A letter requesting Unmetered National Data Transfer

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#237006 19-Jul-2009 23:01

webwat: Government doesnt invest in peering unless a university decides to run a little peering business on the side. The peering switch requires users to connect, so of course port fees and related fibre services generate revenue.

The subscriber density issue has no effect on the economics of actual peering or how to get fibre to an population area, and I am sure most ISP use Ethernet equipment so its at least as fast as the peering switches. Most ISPs would have as much local bandwidth as any NZ peering exchange can cope with. Main problem is how much it costs to buy nationwide backhaul from residential subscribers through Telecom's network, and how many other residential customers would start complaining about congestion in their area or on their ISPs main Telecom link.

There is also the question of how much bandwidth can APE handle. Its a big switch but I dont think especially fast. Maybe someone could comment on how much close APE would be to having serious congestion in the case that local IPTV suddenly attracted several thousand residential users. Or is it already congested? That would explain why ny nationwide traffic is so slow already!

I'm sure someone from Citylink can chime in; but APE and WIX are effectively virtualised services (VLAN) on their public Ethernet fabrics. Given the nature of their network is commercial, I suspect they're unlikely to congest it. In the face of massive demand there's the possibility for momentary congestion or while they react with upgrades - but as you point out the constraint is getting the bandwidth to the end subscriber.

Regarding the subscriber density, it does have a small bearing - if you have significant density in an area you may want to hand that traffic off to peers as close to your BRAS/BNG as possible, rather than hauling it to Auckland or WIX. This has been Telecom's argument for introducing their 29 points of interconnect for lfully localised peering. Of course, Telecom's approach has drawbacks - 29 locations builds a lot of cost for peering partners to reach them all (or they must buy backhaul over TNZ's network to reach them).

Of course, ISPs which only have a single POP for their BRAS/BNG aren't necessarily interested in regionalised/localised peering - it's easiest for them to haul it all to Auckland (or Christchurch or where-ever they are).

While I'm typing this I thought I'd close off on the below as well.

exportgoldman: Why not have the government fund what Telecom proposed last year, that a series of 13(?) local peering exchanges are placed around the country and anyone which brings there own cable to that location can peer for free.

Free national traffic really fell out of the tree when TelstraClear decided to make a gob of money from it, and now local traffic trombones through Australia for local NZ content.

How is THAT cheaper than local peering...

Telecom's proposal was for 29 locations - to interconnect with their subscriber base only. While a nice step forwards by Telecom (and completely flies in the face of TelstraClear's stance), it has drawbacks.

I'm not sure the Government needs to fund peering - there are already multiple IXs in the country, easily accessible and modestly priced, but it certainly needs to encourage the two biggies to participate. Of course, as I mentioned previously, it could be in the "peering ISPs" favor to actually develop services that make use of their highly interconnected nature and start to attract revenue away from the biggies -- i.e. actually innovate for once. This has certainly happened in Australia, with the independents vs. The Gang Of Four.

As for the last comment - it should be vary rare that domestic traffic within New Zealand actually trombones Australia (or any other country) and is usually a configuration anomoly. Virtually all ISPs in New Zealand do have connectivity to TelstraClear or Telecom via their paid circuits, it just may not be cheaper for them to use this on a direct $/Mbit basis (but the other benefits, like it not being so latent, are worth it).

Screeb

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#237008 19-Jul-2009 23:06

PenultimateHop:
This includes pushing their vendors to develop some increasingly complex QoS tools for their GPON networks.

Of course. Every ISP should be investing in QoS. QoS doesn't have to mean a noticeable degradation in the end user's service however.

I don't see any conclusions being drawn from that. What I can see is of the top-10 countries, only 4 have similar or lower population densities to New Zealand. I can also see that as population density increases, broadband penetration does not necessarily increase

That's my point. Higher density does not result in higher penetration, therefore NZ is at no particular disadvantage due to its relative density.

(which causes problems with the argument that broadband is a necessity).

Not sure how you determined this...

Interesting statistics - but as with all statistics, drawing conclusions is difficult and the interpretations range widely. Only one of the countries in the top 10 is an English speaking country; but they all have very (much) colder winters than New Zealand.

Like I said before regarding Sweden, English may not be their primary language, but it is spoken widely in Europe.

I still stand by my original comments: population and population density are directly related to the deployment and cost of broadband services.

Even if that were true, deployment is a fixed cost, which has no bearing on the cost to provide bandwidth over a period.

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#237016 19-Jul-2009 23:32

PenultimateHop: I don't see any conclusions being drawn from that. What I can see is of the top-10 countries, only 4 have similar or lower population densities to New Zealand. I can also see that as population density increases, broadband penetration does not necessarily increase (which causes problems with the argument that broadband is a necessity).

