When will they learn?

Forums › 2degrees (including Slingshot, Orcon, Flip, Stuff Fibre, MyRepublic, 2talk and Vocus) › When will they learn?

worm9100

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#79721 21-Mar-2011 23:05

When are New Zealand isps going to give up and stop attempting unlimited broadband plans? its obvious we are far to isolated to have them telecom prooved this after failing twice and international bandwith is expensive as it is. I know slingshot said they are commited but its now obvious AYCE is well over subscribed and is casing problems for other slingshot users especially with the harsh prioritisation. I did read that one of the admins on the slingshot forums named Rick said that sign ups for AYCE should cease soon though I dont know how much that will help considering the large ammount they already have what do you think should they cancel AYCE So things can go back to way they were back before AYCE or stop sign ups now and give it a chance to become managable? because quite frankly its ruining it for everyone. I was going to swtich from slingshot but money is tight at the moment and I cant afford to change :(

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#450563 21-Mar-2011 23:27

The only redeeming feature of slingshot on the other plans is the torrent cache and the free offpeak. If it was not for those 2 things I would have been gone a long time ago. I dont know how the cache works for AYCE users, but if it can even deliver half the speeds I get offpeak, it would be viable (except for the bizzare requirement for the obsolete landline)

Yes its total crap for anything thats not torrents or youtube that are lucky enough to get cached, but financially its the only option when compared to $100's of overage costs with any other ISP.

Its crap, there is a need for it, and for those people it works well. Dont knock it.

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#450601 22-Mar-2011 08:05

NZ isps will stop attempting unlimited plans, when the demand for them ceases.

With the spectacular sized data caps that ISPs currently supply. I dont see this happening soon.

In actual fact on the Pacific Fibre site. They indicate they would like to promote unlimited data plans for NZ, as things like IPTV & streaming use alot of data & hence data caps wont work well with those services.

Once SXC's monopoly is over, ISPs will be able to buy alot more bandwidth. The commerce commission cant stop SXC currently as it is not all in NZs jurasdiction.

Just be patient. I have been told from a reliable source that Pacific Fibre has all the cable & materials ready. They are just getting more support & working out the cable laying.

2013 is the eta I think.

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Ragnor

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#450789 22-Mar-2011 15:37

It's not that it's impossible it's just that the execution of unlimited plans has been extremely poor by NZ ISP's.

Telecom simply didn't have the right traffic management equipment or policies in place to begin with. They priced the plans too cheaply initially at $99 for Big Time + Land line. They were also supposed to have their web caching infrastructure and google/youtube in place before Big Time but neither was completed till well after launch.

Slingshot have better equipment (SCE, Oversi, Steam content mirrors, access to Orcon's google/youtube cache via APE) but they also priced the plan too cheaply and seem to have a void of expertise or at least traffic management decisions have been made based on marketing/politics instead of technical merit. It should be better than it is but it isn't.

Also handover link dimensioning on the older Telecom wholesale services (UBS/BUBA) was a significant constraint on offering larger caps or un-metered. With EUBA now this seems to not be an issue currently so we are seeing some larger caps being offered (even from Telecom).

NZ ISP's are probably watching the Australian market closely where all the major ISP's have released relatively cheap large cap plans 200GB+. This seems like a reasonable intermediary step between tight caps and un-metered and appears to be happening here just at a slower pace than in AU.

wreck90

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#450798 22-Mar-2011 15:51

I see that some of the USA ISP's are starting to introduce caps.

So, maybe NZ are the leaders he he.

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#450801 22-Mar-2011 15:52

Mr OP, paragraphs are your friend.

Ragnor

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#450935 22-Mar-2011 22:14

wreck90: I see that some of the USA ISP's are starting to introduce caps.

So, maybe NZ are the leaders he he.

US ISP's are seeing a double whammy of declining revenue in fixed landline on the telco side and in and declining pay tv revenue on the broadcaster/content provider side so they are tryng to maximise profit from Internet services.

Increases in mobile revenues should be offsetting the loss in fixed line so it's probably the decline in pay tv that's tipping the scale.

Of course you will see quite a few providers who have no dealings in mobile, tv or landline continuing to offer un-metered internet services on a ARPU basis.

