Stolen or lost mobile phones are a global problem. With the introduction of GSM phones in the ‘90s, the ability to simply move a SIM card between phones started a crime wave because phones were such an easy target. Once somebody had a stolen phone they could simply use it themselves, or on sell it, and the buyer could simply put their SIM card in the phone and use it – in many cases probably oblivious to the history of the phone.
The solution was blacklists of International Mobile Equipment Identity (IMEI) numbers – the serial number of the phone. Operators could block IMEI numbers to prevent devices working on their network, and share the IMEI data between themselves to stop the device working on other networks.
While such blacklists are common place around the world, no global blacklist exists, meaning that devices that are reported lost or stolen in one country can still be used in another country. This has created a global black market for phones, and I’ve seen retailers in Hong Kong selling refurbished “as new” phones that will not work with Hong Kong SIM cards, but will work outside the country.
In 2014 the Telecommunications Carriers Forum (TCF) introduced a mobile blacklist with data shared between New Zealand’s mobile networks – 2degrees, Vodafone, and Spark. Phones that were reported lost or stolen could have their IMEI added to this blacklist which would result in the phone becoming inoperable on any of the networks in New Zealand.
Prior to the introduction of the TCF backed blacklist system, blacklist data was shared between Spark (who were still Telecom at the time) and Vodafone, but not 2degrees.
This fuelled a market in New Zealand for devices that were sold on Trademe and advertised as “only works on 2degrees”, and a number of threads exist here on Geekzone detailing experiences of people people purchasing such devices. Sellers of these devices were clearly aware these devices were blacklisted on the Spark and Vodafone networks, but buyers who didn’t understand the reasons for such a statement were left perplexed when they tried to use their device on Spark or Vodafone and found it didn't work – while it did work fine on 2degrees.
Even when they were sharing IMEI data only with Vodafone, it was well known that Spark were adding IMEI numbers to the blacklist that were not only for stolen or lost devices, but from customers who had abandoned a term contract with a subsidised handset or hire purchase deal. Around this time there was even an online retailer selling new devices that were also clearly marked as “only works on 2degrees” where the source of the handsets was apparently a cancelled corporate contract.
In 2014 when the TCF blacklist was introduced, the TCF made the purpose of the blacklist service pretty clear in its voluntary code -
What it is
The IMEI Blacklisting Code allows consumers to report lost or stolen handsets to their mobile provider so it is blocked and cannot be used on any mobile network, nationwide. Purpose
The purpose of the code is to co-ordinate sharing of IMEIs between mobile networks to discourage theft and disrupt the operation of illegal markets.
Section 5.3 of the code also details what the blacklist should (and should not) be used for -
5.3 Operators shall not Blacklist or un-Blacklist an IMEI in order to gain any commercial advantage or inflict any damage on any other Operator or party. Blacklisting cannot be used to withhold service or resolve commercial disputes (including bad debt scenarios). Operators cannot use any contact made by a former customer requesting to Un-Blacklist an IMEI for any “win back” or sales activity.
Over the last few years I’ve seen a number of threads on Geekzone as well as a number of posts on social media from people who have purchased mobile phones both via Trademe and privately, and found that several months later the phone has suddenly stopped working. In all cases the phone has been found to have been blacklisted.
In several cases the buyer had checked the phone using the TCF blacklist lookup when they purchased it, and saw the device was not blocked. One example of this is detailed below.
So what’s going on?
It would seem that Spark, and possibly 2degrees, are still using the TCF blacklist for purposes outside the scope of the blacklist, ie a bad debt scenario.
A customer purchases a device on a contract or an interest free free deal, sells it to an unwilling buyer who even checks the TCF blacklist and find it passes, pays the contract for a several months, and then suddenly cancels it or decides not to pay it. The device IMEI is added to the TCF blacklist, and the third party buyer of the device suddenly finds their device doesn’t work.
They then often find themselves in a situation where there is very little they can do. The original seller is often nowhere to be found, and the buyer is stuck with an expensive brick that is now useless.
In this example I’m using from Geekzone, the seller did eventually offer a refund. In other cases people have not been so lucky.
The TCF have pushed their blacklist search as a way for a buyer to check their handset and ensure that it’s not blocked – which is fine for checking if a phone has been blocked due to being reported stolen or lost, but it’s very clear now that this search is now pretty limited when it comes to checking the real status of any phone purchased privately. A phone that passes an IMEI check could still be blocked at any time if if the seller of the default defaults on payments.
The TCF themselves do vaguely warn of this on their website but most people would probably not realise under what circumstances this would occur. Most people would assume a second hand phone that passes the check would be safe to buy - after all that was the whole point of the online tool to allow people to check a device.
All of this poses the question of why the TCF are permitting carriers to use their blacklist for a “bad debt” scenario, something that would seem to be in breach of their code surrounding the use of the blacklist.
When high value products are sold by retailers on finance deals, most use the Government funded Personal Properties Security Register (PPSR) to lodge the sale – with the purpose of the database being to provide a central register of products that may have a financial claim against them. It poses the question of why mobile providers don’t appear to be using this database for high value phones, but instead relying on a blacklist.
It also poses the question of whether carrier has a legal right to effectively block a device that they have not bothered lodged a PPSR security interest over.
Right now buying a second hand phone carries significant risk unless you know exactly where the device came from, and can be certain that no money is owed on the phone. My attempt to check an IMEI with Spark showed they are unwilling to provide this information when asked, as any information relating to the phone or IMEI seems to be regarded as personal information. With no authority to access the account of the person who originally purchased the phone, it’s impossible to get a clear answer from them.
Right now the TCF searchable blacklist is essentially broken – and urgently needs to be fixed. If carriers aren’t going to stop blacklisting devices for bad debts, the TCF urgently need to expand the search to include whether money is owed on a phone.
People are being scammed, and the TCF online search is being used to benefit the scammer and hurt the unwitting buyer. That is simply wrong.
I have received the following response from Spark regarding the issue.
Spark do not blacklist IMEI numbers if a customer has bad debt, or defaults on a payment. The exclusive purpose of blacklisting handsets is when devices are either stolen, lost or involved in fraud.
There are a number of steps Spark take to determine fraud or fraudulent activity before we blacklist a device. Where it is deemed that fraud or fraudulent activity has occurred the case must satisfy the burden of proof and the following must apply:
- There must be documentary and/or other evidence which prima facie supports the allegation of fraud; and,
- There must be sufficient evidence to lay a Police complaint.
However, fraudulent activity can take some time to identify – which is why telecommunication companies have up to 120 days under the blacklist policy.
We understand it is very frustrating for individuals who find their phone has been blacklisted months after they have purchased it, but this is unfortunately a risk when purchasing from a second-hand site such as Trade or Facebook Marketplace.
