InternetNZ discussion paper on data caps in New Zealand

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freitasm

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Topic # 87728 5-Aug-2011 09:43

Just received:

InternetNZ publishes discussion paper on data caps

InternetNZ (Internet New Zealand Inc) has published a discussion paper on Barriers to Unmetered Domestic Internet Traffic. InternetNZ is seeking comments by 26 August on the paper as well as views on what goals can be set in the area of data caps.

The discussion paper is available online at http://internetnz.net.nz/our-work/Access/Data-caps or directly as a PDF from http://internetnz.net.nz/sites/default/files/workstreams/barriers_to_domestic_unmetered_internet.pdf.

InternetNZ Chief Executive Vikram Kumar says “There has been a lot of discussion about monthly limits of Internet usage (data caps) that are typical in New Zealand. This discussion has been both internal within InternetNZ as well as in a number of public forums.

“The discussion has been about the low levels of data caps at present as well as the future shift to fibre-based broadband. On the other hand, many Internet Service Providers (ISPs) continue to support data caps as effective tools to manage customer demand, keep retail prices low, and contain their investments.

“Against this backdrop, InternetNZ commissioned independent consultant Colin Jackson to talk to a wide range of people and organisations to get their views on why New Zealand has data caps. Recording and articulating these views is a first step towards considering what our goals and initiatives should be in this area.

“It is clear that New Zealand’s very low data caps are a result of a number of factors. These range from market failure, lack of concerted consumer pressure, and fears of consumer confusion. The recent increase in fixed-line broadband data caps by Telecom and Vodafone only underline how much room there is for the major Internet Service Providers to move on this issue.

“We believe it is important to understand the perspectives of Internet intermediaries and content providers so that a well informed discussion on addressing low data caps takes place. At the end of the day, we hope that the discussion will lead to action. Otherwise the true potential of the Internet for Kiwis will remain a mirage as we fall behind other countries.“

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Reply # 502671 6-Aug-2011 09:45

I questioned why I recieved a letter in the mail yesterday from Telecom stating my data cap would increase from 40GB to 60Mb per month from August at no "XTRA" charge?

Now I know why !

http://www.stuff.co.nz/business/5400444/Low-internet-data-caps-investigated

freitasm

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Reply # 502673 6-Aug-2011 09:48

No conspiracy here. The extra data cap on Telecom was announced before this study and we have been discussing it for a while: www.geekzone.co.nz/forums.asp?forumid=39&topicid=87345

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Ragnor

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Reply # 502791 6-Aug-2011 17:13

Good summary of the current issues.

The main two to being artificial scarcity via handover dimensioning and supernormal profits from monopoly rent on access by Chorus despite regulation.

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Reply # 502795 6-Aug-2011 17:28

Ragnor: Good summary of the current issues.

The main two to being artificial scarcity via handover dimensioning and supernormal profits from monopoly rent on access by Chorus despite regulation.

Remembering of course that artificial handover dimensioning doesn't occur any longer with EUBA. Gone are the days of 45kbps per user dimensioning.

tdgeek

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Reply # 502801 6-Aug-2011 17:48

sbiddle:
Ragnor: Good summary of the current issues.

The main two to being artificial scarcity via handover dimensioning and supernormal profits from monopoly rent on access by Chorus despite regulation.

Remembering of course that artificial handover dimensioning doesn't occur any longer with EUBA. Gone are the days of 45kbps per user dimensioning.

Also, isn't the Chorus access charge a flat fee per connection, and therefore unrelated to data caps?

Ragnor

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Reply # 502867 7-Aug-2011 01:08

sbiddle:
Ragnor: Good summary of the current issues.

The main two to being artificial scarcity via handover dimensioning and supernormal profits from monopoly rent on access by Chorus despite regulation.

Remembering of course that artificial handover dimensioning doesn't occur any longer with EUBA. Gone are the days of 45kbps per user dimensioning.

Only because they've pushed back implementing it, read the last wholesale informer it's coming soon.

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Reply # 502868 7-Aug-2011 01:09

tdgeek:
sbiddle:
Ragnor: Good summary of the current issues.

The main two to being artificial scarcity via handover dimensioning and supernormal profits from monopoly rent on access by Chorus despite regulation.

Remembering of course that artificial handover dimensioning doesn't occur any longer with EUBA. Gone are the days of 45kbps per user dimensioning.

Also, isn't the Chorus access charge a flat fee per connection, and therefore unrelated to data caps?

Fair point.

I was going off on a tangent regarding price of internet in NZ rather than data caps with that one.

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Reply # 503327 8-Aug-2011 14:00

I'll have to take a bit more time in putting a proper response together for that discussion paper, but it really does miss a couple of key issues and falls into the trap of stating "possible" causes for the prevalance of data caps in NZ and skews the whole document around them without any real factual basis I can see.

1. the 45Kbps dimensioning wasn't in place before 2010, ergo, why did we have data caps before 2010?
1.a What stopped ISP's offering unlimited National before 2010?

