they started to build it.
They borrowed the money for construction of the cable from 3 Banks.

Before they had is completed they had raised 1.6 billion in sales, .3 billion more than they borrowed to construct it.

It has been fully paid off and is in profit.

The three owners are TNZ (50%), Optus (40%) and MCI, now Verizon, (10%) (as it cost 1.3 Billion to build then Telecom's costs (already raised in sales) is $750 million or so.)

The money made by the SCC is profit shared, obviously Telecom gets 50%, as it obviously is not using 50% of the bandwidth it is getting more money from the SCCN that it pays, and furthermore as it gets 50% of what everone pays the SCCN (not accounting for operation costs) it also gets 50% of everything it pays the SCCN so even if you think it's unfair for me to subtract all it's profit from it's cost, at the very leat it is fair to subtract it's own profit from it's own cost.

So my point is that international bandwidth is not expensive, it does not limit Telecom from offering as many flat rate plans as it likes and even moreso since the SCCN is drastically underutilized, it's at well under 50% and as Telecom not only has the controlling stake but also has an ex Telecom manager running it they can obviously change the prices if they see fit.

My point is that data charges simply aren't stopping Telecom from offering high speed unlimited data up and down which is what others were arguing.

Your $1 statistic is pretty neat and telling, in effect what it costs Telecom is next to nothing.


The cost of the cable divided by the number of people it serves also
makes the cables cost seem small, as does the fact it was in profit
before it was even completed.


International bandwidth isn't expensive! At
least it doesn't have to be, and it isn't for Telecom. (And if there
were some binary usenet servers, and ISP's with cache logic then
international data could be further reduced)

Plus with modern Fibre technology you can put 6 Billion video channels down a cable the thickness of my little finger. (approx.)

Of course I was never saying that the SCCN didn't charge Telecom, just in total it didn't cost Telecom anything due to shrewed business dealings.


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