While Spark say that a device will not be blocked due to a bad debt, it’s a grey area between defining a “bad debt” and “fraud”. Somebody buying a device with falsified details and defaulting on a payment would likely be treated as a case of fraud, and the device blocked.
The response from Spark really emphasises the failings of the TCF system. A individual buying a second hand device can have no certainly at all that the device will not be blocked at some point in the future after they have completed the sale, and more importantly after they’ve checked the TCF mindyourmobile site and verified that the device they are wanting to buy is not listed as blocked on the site.
People know they can easily on sell devices to unsuspecting people who will check the blacklist, but have no idea the phone effectively has a security interest registered against it, and more importantly no way of actually knowing this or being able to check this. That's a broken system, and it needs to be fixed.
If a device is purchased on account or as part of an interest free deal and effectively has a security interest registered against it this should be lodged with the PPSR, and the TCF website should be doing a lookup against that to not only show the current status of the IMEI, but also whether security is lodged against it. This would allow any potential buyer to be fully aware of the risks associated with buying the device.
Anybody looking to purchase a second hand phone needs to be fully aware of the risks. You could easily end up with an expensive brick despite through no fault of your own, and then find there is very little you can do when you’re in this situation.
Spark yesterday announced it was planning to shut down it’s nationwide paging network at the end of March 2017. Unlike usual telco announcements this doesn’t seem to have attracted a single mainstream media story, any significant social media discussion, or even the creation of a thread here on Geekzone. A few people of whom I mentioned it to responded with “we didn’t even realise it was still going!”.
The paging network was launched by Telecom New Zealand in 1988 using POCSAG technology on a single 157Mhz VHF frequency. A second channel was launched not long after this to cope with demand for the service, and in the late ‘90s the service was also upgraded to support FLEX technology which delivered significantly faster throughput. I remember in the mid ‘90s that a Minicall prepay pager was the hip gadget to have – you had an 026 number that people paid to call (99c from memory) and the messaging centre transcribed this and sent this to your pager. The entire market for such a service died pretty quickly however once mobile phone popularity increased and SMS became mainstream.
While many see pagers as a relic from the ‘90s that is now obsolete, the real world reality is that they still play a very important role for many industries, with emergency services in particular still relying heavily on the technology. Despite advances in mobile technology and SMS, the reality is that there is not, and it’s unlikely there will ever be a replacement for paging that offers all of the benefits that paging does today.
The biggest user of paging right now is the New Zealand Fire Service. Paging is the primary method of turnout for every fire appliance in the country, with over 8000 volunteer fire fighters and 1700 permanent staff across the country relying on a combination of both Spark paging, and in areas that are so remote that coverage doesn’t exist, local in-fill transmitters (typically on a fire station or a local hill) relaying pager messages via satellite to a local paging transmitter that rebroadcasts the messages. Paging is also used as the a means of turnout for every ambulance in the country.
There are other users of the paging network such as hospitals who could easily deploy their own internal paging systems to replace the Spark network, but the NZFS finds itself in the unique situation of needing to have a nationwide solution.
Over the last few years the NZFS have looked at alternatives, and SMS based solutions have formed the basis of this. It was only a few years ago that Gen-i (who handle the NZFS technology solutions) proposed giving every volunteer in the country a new mobile phone to carry around to replace their pager. Such a backwards solution shows the problem of trying to replace old with new. It really was the world’s dumbest idea expecting every person to carry around another phone just to replace their pager. Such a solution also relies on SMS, which is a significant downfall.
Unlike a mobile phone a pager has a battery life of upwards of a month. Coverage is also a lot better indoors due to the much lower frequency in the 155MHz band (vs 700,800,900,1800,2100 or 2600 used by your mobile phone), and more importantly the pager network is rock solid - outages are so rare they basically don’t happen. Lastly, but most importantly, the paging network doesn’t get flooded with messages that can cause delays, or suffer issues with cross network connectivity. When was the last time you saw delays with SMS messages? Despite the best efforts of carriers, issues with the SMS service (and mobile networks in general) are something that has happened on a fairly frequent basis. As the service is best effort, no guarantees can be placed in delivery times, and as a result at times of busy network loading delays can occur. If phones were to replace pagers, a delay of a minute could well be the difference between life and death. We also know what happens to mobile network during a natural disaster such as the recent Christchurch or Wellington earthquakes – the networks grind to a halt due to overloading. Technology to give certain phones priority in such instances can work well in the TDMA world, but struggles in the world of WCDMA and LTE networks where the noise floor becomes critical and air interfaces can easily be overloaded. In the UK a system known as Mobile Telecommunication Privileged Access Scheme (MTPAS) exists – but is designed primarily for voice calls.
There have also been attempts over the years to build app based solutions that would actually offer benefits – a notification of a call that would allow the end user to reply saying whether they are responding or not responding and would allow a brigade to know exactly how many crew were responding to a call. Solutions such as this rely on the mobile network which is the weak point. Many benefits exist with SMS, and SMS has replaced pagers for a huge number of users, but for time critical messaging the reality is we don’t have a modern solution that can replace the paging network. When time is critical, nothing beats the distinctive tone of the pager to let you know that an immediate response to the station is necessary.
The only downside of paging is a complete lack of security – messages can easily be intercepted by anybody with a radio scanner and software running on a PC.
All of this poses the question of what solution the NZFS will adopt, and what this will mean for the 8000+ volunteers who rely on the current paging network. Whatever solution is adopted, it’s safe to say it will not have the reliability and performance the current paging network offers. It’s very much a case of something new not being able to replace 30yr old technology.
In the meantime does anybody want to put in an offer for my pager collection that has been used for parts and reprogramming over the years? :-)
Update: I’ve been told that the NZFS are looking to deploy an expansion of their current infill paging and expand this nationwide. RSM shows a lot of licences in the 160MHz band that have been recently been allocated to them.
There has been a lot of discussion in the media in recent days regarding the UFB (Ultrafast Broadband) fibre rollout and the issues surrounding both voice only plans and the availability of phone services over UFB during a power cut. Due to a large amount of misinformation that’s been spread surrounding this issue, primarily by mainstream media who seem to lack any technical understanding of the issue and instead focus on disseminating mistruths, I felt the need to write something to explain things that can hopefully be understood by everybody.
Last week the Dominion Post a story ran about brand new Wellington City Council flats in Miramar that in line with many new buildings was only capable of receiving internet and phone services over the UFB network. As no copper had been reticulated inside the new building, it was not possible for people living in the flats to receive a regular phone service over the copper PSTN network like most were used to. As many residents were elderly, they had no need for internet access, and found themselves having to pay more for an internet and phone bundle as they couldn’t have a phone only connection over UFB. Like the vast majority stories on Stuff these days where comments are enabled, numerous comments added nothing to the debate, or society as a whole. Aside from the name calling, bashing of big companies and some absolutely stupid suggestions, they showed how little the average person actually understands about the technology behind their day to day lives.