Interesting statistics - but as with all statistics, drawing conclusions is difficult and the interpretations range widely. Only one of the countries in the top 10 is an English speaking country; but they all have very (much) colder winters than New Zealand.

Perhaps the true conclusion to be drawn is the colder it is, the less likely a population is to 'go outside any play' so they upgrade their broadband.

I have been following this conversation with interest PenultimateHop, you have raised a lot of interesting points. I'm suprised no one has brought up Korea, I read a lot of articles about them dragging themselves up by the bootstraps by getting nationwide super quick broadband.

I would be happy with even split tier costing for national/international traffic, personally I would like the option to pay $10 for unlimited traffic, or have it as a option if I was using something like Sky TV online which they recently canned because of problems with subscribers blowing out their ISP traffic bills.

Or paying a extra amount to get flat rate national traffic on a ADSL connection for a business to do backups with etc.

I do think they government needs to step in and do something, but exactly what and how needs to be left to smarter political minds than myself.

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#237033 20-Jul-2009 00:43

I doubt it'll happen, if they find legit uses for it (radio/tv streaming/gaming) then it would be a fantastic idea but my fear is that it will probably just become a hub of piracy as it used to be hence the sudden removal of them.

I just dropped my broadband down to 3GB now and may even look at just going mobile, internet aint what it used to be that's for sure!

PenultimateHop

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#237141 20-Jul-2009 12:13

Screeb: Of course. Every ISP should be investing in QoS. QoS doesn't have to mean a noticeable degradation in the end user's service however.

But has interesting artefacts to that service, and also completely goes against the grain of "net neutrality" (for the record I think net neutrality is a joke).

Screeb: That's my point. Higher density does not result in higher penetration, therefore NZ is at no particular disadvantage due to its relative density.

I think we are talking at slight cross purposes. I am not making a reference to population density driving uptake, I am making a reference to population density being directly related to the cost of building broadband networks, and thus the cost of that broadband service to the end user. It is an inescapable fact that the bigger the geographical scope of a network, the more it costs. If you have to stretch this across a small number of subscriber, the cost per subscriber is much higher.

Screeb: Not sure how you determined this...

If developed nations where broadband is extremely accessible (in part due to their population density. Deploying broadband in Korea and Japan's metros is easy - been there and done that), yet you are not approaching 100% market penetration, it seems broadband is not the necessity that people claim it is, vs. say power or telephone.

Screeb: Like I said before regarding Sweden, English may not be their primary language, but it is spoken widely in Europe.

Sure - it's widely spoken. As an English speaker I had no issues in Sweden (vs. say Germany or France), but it's not their language. A Swede is more likely to browse things in their own native tongue, and thus there is a captive market for their content and traffic. Swedish publications are not going to be widely sold in New Zealand, but they sure are in Sweden. Their ratio of imported vs. domestic bandwidth is obviously going to be much different purely for language reasons, and believe me this is very important.

It's also interesting that Sweden is rather user-unfriendly for English speakers - virtually nothing is signposted or subtitled in English compared to some other European countries.

Screeb: Even if that were true, deployment is a fixed cost, which has no bearing on the cost to provide bandwidth over a period.

That argument doesn't hold water. Networks don't run themselves, don't maintain themselves, and deployment is very rarely a fixed cost - because it's a continual cycle.

exportgoldman: Perhaps the true conclusion to be drawn is the colder it is, the less likely a population is to 'go outside any play' so they upgrade their broadband.

I have actually wondered this myself. It could be an interesting one for researchers to explore.

exportgoldman: I have been following this conversation with interest PenultimateHop, you have raised a lot of interesting points. I'm suprised no one has brought up Korea, I read a lot of articles about them dragging themselves up by the bootstraps by getting nationwide super quick broadband.

I try to be interesting - or at least add some points to these discussions so people can make better informed comments.

Korea is a very interesting case study. A developed and highly technology focused nation, with the advantages of extremely high population density, a Government willing to invest, and a common language that encourages local content. I've been involved in PON rollouts in Korea and it's been very fascinating, but it is so much easier to run 10Gbps[1] to a 30 story building and VDSL2 within the building risers than it is to run fiber to hundreds of bungalow homes over a much wider footprint.

exportgoldman: I would be happy with even split tier costing for national/international traffic, personally I would like the option to pay $10 for unlimited traffic, or have it as a option if I was using something like Sky TV online which they recently canned because of problems with subscribers blowing out their ISP traffic bills.

Or paying a extra amount to get flat rate national traffic on a ADSL connection for a business to do backups with etc.

