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freitasm

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#57617 19-Feb-2010 09:13
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Just released from the Commerce Commission:


The Commerce Commission today commenced a review of the cost of data transmission in the unbundled bitstream access (UBA) standard terms determination.

“The Commission indicated when it released the UBA Determination in December 2007 that it may review the cost of data transmission every year, or as required, and update the figure used in the price calculation if necessary.  It is now appropriate to undertake such a review,” said Telecommunications Commissioner Dr Ross Patterson.

To inform the review the Commission has today commenced seeking information from access seekers and access providers to assist in the calculation of national and international data costs. The letter sent to access seekers and access providers will be available on the Commission’s website under www.comcom.govt.nz under Industry Regulation/Telecommunications/Standard Terms Determinations/Unbundled bitstream service Background Unbundled bitstream access.

The unbundled bitstream access refers to the wholesale broadband service provided by Telecom from the end-user to the first data switch, or equivalent facility, other than a Digital Subscriber Line Access Multiplexer (DSLAM). It allows telecommunications companies to supply a range of broadband services to retail customers.  

Section 30R Review process under the Telecommunications Act 2001 (Act) Section 30R provides that the Commission may, on its own initiative, commence a review, at any time, of all or any of the terms specified in a standard terms determination. Guidelines to the process for reviewing standard terms determinations can be found on the Commission’s website www.comcom.govt.nz under Industry Regulation/Telecommunications/Standard Terms Determinations/Making and Reviewing STDS




 

 

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SepticSceptic
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  #300368 19-Feb-2010 13:20
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Would be nice for some downward pressure on the price. A colleague across the ditch gets Naked DSL, + 10 gigs allowance + Free VOIP phone.

AU$39.95 month

Nearly double that over here. Yeah, I know economies of scale, but sure as heck many populated parts of Oz have pretty close to the same housing density - they still need to put in a cabinet to service X number of consumers Y kilometers from the cabinet.




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sbiddle
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  #300387 19-Feb-2010 14:11
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That's a good deal, most are around AU$50 per month for ~10GB and VoIP (I was looking for a friend the other day)

That's NZ$64 when converted and you can get 10GB on TCL cable for $54.95 per month and VoIP for another ~$10 per month so there isn't really a big difference on some plans.

The real problem is that the Commerce Commission tell Telecom they are allowed to raise line prices by the CPI every year. This in effect means the cost of a naked circuit is always compared to the cost of a PSTN in many comparisions.


 
 
 
 


SepticSceptic
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  #300403 19-Feb-2010 14:33
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My colleague is using MyNetFone - http://www.mynetfone.com.au/




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Ragnor
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  #300419 19-Feb-2010 15:18
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Are they reviewing their sub loop unbundling decision, because that was a horrible determination/decision.

sbiddle
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  #300422 19-Feb-2010 15:27
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SepticSceptic: My colleague is using MyNetFone - http://www.mynetfone.com.au/


MNF have awesome pricing, you can even get an account with free DDI with a few of their deals!


sbiddle
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  #300426 19-Feb-2010 15:30
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Ragnor: Are they reviewing their sub loop unbundling decision, because that was a horrible determination/decision.


People keep complaining about it and I agree that the pricing particularly for backhaul is escessive compared to other fibre offerings in the market but people have to remember that every provider using a cabinet has to pay costs including Telecom. The network is run by Chorus, not Telecom.

ISP's may choke at the cost of installing their own equipment and paying backhaul costs but Telecom are paying those exact same costs.

ariosto
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  #300460 19-Feb-2010 16:48
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sbiddle: ISP's may choke at the cost of installing their own equipment and paying backhaul costs but Telecom are paying those exact same costs.


True, but Telecom has two things in its favour that most other ISPs don't: economies of scale with equipment supply and installation, and a working understanding of how to integrate equipment into exchanges.  It's an absolute nightmare to try building this stuff up from scratch, and certainly not cheap.

It's going to be another few years before the ISPs that are playing along start to benefit from their investment to the same degree that Telecom currently does. 

 
 
 
 


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  #300466 19-Feb-2010 17:11
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ariosto:
sbiddle: ISP's may choke at the cost of installing their own equipment and paying backhaul costs but Telecom are paying those exact same costs.


True, but Telecom has two things in its favour that most other ISPs don't: economies of scale with equipment supply and installation, and a working understanding of how to integrate equipment into exchanges.  It's an absolute nightmare to try building this stuff up from scratch, and certainly not cheap.
 