Some in the media were quick to jump onto the bang wagon bashing Spark (what anything has to do with them is a mystery), along with the UFB project as a whole. Many were also quick to make fools of themselves by jumping into the debate and laying blame while relying on misinformation to make judgements.
One thing needs to be made very clear – there is nothing stopping a phone only connection being delivered over a UFB connection. An ATA (Analogue Telephone Adapter) port is located on every ONT (Optical Network Terminal) which in installed in your premises to deliver UFB services, and an ATA only service plan is available to every RSP (Retail Service Provider) that offers UFB services. Why you might ask do none then offer a phone only plan? That’s both a business and a technical decision, both of which I’ll discuss in more detail.
To deliver a voice connection over UFB a RSP has two options – use the ATA port in the ONT, or use an ATA port on the RGW (Residential Gateway) that’s installed. The RGW is your router that plugs into the ONT and provides you with internet access via Ethernet and WiFi. Your regular corded or cordless phone simply plugs into the RJ11 ATA port on the ONT or RGW, or your existing home copper cabling can be wired into this port by a technician so all existing phone jacks will continue to work just like they did with a copper connection. Both approaches have advantages and disadvantages, and neither is a better or worse solution – they are simply two different ways to deliver a dial tone, and ultimately a phone service to the customer.
Currently there is a mix of RSPs using the ATA port on the ONT, and using the ATA port on the RGW. Both solutions are VoIP (Voice Over Internet Protocol) based solutions and connect back to a soft switch (a VoIP “phone exchange”) at your RSP or VoIP provider.
So why the two approaches? Quite simply this comes down to the hardware a RSP wants to deploy, and how they plan to provision the hardware. If a RSP uses their RGW for VoIP they can deploy the same RGW to deliver internet and VoIP phone services over both DSL and UFB – this means their backend provisioning system and processes are identical for provisioning hardware for a customer, regardless of the platform they’re on. If a customer moves from DSL to UFB, nothing has to change (not even the hardware) to deliver their connection. If a customer moves address, once again no changes are required as the RGW can simply be moved between premises and will continue to function once a DSL or UFB service is provisioned. One such example of this is Orcon who use the same hardware across DSL and UFB to deliver voice and Internet to customers.
For a RSP to use the ATA port on the ONT they need to support the auto provisioning of the ATA in the ONT, which may require building an entirely new provisioning platform, or significant changes to their exiting platform. There are also differences between the provisioning methods between the hardware used by Chorus and the LFCs (Local Fibre Companies), as Chorus are not the sole provider of UFB as many people mistakenly believe. Once you have built a provisioning platform you need to deal with the minor differences between the different ONT hardware used by Chorus and the LFCs – as each has slight differences in it’s SIP (Session Initiated Protocol) stack used in the ATA for the VoIP product. All of this requires testing, testing and more testing. Once this is all complete you then have to deal with day to day BAU (Business As Usual) processes – a customer moving address for example to another UFB address would need to have their voice service removed from one ONT and provisioned onto another ONT on a specific date to ensure continuity of service. If you’re going to rely on the ATA port on the ONT a customer move between different service types can become very complex – if a customer moved premises to a copper area they would need to have their phone number ported back to a regular POTS line, and if this involved a move of address outside the current exchange area, keeping the same phone number may not be possible at all without the added cost of a Customerlink which may mean the customer has to have a new number.
At the end of the day one of the biggest determining factors is quite simply going to be the hardware a RSP wants to deploy. If they’re going to deliver a voice service via RGW, they’re going to need to deploy hardware that supports this functionality. If a RSP opts to use the ONT ATA port they have a far greater choice of hardware as it does not need voice functionality.
From a technical point of view there is no difference in the quality of the end product that is delivered. If your phone service is delivered via the ATA port on the ONT it uses it’s own separate VLAN to connect to your RSP, and has guaranteed bandwidth to ensure that voice traffic can’t be impacted by other internet traffic. If your voice service is delivered via your RGW, it should use 802.1p tagging on the voice traffic so the voice traffic will be use the CIR (Committed Information Rate) high priority queue on your UFB connection, and will also be unaffected by other internet traffic.
If you’re a UFB customer right now you’ll be delivered your voice connection using one of those two delivery methods – with the exception being if you’re a Spark UFB customer. All Spark customers who have been provisioned with a UFB service are currently receiving their phone service over a copper connection in parallel with UFB, as Spark did not have a VoIP offering that was ready when UFB launched. Spark this week launched their VoIP offering, and will soon begin the task of moving every existing UFB customer across from their copper connection to the ATA port on their ONT, a process that will involve hooking the ONT up to the existing premises wiring so all phones and jack points on the premises will continue to function as they presently do.
So why don’t RSPs offer a phone only service over UFB at the same price as a copper line? To answer that it needs to be made clear that the only RSPs who could do this are RSPs who use the ATA port on the ONT. The price of an ATA only connection is significantly cheaper than that for an internet connection. If an RSP is delivering a voice product using a RGW they need to pay for a UFB internet plan rather than an ATA voice only plan, hence the higher cost. So why aren’t RSPs who are doing voice over the ONT ATA port offering a voice only plan? That’s something only they could answer – and the answer will purely be a business one as there is nothing technical preventing them. With Spark launching their VoIP product this week they have indicated they will offer a voice only connection over UFB at the same price as existing copper phone plans.
While the debate raged in the media over voice services over UFB, many also focused on the so called “reliability” of UFB, and the fact phone services would not function if there was no power in a premises. Unlike a copper phone line, your RGW and ONT require power to operate, so in a power cut you’re not going have phone or internet. In many countries where fibre services have been been deployed to the home, a UPS (Uninterruptible Power Supply) has been fitted to ensure that the ONT and RGW still have power, and will continue to operate during a power cut. So why isn’t a UPS fitted as standard with a UFB install. Answering that isn’t as straight forward as it may sound.
Before the UFB project was rolled out, Chorus had already been rolling out fibre to many new subdivisions across New Zealand for a number of years, a project that was known at the time as BoF (Broadband over Fibre). Trials of UPS units were undertaken as part of this, and a lot of industry discussion occurred around the issue of whether these should be fitted as standard. In 2011 an in-depth review of the 111 Emergency service also discussed the issue and invited public comment. A key issue with the installation of a UPS is that it requires regular replacement of batteries every few years to ensure it will continue to operate in a power cut, and ideally requires monitoring to ensure that it is operational. One of the most significant issues raised was exactly who this responsibility should fall on, and who would be liable should an incident such as the inability to call 111 in an emergency should the UPS fail. If the burden of monitoring and maintaining the UPS should fall onto Chorus or the LFC, should they be able to charge extra for the service? If it was charged, would be be made mandatory, or optional? The discussions raised more questions than answers.