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lokhor

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#450939 22-Mar-2011 22:33

http://broadbandguide.com.au/plans

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tdgeek

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#450941 22-Mar-2011 22:40

[US ISP's are seeing a double whammy of declining revenue in fixed landline on the telco side and in and declining pay tv revenue on the broadcaster/content provider side so they are tryng to maximise profit from Internet services.}

I think you will find the issue is congestion by filesharing, this was raised well over a year ago.

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#450943 22-Mar-2011 22:46

tdgeek:

I think you will find the issue is congestion by filesharing, this was raised well over a year ago.

One can argue that congestion is being caused by:

A: Providers dropping peering in order to try and charge both ends for transit, see netflix: comcast vs level 3 peering dispute OR previously cogent vs sprint etc

B: Under investment in infrastructure due to oligopolistic profit maximisation

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#450947 22-Mar-2011 23:01

If we ignore pricing, competition, revenue, etc, etc, and look at the physical capability for data transmission. Transmission has its limits.

They say 75% of traffic is spam, and that is primarily emails. Imagine the traffic of P2P if many users are doing severe Gb. And it is shared, so for every 100Gb a high user downloads, how much is uploaded? Here, maybe 30%, but overseas its massive as they have no caps. It is sheer volume that is causing cap issues, not cost, as in the US most of the traffic is national, i.e. all but free as there is not a SX Cable type of investment. Same for Korea, yes its fast as most of their internet is national and close at hand. Here in NZ we are small, all internet is overseas, and a huge cost to get a cable, divided by few users.

What will happen when the new cable is ready? To support that, the NZ population stays the same, therefore the revenue we will pay stays the same. That same user number and same revenue amount then needs to supply the same revenue to two undersea cable providers. For me, I cannot see the math. Theoretically, if that market is shared evenly, how does that help competition and data pricing?

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#450955 22-Mar-2011 23:35

SXC was founded in 1996, completed in 2001/02 and cost around $USD 1.3 billion. It completely paid off bank debt to finance the construction within just a few years of operation in 2005

It's operating and upgrade expenses are easily covered by it's current profit and it returned a $36 million half year dividend to ~50% owner Telecom in February. $83 million dividend for the full year to Telecom and $186 million total dividend for the whole company (ie: total to all the owners/shareholders).

Basically it's able to extract supernormal profits (economics 101) as the only provider of a service (or oligopoly if you cound AJC and PIPE in AU), more competition will reduce ip transit costs for all ISP's in NZ and Australian benefiting all customers!

Telecom will get a lower dividend from SXC due to increased competition but will also have lower international ip transit costs itself. It's likely they will have to innovate in other areas as their direct revenue from SXC will decline more than their ip transit costs fall.

Every other ISP and their consumers will be better off!

Also pacific fibre are aiming to offer a slightly different service than SXC, unprotected direct to US low latency transit (unlike SXC which is protected and via hawaii).

ISP's will likely buy transit from both or from resellers selling both, you might actually see an increase in the total market revenue wise.

The limits of fibre optic technology have not been hit yet, there have been regular upgrades in the capacity of SXC by upgrading/changing media converter hardware/technology at at each end.

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#450998 23-Mar-2011 08:42

Good points Ragnor, we will wait and see. The debate is are their excessive profits that can allow both to exist, you say yay I say nay!

The payoff of debt is not relevant, as the business has assets, hence asset value whereby the net profit needs to be at a satisfactory level (Accounting 101)

My argument is that while data demand is growibg the number of users paying revenue is largely static.

You mentioned SXC fibre cable capacity? I agree, my point was capacity in the US land network where P2P was causing congestion.

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#451011 23-Mar-2011 09:06

It's pretty simple, Unlimited plans can only work when the cost of getting the data the clients want to the client at the speeds they want is below the price the clients are willing to pay

Most problems are the result of previous solutions...

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#451182 23-Mar-2011 16:57

Sam Morgan presenting at the NZCS 2010 conference
http://vimeo.com/15495728

From 11.20ish in he talks about pacific fibre, before that is about his background and trademe etc.

NZCrusader

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#451187 23-Mar-2011 17:50

I have put forward my ideas on the slingshot forums, suggesting that p2p ( which makes a sizeable chunk of any network graph in probably most networks ) could be severely limited during peak hours, or during the (higher) peak times in late afternoon / evening.

EG. Limited to 30-50kb/s or ( certain p2p types ) blocked completely during a certain time of day.

Thus giving every other use of the internet ( streaming, gaming etc ) a fighting chance at heavy network use times.

I think AYCE users could put up with having to do torrenting at off peak or during lower network load hours.

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