2. UBS/UBA pricing - The biggest piece missing in that report, how regulation to encourage competition and protect the little guy has actually led to a lack of competition and "innovation" (i.e bigger caps) as they avoid pushing the whole market up to keep their costs lower.

jonb

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Reply # 503341 8-Aug-2011 14:22

Interesting report.

One thing that puzzled me about it though, was that there was quite a lot of mention about international transit (loose definition of demoestic) but the final conclusion is limited a tight definition to just traffic generated and received in New Zealand ( a tighter definition of domestic). The paper would have been better if it included international data cap issues in it's conclusions in my opinion.

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Reply # 503344 8-Aug-2011 14:28

Cymro: 1. the 45Kbps dimensioning wasn't in place before 2010, ergo, why did we have data caps before 2010?
1.a What stopped ISP's offering unlimited National before 2010?

It's always been there since the FastIP platform was introduced circa 2000. The handover links were dimensioned at N*32Kbps.

Cymro

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Reply # 503352 8-Aug-2011 14:40

PenultimateHop:
Cymro: 1. the 45Kbps dimensioning wasn't in place before 2010, ergo, why did we have data caps before 2010?
1.a What stopped ISP's offering unlimited National before 2010?

It's always been there since the FastIP platform was introduced circa 2000. The handover links were dimensioned at N*32Kbps.

I was led to believe that the N wasn't exactly managed, and that once a handover link was in place, you could basically load it to it's network limit because there was no policing in place.

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Reply # 503407 8-Aug-2011 16:02

There was probably a period where it wasn't enforced strictly but at the time international and domestic transit would have been a lot more expensive.

For international, SXC have doubled their capacity thus effectively halved their price (in per Mbit/s) around every 2-3 years.

Remember in 2005 1Mbit and 2Mbit UBS products had only just launched, ADSL was not line rate. The majority of people were on 128k or 256k plans.

PenultimateHop

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Reply # 503466 8-Aug-2011 17:47

Cymro:
PenultimateHop:
Cymro: 1. the 45Kbps dimensioning wasn't in place before 2010, ergo, why did we have data caps before 2010?
1.a What stopped ISP's offering unlimited National before 2010?

It's always been there since the FastIP platform was introduced circa 2000. The handover links were dimensioned at N*32Kbps.

I was led to believe that the N wasn't exactly managed, and that once a handover link was in place, you could basically load it to it's network limit because there was no policing in place.

Every interface I ever saw was definitely managed. I remember regularly begging Telecom to upgrade handover links in 2001 and 2002.

UBS and more recently UBA changed the game with rolling redimensions based on three month forecasts, however those were taken advantage of by some operators to allow for overdimensioning "outside the rules". I understand TNZ has come down hard on that.

insane

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Reply # 503508 8-Aug-2011 19:14

PenultimateHop:
Cymro:
PenultimateHop:
Cymro: 1. the 45Kbps dimensioning wasn't in place before 2010, ergo, why did we have data caps before 2010?
1.a What stopped ISP's offering unlimited National before 2010?

It's always been there since the FastIP platform was introduced circa 2000. The handover links were dimensioned at N*32Kbps.

I was led to believe that the N wasn't exactly managed, and that once a handover link was in place, you could basically load it to it's network limit because there was no policing in place.

Every interface I ever saw was definitely managed. I remember regularly begging Telecom to upgrade handover links in 2001 and 2002.

UBS and more recently UBA changed the game with rolling redimensions based on three month forecasts, however those were taken advantage of by some operators to allow for overdimensioning "outside the rules". I understand TNZ has come down hard on that.

Indeed the 32kbps per user dimension was always in play and actively policed as long as I can remember, I believe UBS started in 2004 after WBA/FastIP was phased out (which took some years).

I can't see how a provider can grossly over estimate their port usage as they get an invoice for xx number of wholesale ports per months from Telecom, so any lies about new uptake should have been easily spotted. It would be very concerning if some ISPs were getting preferential treatment over others.

I suspect what you may see is that smaller, mainly regional ISPs under UFB, will not offer services to all parts of the country as it may not be commercially viable depending on their various backhaul agreements etc they have in place, specially if they need to meet some CIR.

I guess the out for the CIR will be that the providers only needs to guarantee speeds to their edge, after that its considered the WWW (wild wild west).

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Reply # 503633 9-Aug-2011 03:04

insane: Indeed the 32kbps per user dimension was always in play and actively policed as long as I can remember, I believe UBS started in 2004 after WBA/FastIP was phased out (which took some years).

Correct.

insane: I can't see how a provider can grossly over estimate their port usage as they get an invoice for xx number of wholesale ports per months from Telecom, so any lies about new uptake should have been easily spotted. It would be very concerning if some ISPs were getting preferential treatment over others.

With UBS you were required to provide a three month forecast of port growth, e.g. in January you would specify your March port consumption. It seems like a lot of ISPs were deliberately overestimating that growth every time in order to get a higher average CIR. I understand that at least one ISP was getting close to 100Kbps per subscriber before Telecom finally got around to auditing the in service ports vs. estimated ports. Coincidentally this is about the time they shifted to 45Kbps per subscriber.

Yes it is (or was) concerning. And typical of Telecom's poor wholesale service enforcement.

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