Some in the alarm industry saw this as a perfect opportunity for them to step in and provide a service, as many homes already have an alarm which typically has a battery backup, and an existing maintenance program to replace this every few years. In the end the decision was made to effectively leave the decision to the house or business owner and let them take full responsibility. If you want a UPS to keep your hardware going, it’s up to you to supply and maintain it, however as part of a UFB install, a technician will hook a customer supplied UPS up to ensure it is operating correctly.
One key aspect many didn’t discuss is the fact some anecdotal evidence after the Christchurch earthquake pointed to many homes (some put the figure as high as 2/3rds) only having a cordless phone which also requires power to operate. After the Christchurch earthquake the copper network remained largely intact and operating in most areas, however many people were unable to make calls because they had no corded phone at home and cordless phones could not be used with no power. If you have a copper connection and rely on a cordless phone and have no UPS, you’re really no different to a home with a fibre connection and no UPS.
To complicate matters slightly more, many people are also oblivious to the fact a copper phone connection is no longer necessarily delivered solely from an old school NEAX phone exchange. Many customers now receive their phone service over copper, but it’s actually a VoIP service delivered from a local roadside cabinet. These roadside cabinets contain a battery backup and connections for generators in a power cut, but emphasise the fact the copper network is not the invincible 100% uptime network that some may believe. It’s also worth keeping in mind that the current Spark NEAX exchanges providing copper phone services for most people will not be around forever – a few years ago 2020 was the planned decommissioning date for these. While that cut-off date is unlikely to occur, the future for New Zealand is fibre, and decommissioning of copper services will occur at some point.
Bashing of the UFB project has been pretty prolific, especially from some who’s political views do not agree with it - which is something that’s very unfortunate. By the end of the decade New Zealand will have one of the best broadband networks anywhere in the world, delivering fibre to over 80% of New Zealand residents. The benefits of fibre are already being seen, and rather than focusing energy on trashing the project, these people would be far better off focusing on how UFB can, and will make day to day life better for all New Zealanders. New Zealand is a country where tall poppy syndrome is alive and well – and it’s not solely aimed at people, but big business and infrastructure projects as well.
NZ has fantastic broadband. I’ve written about this plenty of times, and it seems that many NZers are finally beginning to accept that despite certain ISPs and political parties having bombarded us with propaganda telling us that we have “3rd world internet”, that we actually have both a world class copper network, and a fantastic future ahead with fibre currently in the process of being deployed to around 75% of premises as part of the Ultra-Fast Broadband (UFB) rollout. Right now well over half a million residential and business premises in New Zealand now have access to fibre, 100Mbps connectivity is quickly becoming the norm, and we’re not far away from the mass rollout of 1Gbps connections. Compared to many countries we like to compare ourselves to (such as Australia), we’re literally years ahead, and by the end of the decade will have one of the best nationwide broadband networks of any country, anywhere in the world.
The rollout of fibre fed cabinets delivered 10Mbps+ ADSL2+ connections to around 85% of the population, and VDSL2+ speeds of up to 70Mbps to around 45% of the population as part of Telecom’s cabinetisation project between 2007 and 2011. From 2011 onwards we’ve seen the rollout of UFB start, which will deliver fibre to around 75% of premises in New Zealand by 2020. The copper footprint is currently being expanded with the Chorus Rural Broadband Initiative (RBI) delivering ADSL2+ and VDSL2 to tens of thousands of rural users,
While all of this is great, there are unfortunately still a small percentage of internet customers in New Zealand who are serviced by legacy equipment that will not receive the same level of broadband service as a user connected to newer xDSL equipment or fibre. The mass introduction of unlimited plans in New Zealand in recent months has seen a growing number of complaints from people in rural areas complaining about severely degraded broadband performance, particularly in the evenings where internet usage is at it’s peak. I’ll attempt to explain why this occurring, and what you can do about this.
Lets start by a history lesson. Wholesale broadband in New Zealand consists of a regulated product known as Unbundled Bitstream Access (UBA). Pricing for UBA is set by the Commerce Commission, and the product has some very detailed requirements that are set in place by the Ministry of Business, Innovation and Employment (MBIE) and the Commerce Commission. Chorus are responsible for delivering a UBA product that meets these requirements, and depending on your location your wholesale UBA connection will be delivered via one of two Chorus products - Basic Unbundled Bitstream Access (BUBA) or Enhanced Unbundled Bitstream Access (EUBA). The type of connection used will depend largely on your location and the type of equipment you’re connected to on the Chorus network.
Chorus Wholesale xDSL (ADSL,ADSL2+ and VDSL2) Internet connections in NZ are all delivered by Chorus to your ISP using two different types of backhaul products. In the early says of ADSL in New Zealand all connectivity was delivered back to your ISP over the Asynchronous Transfer Network (ATM) network, and delivered to the customer’s premises using a Chorus wholesale product known as BUBA. ATM is now a very old technology and has many limitations, but in it’s day was cutting edge technology. For the past 6-7 years or so we’ve seen a huge shift away from ATM to regular Ethernet, with most ISPs now being delivered most of their connections over a regular Ethernet connection using 1Gbps or 10Gbps fibre links, and the end service delivered to the customer using the EUBA product. The vast majority of connections in New Zealand are now EUBA, however customers who do not live in urban areas and remain on older legacy network equipment that does not support Ethernet backhaul are still on BUBA and connected via the ATM network. ATM is incapable of delivering the same level of speeds and product flexibility that Ethernet offers, but is still required due to the legacy equipment that does not support Ethernet backhaul.
One key thing to remember here is that the Commerce Commission UBA requirements (that Chorus have to meet) say that a UBA connection must deliver 32kbps to a user over a 15 minute average. For all intent purposes this means your broadband connection must be capable of delivering 32kbps to a user, a speed that is typical of a dialup connection. Up until a few years ago this this speed was enforced by traffic dimensioning between the ISP and Chorus (and prior to that, Telecom Wholesale), however with the growth of Internet traffic this speed has been increased by Chorus out of the goodness of their own heart, and right now they deliver a product offering that significantly exceeds their legal obligations. Currently BUBA connections are shaped to ensure 75kbps per user over a 15 min average, and EUBA connections are currently unshaped (any traffic dimensioning will simply be capacity constraints at 1Gbps or 10Gbps ISP handovers). At present Chorus statistics show that the average EUBA throughout is roughly 150kbps per user over a 15 min average that is expected to hit 250kbps within the next year. As part of their proposed announcement regarding new commercial Boost ADSL2+ and Boost VDSL2 product offerings in mid 2014, Chorus offered to increase the BUBA per user dimensioning from 75kbps to 150kbps (nearly 5x the regulated requirement) which would have meant a significant peak time speed improvement for many rural users. After negotiations with the Commerce Commission who deemed that there may be regulatory issues with the new Boost commercial offerings, both the new product offerings and BUBA dimensioning changes were put on hold. Many BUBA users would have benefited significantly from the increased handover speed, so it’s unfortunate for them that this will not proceed.