So the question needs to be raised to Vodafone, TelstraClear, and Orcon (the operators with their own networks) of why they are not doing this. They are not constrained by backhaul costs and so have the ability to differentiate by offering a $10 add-on "all you can eat" domestic bandwidth package. The only reason I can see is that the investment in metering to provide differentiated billing is quite high, but given that they already have metering in place it seems that it is only an incremental cost.

Perhaps we need to challenge our GeekZone friendly ISPs to explain their position? Is this something freitasm could help with?

[1] As a minor side note, after looking at a PON rollout in South Korea, we discovered the average bandwidth consumption was actually very low. A GPON OLT with 8000 subscribers was only using an average of 100Mbps on a 10GE uplink. We were surprised by just how low the consumption was, and it is vastly different from what I've seen on DSLAMs in Australia and New Zealand.

(Edited because the rich text editor had issues with underline.)

Screeb

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#237224 20-Jul-2009 17:21

PenultimateHop:
But has interesting artefacts to that service, and also completely goes against the grain of "net neutrality" (for the record I think net neutrality is a joke).

Off topic, but why is net neutrality a "joke" in your opinion? The internet wouldn't be half of what it is today had it not been for the idea of net neutrality in its inception.

I think we are talking at slight cross purposes. I am not making a reference to population density driving uptake, I am making a reference to population density being directly related to the cost of building broadband networks, and thus the cost of that broadband service to the end user. It is an inescapable fact that the bigger the geographical scope of a network, the more it costs. If you have to stretch this across a small number of subscriber, the cost per subscriber is much higher.

If population density was directly related to the cost to deploy, then you would see a relationship between it and penetration (which you don't), unless the cost difference was negligible. It would appear that the cost difference is thus negligible because we can see that even countries with low density have high penetration (and that there is no trend overall).

Screeb:
If developed nations where broadband is extremely accessible (in part due to their population density. Deploying broadband in Korea and Japan's metros is easy - been there and done that), yet you are not approaching 100% market penetration, it seems broadband is not the necessity that people claim it is, vs. say power or telephone.

Not everyone knows they need it. It will also become more necessary in the future, and networks can't be built in a day (so we must be ready). For its age, uptake of broadband is extremely good.

Sure - it's widely spoken. As an English speaker I had no issues in Sweden (vs. say Germany or France), but it's not their language. A Swede is more likely to browse things in their own native tongue, and thus there is a captive market for their content and traffic. Swedish publications are not going to be widely sold in New Zealand, but they sure are in Sweden. Their ratio of imported vs. domestic bandwidth is obviously going to be much different purely for language reasons, and believe me this is very important.

No doubt they read Swedish news sites and such, but they surely still use most of their bandwidth overseas with movies and games from the US, for instance. That is to say, most of the Swedish content (and that of other non-native-English-speaking countries) consumed is relatively low bandwidth (e.g. general web surfing).

That argument doesn't hold water. Networks don't run themselves, don't maintain themselves, and deployment is very rarely a fixed cost - because it's a continual cycle.

It's a fixed cost relative to bandwidth. Obviously more equipment and lines spread over a larger area means more ongoing maintenance, but that is irrespective of whether those are 10G routes or 100M.

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#237329 20-Jul-2009 23:53

I wonder what capacity we actually have nationally? If we have plenty available I can't see why ISPs couldn't offer up a bit more national capacity, i.e. would't it cost roughly the same in maintenance etc. whether the fibre's sitting there doing nothing OR its saturated?

Someone mentioned DC hubs... ahh I remember those back in the days of JetStream. Nowadays is I think ISPs (well at least Telecom) would rather you used the SCC and paid for your downloads, probably makes more business sense unfortunately.

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#237425 21-Jul-2009 12:22

looks like wellington based extreme is going to give the unlimited national traffic a crack on DSL. According to their homepage at least.

http://www.xtreme.net.nz/

webwat

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#237708 21-Jul-2009 23:04

A network can scale quite easily until it reaches a plateau where part of the core network needs faster switches and routers, after which its pretty expensive to jump from 100Mbps to mostly Gbps, and then again for the jump to 10Gbps switch fabric. I dont think any NZ ISP even aggregate to 10Gbps fibreon any part of their network yet, except possibly TCNZ global gateway. Somebody could start a faster network and take the risk that nobody needs the bandwidth? Main problem would be finding enough demand from subscribers that are willing to pay, and developing a gigabit fibre network connected to actual buildings. Dark fibre would not be cheap (if any network will let you have it) so would need to be really high value customers to sell them more than 100Mbps.