The simple reason that will sub loop unbundling is pricing and custumer numbers. Telecom have advantages since they have $$ and have the largest share of customers. There isn't anything stopping anybody else from assuming

Remember each cabinet only service ~300 households. If you're an ISP who's going to have to spend tens of thousands of $ installing equipment in a cabinet and only have 10 of those customers there is simply no business case for doing so.

What will be interesting is if another telco decides they will take the gamble, deploy gear in cabinets and then wholesale the service. You could then potentially have two companies wholesaling services.


raytaylor
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  #300494 20-Feb-2010 10:59
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What will be interesting is if another telco decides they will take the gamble, deploy gear in cabinets and then wholesale the service. You could then potentially have two companies wholesaling services.



Vodafone already do this with their Red network. They wholesale to slingshot for their Next Big Thing network.




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sbiddle
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  #300501 20-Feb-2010 11:51
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raytaylor:

What will be interesting is if another telco decides they will take the gamble, deploy gear in cabinets and then wholesale the service. You could then potentially have two companies wholesaling services.



Vodafone already do this with their Red network. They wholesale to slingshot for their Next Big Thing network.


But that's not subloop though.

The reality is that all ISP's and telco's who have deployed gear only in exchanges don't exactly have rock solid business plans. Many have unfortunately discovered selling ULL services to customers who were going to be cabinetised was a bad move as midpoint injection issues have mean moving a lot back to wholesale services.




Ragnor
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  #300547 20-Feb-2010 17:34
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sbiddle: 

People keep complaining about it and I agree that the pricing particularly for backhaul is escessive compared to other fibre offerings in the market but people have to remember that every provider using a cabinet has to pay costs including Telecom. The network is run by Chorus, not Telecom.

ISP's may choke at the cost of installing their own equipment and paying backhaul costs but Telecom are paying those exact same costs.


Yes I was referring to the backhaul pricing/requirements.

Sure Telecom Retail has to pay Chorus (and Telecom Wholesale?) the same price as other ISP's would have to pay... however I doubt the Telecom group cares about the high cost on the retail balance sheet when it's going straight onto Wholesale's and Chorus' balance sheet.  


Isn't it a net gain for them given less competition in cabinets?

Chorus/Wholesale/ComCom have priced every other ISP out of the sub loop unbundling market, how is that a good outcome for competition?


I don't want to wail on Telecom too much as I have a positive opinion of how they are operating these days.. but the change in behavior was largely brought about by government regulation (structural separation) and LLU competition. 

sbiddle
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  #300566 20-Feb-2010 18:31
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The problem isn't the price. It's the fact you would have a large number of ISP's fighting over 300 customers. Unless you can get ~30% + of these you simply aren't going to make money.

If the costs of subloop access were ~50% of what they are now I doubt we would see significantly more competition. Deploying a DSLAM/ISAM doesn't come cheaply especially if you have 10% of the market and would be serving 30 customers. The numbers simply don't stack up.

Wholesale services are and will be a key component going forward.

Ragnor
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  #300725 21-Feb-2010 15:25
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Correct me if I'm wrong but....


Under the sub loop rules the backhaul cost charged to a provider is shared like this:
  $3-6k (depending on total customers in the cabinet) / number of providers in the cabinet

Shouldn't the cost to the provider really be something like: 
  ( $3-6k / number of customers in the cabinet ) * number customers in the cabinet with provider x

I believe Telstra, Orcon and Vodafone aren't finding the one off fixed installation cost for the hardware the problem but rather this backhaul pricing sharing above. 





NonprayingMantis
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  #300746 21-Feb-2010 16:38
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Ragnor:
sbiddle: 

People keep complaining about it and I agree that the pricing particularly for backhaul is escessive compared to other fibre offerings in the market but people have to remember that every provider using a cabinet has to pay costs including Telecom. The network is run by Chorus, not Telecom.

ISP's may choke at the cost of installing their own equipment and paying backhaul costs but Telecom are paying those exact same costs.


Yes I was referring to the backhaul pricing/requirements.

Sure Telecom Retail has to pay Chorus (and Telecom Wholesale?) the same price as other ISP's would have to pay... however I doubt the Telecom group cares about the high cost on the retail balance sheet when it's going straight onto Wholesale's and Chorus' balance sheet.  

 


first up, it hits the P&L, not balance sheet.


secondly,  yes they do care.  Retail must be make a profit or it will prove to the government that the wholsale price is set too high for competition to work, which means more regulation for Telecom - something they definitley don't want. 

eXDee
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  #300770 21-Feb-2010 18:47
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I hope they investigate mobile data too.
Hopefully the end result is lower prices/more data at the end overall.

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