All of this poses a question that only the Commerce Commission can answer – why in 2015 do they continue to have a regulated product offering that was designed for the Internet of 2005, not the Internet of 2015? Many people mistakenly assume the role of the Commission is to deliver the best outcome and/or pricing for consumers, when in reality their role is to ensure that competition exists in a marketplace, that Government policy is effectively implemented, and to ensure that in monopoly situations that pricing is set that represents a fair price for both parties. None of this will necessarily guarantee the best end product for the consumer. Rather than simply focusing on the price of UBA, the Commerce Commission should be looking at the UBA product offering and reviewing the product requirements of their offering as 32kbps per user no longer meets the requirements of a modern internet. In a nutshell, if you’re in a rural area your BUBA internet is partly being crippled by the MBIE and Commerce Commission who continue to set product specifications for a sub standard regulated UBA offering. The Commission totally took a flawed approach in their recent UBA pricing decision by totally ignoring speed as an input which is something that really defies belief. As an engineer I look at their recent pricing decisions for both UBA and copper pricing and wonder about the technical knowledge that exists both in the MBIE and Commerce Commission as well as the 3rd parties that they rely on for advice.
Now that I’ve discussed the difference between the two products, we need to look at the technical difference between equipment used to deliver BUBA and EUBA services.
EUBA ADSL2+ and VDSL2 services are delivered to customers using an Alcatel Lucent Intelligent Services Access Manager (ISAM). This piece of kit sits in an exchange or cabinet and delivers broadband services to customers connected to it. Many are now fitted with ISAM-V Voice Over Internet Protocol (VoIP) cards to deliver voice services to customers. All ISAMs have Ethernet backhaul over a fibre connection. If you’re in an urban area of New Zealand, there is probably a 99% chance you’re delivered a connection via an ISAM.
BUBA ADSL1 services are typically delivered using an Alcatel Lucent DSLAM – known as an ASAM in the tech world. These are basically “1st generation” hardware. An ASAM typically only sits in an exchange and can only deliver ADSL1 services, not ADSL2+ or VDSL2. ASAMs have both a combination of fibre and copper E1 backhaul over the ATM network. Most ASAM’s are located in non urban areas and a number are still in the process of being replaced by an ISAM as part of the RBI rollout.
Customers who are on a EUBA connection connected back to an ISAM are not going to see their speed constrained or restricted in any way within the Chorus network, while some customers who are on a BUBA connection may encounter issues with slower speeds at peak time due to congestion on both the hardware they’re connected to and the backhaul. What is important to remember however is that despite congestion occurring, your UBA connection will still meet the minimum requirements demanded by the Commerce Commission of delivering 32kbps per user over a 15 minute average. Speed issues will not occur across all UBA connections, and are primarily an issue with customers connected to a Conklin. What’s a Conklin you might ask? Lets start with another history lesson..
There are thousands of rural users who are still connected to a Conklin DSLAM, a device known by many in the industry as a “pizza box” DSLAM due to it being a small rack unit that’s around the size of a pizza box.
Conklin DSLAMs were originally designed to provide broadband service into rural areas where it was typically impossible to install the same equipment that was deployed in urban areas. A Conklin FM2000 could support 4 ADSL customers and support up up 7 expansion cards supporting 8 additional ADSL customers for a grand total of 60 ADSL customers. Some Conklin’s were in areas where the number of customers could be counted on both hands, so it was never cost effective to install the same equipment as urban areas that is designed for hundreds of users. As most cabinets or exchanges that Conklin’s are installed in don’t have any form of fibre connectivity, these units connect back into the Chorus network using copper E1 connections bonded together (a single E1 is capable of delivering 2Mbps). These units support up to 4x E1 connections delivering 8Mbps to the unit which has a maximum ADSL1 speed of 7.616Mbps. In the early days many were only provisioned with 2 or 3 E1 connections, however most now have the maximum 4 E1 connections for backhaul. They were the perfect solution to deliver ADSL broadband to pockets of rural users who would have missed out on broadband entirely had it not been for the deployment of this hardware. Large numbers of Conklin’s were deployed around the country in the mid 2000s, many have now been replaced, but around 600 or so of these still remain, typically serving between 30 and in many cases a full 60 users.
While Conklin’s were a fantastic solution for their time, they are now an unfortunate headache both for Chorus, and for customers connected to them. They only support ADSL1 and with very limited backhaul, many users are now seeing slow speeds at peak times as they all fight for that limited backhaul. While the limited backhaul has never been a major issue, it’s suddenly become one with the mass introduction of unlimited plans which has seen data usage grow significantly. All it takes is a couple of users on a Conklin on unlimited plans to decide they want to download several hundred GB per month, and all users on that Conklin will suffer from a degraded experience as that 8Mbps backhaul connection is shared across up to 60 users. Fixing the Conklin problem isn’t an easy one however – many are being replaced with fibre fed ISAMs as part of the RBI rollout, but once that is complete hundreds will still remain. Why can’t they just all be upgraded? Ultimately that comes down to price, as many of these Conklin’s are in areas where there may be no existing fibre there is simply no way to upgrade backhaul connectivity to support newer equipment. Replacing many of these would cost in the vicinity of half a million dollars each, and it should be very clear to people after recent wholesale price cuts imposed on Chorus that they’re not in a financial position to continue to invest in fixed line infrastructure to upgrade what are largely unprofitable customers – I’m not sure whether any reasonably person would expect Chorus to fully fund upwards of $500,000 to run fibre and provide an ISAM for 60 users who would generate around $2000 per month in revenue. The Rural Broadband Initiative (RBI) wireless rollout was designed to target users in many locations where Conklin’s currently exist and provide them a regulated wireless offering to replace copper.
So what is RBI wireless? As part of the Government funding for improved broadband, the Ultra Fast Broadband (UFB) project received funding to deploy fibre into urban areas, and the RBI project received funding to improve rural broadband. Chorus are in the process of installing over 1200 fibre fed cabinets to deliver ADSL2+ and VDSL2 to rural users to whom copper will still be the primary connection, and are also involved in the delivery of fibre to hundreds of both existing and new Vodafone cellsites that are being upgraded to deliver RBI wireless services. To connect to the RBI wireless service a home owner will need an external antenna and 3G radio that will connect to the mobile network and provide WiFi and Ethernet access around the home with a standard router. At present RBI wireless supports speeds of up to 25Mbps downstream and 4Mbps upstream on a Vodafone RBI cellsite that supports Dual Carrier 3G. With the rollout of 4G services on the 1800MHz and 700MHz band in rural areas beginning to occur, new radios that supports 4G will ultimately be deployed to deliver even faster speeds to customers. While the service has not been without issues it is something that does work well, however uptake has been slower than many expected, in part because of the real world reality that many rural people seem unwilling to accept that delivering broadband to them in a rural area costs significantly more, and many are convinced that they shouldn’t have to pay more than an urban user for a broadband connection.