I have to say that multi-tenant buildings are more attractive for any NGN proposal, but then come up against the hurdle that internal building wiring is sometimes provided by a bodycorp that has to approve anything outside individual offices or apartments. Often the solution overseas is for a VDSL chassis to be installed in or near the building with Gigabit fibre uplinks. So "FibreCo" will be wasting their money if they install passive optic splitters in these areas, instead of running direct to a central PoP where ISPs can install their own switches.

Time to find a new industry!

webwat

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#237711 21-Jul-2009 23:13

BTW: the idea of QoS is to prioritise the realtime traffic such as voice and interactive media, while less sensitive traffic is delivered across the same network without affecting realtimetraffic. People start complaining if their VoIP has too much jitter, so QoS is quite critical unless you happen to be more interested in the analogue PSTN than good broadband.

Time to find a new industry!

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#238013 22-Jul-2009 18:32

webwat: I dont think any NZ ISP even aggregate to 10Gbps fibreon any part of their network yet, except possibly TCNZ global gateway.

TelstraClear run 10GigE throughout their core and some other ISPs will have to be doing the same. A 1gig link is pretty easy to saturate

If you're talking about uplinks to the internet, then yeah I can't see many ISPs which would need 10gigE links. I suspect that they would have multiple 1Gig links but I'm sure I'll be proven wrong fast :)

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#238029 22-Jul-2009 19:17

nate: Last query, for the normal ADSL user, who would use copious amounts of national bandwidth anyway?

Thats the point, no-one. Trying to build a business using the current 'national price' model wont work. (As we've seen with multiple companies like SKY).

I think what pro-free/cheap national data people are trying to say is that, "open the show doors, people will come!"

By having cheap/free national data, new businesses will flourish, and a new breed of services will come to life.

As for customers obusing it by downloading to excess i say this:
Ten years ago, ISP data systems expected 10GB of data per day.
Five years ago, 100GB per day
Now, 2500GB day?

Can people see this is a natural progression?
Ten years from now, ISP's should expect a 2500GB per day PER PERSON!

Information breeds life!

Fraktul

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#238065 22-Jul-2009 21:27

jjnz1:
nate: Last query, for the normal ADSL user, who would use copious amounts of national bandwidth anyway?

Thats the point, no-one. Trying to build a business using the current 'national price' model wont work. (As we've seen with multiple companies like SKY).

I think what pro-free/cheap national data people are trying to say is that, "open the show doors, people will come!"

By having cheap/free national data, new businesses will flourish, and a new breed of services will come to life.

As for customers obusing it by downloading to excess i say this:
Ten years ago, ISP data systems expected 10GB of data per day.
Five years ago, 100GB per day
Now, 2500GB day?

Can people see this is a natural progression?
Ten years from now, ISP's should expect a 2500GB per day PER PERSON!

Information breeds life!

I have no idea where you got those figures from - they are way off the mark with stats I have seen in the real world having worked for a few telcos.

QoS is a tricky one. Situation dependant it is in many cases simplier and cheaper to just over provision bandwidth - not all cases.

I think much of this discussion can be summerised by the facts that to provide unmetered domestic broadband in the NZ market:

- Would result in a moderate increase in domestic traffic assuming no additional content, or that this enables some business models which are currently infeasible
- The above assumtion may prove valid in the very short term however it is reasonable to predict that additional domestic content, particularly video, will soon cause a significant increase in network utilisation.
- Network infrastructure, billing systems, and many hard and soft business capabilities of operators would need significant CAPEX and OPEX investment to implement and operate unmetered domestic traffic tarrifs.
- ROI for operators is unlikely to justify this investment.

You are asking for a free lunch basically.

Who is John Galt?

SamF

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#238069 22-Jul-2009 21:37

- Network infrastructure, billing systems, and many hard and soft business capabilities of operators would need significant CAPEX and OPEX investment to implement and operate unmetered domestic traffic tarrifs.
- ROI for operators is unlikely to justify this investment.

You are asking for a free lunch basically.

Granted. But considering the costs for national traffic are significantly less than for International traffic, there's no good reason ISPs couldn't implement a different (lower) charging rate for national traffic (other than the aforementioned lack of peering by major ISPs of course).

I am aware that my original call was for unmetered national traffic (as has been implemented in the past), however I was aiming high. In reality I would be very happy with simply a lower charge rate for national traffic.

Fraktul

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#238077 22-Jul-2009 21:58

Yes, they could do that. Broadband margins are pretty low however, the additional CAPEX and OPEX expenditure means this is not a compelling proposition for operators.

If there was significant competitive advantage from one of their competitors with such a tarrif plan then you probably would see some operators adopt a different approach to national traffic tarrifs. There isnt currently.

It just does not make commercial sense to take this approach in the current market if your business model is as a simple bitstream provider with little affiliation with content providers.

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