In many rural areas of NZ that there are many smaller providers providing wireless internet access typically using a combination of 5Ghz WiFi and licenced backhaul using carrier grade equipment. I’m going to miss names if I try and list them, but areas such as Taranaki, Hawkes Bay, Northland and the Central North Island are well covered. There are also many providers in the South Island who also provide such services. These providers will provide service by connecting an external radio on your house that connects back to their network, and will connect to a regular WiFi and Ethernet router inside your home.
If you’re in an area of the country that has service provided by a Conklin or a heavily loaded ASAM and you’re relying on ADSL, the real world reality is you’re not going to enjoy the same great end user experience that around 85% of the country that has a choice of fibre or copper services from a fibre fed ISAM has. Many (but certainly not all) rural users do have a choice of other providers and technologies but many chose to stick with their slow copper connections because they either oblivious to these other options, or quite simply unwilling to pay extra to receive a improved connection. It’s hard to have any sympathy for such users.
If you don’t have a choice of providers then I have plenty of sympathy for you, but delivering improved broadband to such a small percentage of the country doesn’t come cheaply. Many industry commentators and politicians have turned against Chorus in recent years and their financial state isn’t great. Chorus will suffer from slashed revenue due to Commerce Commission price cuts of copper services, and it’s hard to see where Chorus will find funding internally to continue to expand their copper network upgrades into highly unprofitable areas without further funding from the government. My personal view is that rural users should pay more for their services, and if this was the case many rural users would probably find they had a much improved service. Many thousands have access to improved services now, but many simply aren’t willing to move away from copper based ADSL services.
If you’re in an area whether there are no other options your best hope is to write to your local MP, local wireless provider, MBIE and the Commerce Commission asking what can be done to improve your service.If you’re in an area with RBI wireless and are unhappy with the pricing, once again contact the MBIE and Commerce Commission and your local MP to express your issues as RBI wireless is a Government funded offering. It’s also worth approaching Chorus and asking what community contributions may be required to improve services – Chorus are willing to engage with communities and share the cost of upgrades. And last, but not least, the solution for many small rural communities may be a community based network - there are plenty of providers around the country that could be interested in partnering with a community to deliver improved services that could easily be delivered over wireless. Rather than simply accepting the status quo, some of these communities need to look outside the square and adopt the Kiwi number 8 wire approach. Many rural communities have schools that already have fibre connectivity, and in many parts of New Zealand there is existing Chorus fibre infrastructure that can be used to provide services. There are a number of options that can easily leverage this to deliver improved broadband connectivity to entire rural communities for probably not much more than they’re paying now for an existing ADSL based copper connection. With communications Minister Amy Adams announcing a $150 million fully contestable fund for expansion of rural broadband services before the election, it’s also worth contacting her to express interest if you’re in a community and believe you could benefit or want to look at partnering with a provider to develop a community based solution. Solutions are out there – but some may require people to be innovative rather than a gold plated solution being delivered to them.
I hope Russell Stanners had a good Xmas. My new years prediction is that it will be his last one as CEO of Vodafone New Zealand. I also pick 2015 as the year Vodafone could well exit the New Zealand market.
For many years Vodafone New Zealand was the Southern Hemisphere money tree. It was the jewel in the crown of the Newbury based global empire – New Zealand was a far off country where margins were good and the profits kept flowing back to the Northern Hemisphere most years. A blind eye was turned to the operation because it delivered results. Unfortunately that money tree now has a toxic illness. Following in the footsteps of Vodafone Australia which over the course of a few years lost it’s way and has now been haemorrhaging money with no light at the end of the tunnel, Vodafone New Zealand is now following Australia into the same tunnel. Before Grahame Maher was sadly taken from this earth way too early he set up both companies on their respective paths to success. He must now turning in his grave to see what has become of both companies.
In 2012 Vodafone New Zealand purchased TelstraClear for $880 million, a deal that made sense to many, but to others started ringing alarm bells. Telstra had been very frugal in the New Zealand market and their investment had seen traditionally low capital expenditure over a number of years, even when the New Zealand operation was clearly in need of it. Internally inside Telstra many looked at the New Zealand regulatory environment and saw that making inroads was going to be difficult, and that generating a return on large capital investment would probably not occur. Even their plans to build a mobile network were scuttled, part way through the construction of the network in Tauranga the plug was pulled.
It’s safe to say many at Vodafone through the purchase of TelstraClear was a bargain. They inherited a massive nationwide fibre network that would reduce their reliance on Spark and Chorus, a huge residential customer base (TelstraClear had more residential broadband customers than Vodafone) and a relatively large number of corporate customers. Somehow throughout the due diligence process, Vodafone seemed to miss the duct tape that held TelstraClear together. To some TelstraClear was shambolic mess of different technologies, multiple CRM systems and products and services that simply didn’t deliver or work the way they were supposed to. Vodafone did however inherit some fantastic technology – the cable network in Wellington and Christchurch, and the IPTV playout system that now forms the basis of the UFB Vodafone TV offering. They could have done a lot more with this technology, but have chosen not to. They could have done a lot with their Vodafone TV set top box (aka the former T-Box) but chose not to as well. Making the guy who knew all about this redundant during the last round of restructuring before Xmas probably wasn’t the smartest move either.
In many ways however they were too slow at achieving any synergies that should have occurred as a result of the merger, and failed to predict the ruthless cut throat competition that was about to hit the Broadband market in New Zealand. The mass introduction of unlimited plans and price cuts in 2013 and 2014 that have seen retail margins plummet, with many plans only delivering very small margins. Orcon famously said in late 2013 that it took 27 months to make a profit from a customer signed up to a residential DSL based broadband connection.
Buying TelstraClear has certainly burdened Vodafone financially - October 2014 saw Vodafone New Zealand announce a $27.9 million dollar loss – it’s first in 13 years. In the good old days before the TelstraClear merger in 2011 it made a $151 million profit, and sent $130 million back to Newbury. Cost cutting and large scale redundancies have occurred within the company in the past year, and customer service now seems to be at an all time low. Posts of social media suggest average wait times when calling their call centre are often 1hr +, with many people talking about giving up after numerous calls with long wait times.
There have been plenty of rumours over the years about Vodafone pulling out of New Zealand and plenty of mainstream media who have been sucked in by these rumours and written speculative stories. These were all laughable as there was never a reason for Vodafone to want to pull out, but times have now changed. Vodafone sold their Fiji operation in mid 2014, and with Australia showing no sign of a turnaround and New Zealand now facing tough times, it has resulted in some market analysts in the UK now calling for Vodafone to consider it’s position down under. Vodafone Group CEO Vittorio Colao told investors in November that the company would consider selling it’s Australian operation. Logic would dictate that there would be little sense in Vodafone staying solely in New Zealand should it sell in Australia. There is however one major stumbling block – finding a buyer for one (or both) may prove incredibly challenging.
If you’re a Vodafone shareholder you’ll be happy to know Vodafone’s response to it’s financial struggles has been to announce an across the board price increase for most fixed line broadband and phone customers in New Zealand.
As you may have seen recently reported in the media, there have been changes in the industry to the costs of delivering broadband and home phone services for all providers in New Zealand. These cost changes affect the conditions that all providers operate under and unfortunately our prices will need to change to reflect these new conditions.
From 1 February 2015, most monthly fees for our broadband and home phone plans will increase by $4 per month.
People will know that over the past couple of year the price of wholesale access to the Chorus copper network and wholesale broadband services has been under review by the Commerce Commission. As of the 1st December 2014 the wholesale cost of these services was cut, but is still under review by the Commerce Commission who have recommend that the cut now not be as a great as it first recommended. Regardless of the final outcome, pricing will still be cheaper than it was prior to December 1st 2014. In the race to the bottom many ISPs claim they put pricing in the marketplace that factored in greater discounts and that the change will mean prices have to go back up. Spark have already announced some price increases across some of it’s products, but like Vodafone some of these changes are of a very dubious nature including combinations of services that have decreased, not increased in price.
The price of UFB services, and services delivered over their own cable network in Wellington, Christchurch and Kapiti are not affected by the Chorus copper price changes, yet Vodafone are increasing these prices. Adding on $4 per month to these plans and increasing data overuse charges is a pure profit making decision, and to even subtly infer that this increased cost is a related to “industry changes” is quite frankly the biggest (excuse my English) load of bullshit I’ve ever read in a press release. If you’re a Vodafone shareholder it’s probably great news. For Vodafone customers it’s anything but.
If you’re a Vodafone customer wanting to see what your pricing will increase to, you can view it here.
Unless you’ve been living on another planet for the last 18 months, you’ll know that the price of copper based Internet access in New Zealand had been a hot political issue. As part of the separation of Telecom into a retail company (Telecom, now Spark), and an infrastructure provider (Chorus), the Commerce Commission indicated that the cost of copper based wholesale broadband services in New Zealand delivered using the Unbundled Bitstream Access (UBA) product offering would move from a regulated price that was based off a retail minus calculation, to one that was based off a cost plus model. UBA is the regulated wholesale product used to deliver most ADSL, ADSL2+ and VDSL2 based copper broadband connections in New Zealand.
The existing UBA wholesale cost was historically set by the Commerce Commission by looking at the retail price of internet in New Zealand and deducting a % margin from this. It was a very flawed methodology, and one that arguably resulted in New Zealanders paying too much for broadband access for a number of years and restricted the growth of higher data caps. The move to a cost plus model required the Commerce Commission to establish what it believed was a fair price a for providing a wholesale UBA service.
As of the 1st December 2014 there are some very significant changes that will occur to regulated wholesale copper based broadband pricing as a result of the pricing changes set by the Commerce Commission. These changes have resulted in the averaging of prices for rental of copper lines between the exchange or cabinet and premises in both rural and urban areas, with an increase in urban areas to effectively subsidise rural users. It’s also meant a new lower price for the UBA component, with a price set by the Commerce Commission based solely off two other countries in the world – Denmark and Sweden. (I have my own views on the their methodology and the flaws with it, but discussing these isn’t the point of this post!)
**Note that the following prices are the wholesale price paid by your ISP or telecommunications provider and are regulated prices set by the Commerce Commission. They exclude GST, tail services, and all other costs that an ISP will have such as bandwidth, staff costs, marketing etc, all of which need to be added to these to set a retail price.**
The wholesale cost of a standalone POTS line (a regular phone line) remains at NZ$41.50 per month
The wholesale cost of a naked UBA DSL connection (naked ADSL, ADSL2+ or VDSL2) drops from $44.98 to $34.44 per month
The wholesale cost of the POTS phone service when combined with UBA (when your phone line and broadband are with the same provider) drops from $41.50 to $17.98 per month. With POTS phone and broadband from the same provider the total cost is to the provider is the UBA price of $34.44 + the POTS cost of $17.98 per month.
The wholesale cost of clothed UBA product (when UBA is combined with an existing POTS phone service from a different provider) increases from $21.46 to $34.44 per month. If you have a phone and broadband from different providers the total cost is $41.44 to the provider of the POTS phone service provider, and $34.44 per month to the UBA broadband provider.
One significant shift is that the “primary” product being delivered over a copper line is now deemed to be broadband, not voice, meaning that UBA is now deemed as the primary service. Regardless of whether you have a phone line or naked copper broadband, the access cost of the copper line has to be built in to the price. This means that if you have broadband and a phone, that the cost of the copper line will now be built into the UBA price, not the voice price, hence UBA costs are now the same regardless of whether you have a phone or not.
What do these changes mean for me? That’s going to depend on your individual setup.
If you’re a residential customer with a copper home phone line and broadband with the same provider, or you have a naked broadband offering, it’s likely that nothing will change. The wholesale cost of your connection will drop, but due to the highly competitive nature of the New Zealand broadband market and incredibly thin margins it’s unlikely that there will be any significant savings passed on to customers. As this new pricing has been known about since early in the year many providers have already said publically that they’ve factored these reductions into current pricing.
If you’re a residential customer who has a copper home phone line and broadband with a different provider, you’re going to be impacted. There are a lot of residential customers in the country who have their phone line with Spark, and their broadband with another provider. As explained above the UBA product will now be priced the same whether you have a phone line or not, however if you have a phone line and UBA with the same provider the voice service is provided at a discounted price. If you have these with different providers the cost of the UBA service will increase by approximately $13 per month.
A number of providers including Slingshot and Orcon (both owned by CallPlus) have contacted customers in recent days advising that as of the 1st December you will no longer be able to have your copper broadband and phone line with copper broadband with different providers. While this scenario is still possible, the costs of your broadband service would have to increase by at least $13 for them to recover these increased costs. Both Slingshot and Orcon have made the decision to not pass on a price increases to customers, but instead either force customers to move their phone line under their billing control, or let the customer move their broadband to their existing phone line provider, which in most instances will be Spark.
I’m sure in coming weeks we’ll see a lot more providers start to contact their customers and advise of these upcoming changes and present the options to them. There will clearly be many people unhappy about these changes, but you need to remember that these changes (and any possible price increases) are nothing to do with your provider – they are simply making changes as a result of the Commerce Commission pricing changes. As $13 significantly exceeds the profit margins that an ISP would typically make on a customer, it’s unlikely that any would want to simply absorb this increase.
Unless you’ve been living under a rock you’ll know that the Commerce Commission last year announced plans to cut the price of regulated xDSL based broadband products in NZ. UBA (Unbundled Bitstream Access) is the base Chorus wholesale product that every ISP uses to deliver xDSL based broadband (ADSL, ADSL2+ and VDSL2) in New Zealand.
In recent months there has been a lot of discussion within the NZ telco space about Chorus plans to offer a new commercial xDSL based product. This commercial product will offer vastly superior performance than the current regulated offering, but will come at a price premium. Opinion in the industry is split over these moves – some see it as very smart move by Chorus to offer end users an enhanced product; some see it as a cynical move by Chorus to make price cuts irrelevant and force ISPs to pay extra (in effect maintaining the current price) for Boost products to meet the growing demand from data hungry customers.
My personal view is that it’s proof the Commerce Commission are inept and lack any real understanding of the broadband space they’re currently trying to regulate. Essentially they’ve been pwned by Chorus who’s plan is to offer a commercial xDSL offering to ISPs capable of delivering an average of 5Mbps per user over a 15 minute period, while users of the Commerce Commission regulated offering are stuck with an outdated regulated product with a regulated design target of 32kbps per user delivered over a 15 minute period. The fact the Commerce Commission publically see no issue with a handover dimensioning target of 32kbps per user in 2014 shows a real lack of understanding of the industry they’re overseeing.
The Commerce Commission today released the latest Chorus submission on their Boost offerings, which you can read here.
In that submission where some very interesting stats on broadband usage and data caps in New Zealand which you can see below. Namely that:
Chorus stats now put the average NZ internet usage at 41GB per month as of mid 2014
And the following chart showing the mix of caps
As many of those who read my blog will know, I’m passionate about fast internet and truly believe that overall NZ has fantastic internet performance and infrastructure. Sure there are exceptions, but as I’ve written about in numerous blog posts such as this, Telecom spending in excess of $1 billion building a cabinetised FTTN xDSL network has meant around 85% of NZ premises have access to 10+ Mbps ADSL2+, and somewhere in the vicinity of 40% of premises have access to VDSL2+ delivering up to 70Mbps down and 10Mbps up. One of the most important contributing factors to the performance of an ADSL or VDSL connection is wiring, and statistically speaking the most common cause of slow speeds and poor performance is poor internal phone wiring within the home which impacts the xDSL sync rate and performance. People posting on Geekzone complaining of poor performance and finding their internal wiring is at fault is a pretty regular occurrence, so I wrote a blog post last year talking about such issues and explaining why your internal wiring can affect your performance, and why a master xDSL filter is so important to receive the best performance.
Lets make one thing very clear – it’s my personal opinion that a master filter should be mandatory for every ADSL, ADSL2+ or VDSL2 install. With the average NZ home consisting of 3-4 jack points, typically wired in series, typically a mix of master / secondary and 2wire jack points due to age, and often old jack points suffering from corrosion due to the damp conditions of NZ homes, it is the only way to ensure that your xDSL connection is as good as it can possibly be.
If you don’t have a phone and have a naked xDSL connection, wiring your modem directly to the incoming jack and disconnecting all internal wiring will achieve the same effect.
When VDSL2 was soft launched by Telecom Wholesale (prior to the separation and creation of Chorus) there was no requirement for a xDSL master filter to be installed, however it was recommended by most ISPs offering the service that a master filter be installed at a cost of $199. Many people chose not to pay this cost, and while some people found their VDSL2 connection ran smoothly, many found the exact opposite and required a master filter to be installed to make their connection stable.
When Chorus launched VDSL2 as a commercial offering in mid 2013 their pricing model changed to ensure that every VDSL2 connection included a master filter so that every user received the best possible connection speed without having an additional up front cost that may put them off. Rather than the home owner having to pay a $199 up front cost, it was built into a small monthly fee that was charged to the ISP to be recovered over 30 months. Every ISP simply built that cost into their VDSL2 pricing.
In early 2014 Telecom decided to launch a new low cost ISP to compete against flat rate offerings from Orcon and Slingshot. Since Telecom themselves don’t see a flat rate pricing model as sustainable, it wasn’t surprising that a new brand was created for this offering. Bigpipe was born, offering cheap internet and using a Carrier Grade NAT (CG-NAT) solution to offer service due to the looming shortage of IPV4 IP addresses. To compete on price, Big Pipe have decided to cut costs even further by not offering a master filter as standard, saving themselves a few dollars every month. This means that some customers being installed are receiving a sub standard connection.
There have been several posts in recent weeks on Geekzone from new Big Pipe customers who have had new VDSL2 installs and are suffering from poor performance. One was fixed by Big Pipe sending Chorus around to install a master filter. What is most remarkable however, is the Big Pipe attitude towards a master filter. To quote a Big Pipe representative in this thread
However, I should point out that a master splitter is not required for VDSL in most cases. It will certainly help (in some cases help a lot), but it isn't absolutely necessary except in rare cases.
To be honest this is complete and utter bullshit and really shows a total lack of understanding of how xDSL technology works. If this is the sort of advice that Big Pipe are dishing out, I’d be recommending that they be avoided at all costs.
A xDSL master filter is not going to fix every problem, and there will be some premises close to a cabinet or exchange where performance may be fine without a master filter. To say that this is “most cases” however is just plain wrong. A master filter is the only way to eliminate reflections caused by internal wiring, and it’s also the only way to ensure that your modem isn’t unnecessarily transmitting at a higher power level than required. One thing that has been happening in increasing numbers lately has been a gradual reduction in VDSL2 sync speeds as more customers switch to the technology as a result of cross talk occurring in cable bundles between the customer and the cabinet or exchange. Poor quality connections can make this problem worse.
If you’re thinking of switching to Big Pipe it’s very much a case of buyer beware. Yes you’re getting a cheap connection, but you’ll need to ensure your internal house wiring is up to scratch, either by sort your own internal wiring, or paying Chorus or a 3rd party to visit and do this. Any prospective users will need to weight these risks up before signing up, especially when competing offers from other ISPs typically include the professional installation of a master filter by Chorus in the price.
Update: As of 11:30am Stuff have now updated their page with a red “OPINION” heading at the top of their article. This was not present initially.
Journalist Colin Espiner has written an article today on Stuff discussing the current topical debate around Chorus. The issue with Chorus is a highly complex one, and in reality most people have very little understanding of the actual issues at stake here. The Stuff article really is all the proof you need that a) mainstream media really can’t be trusted as an accurate source of factual information and b) the issue is a very complex one.
Rather than breaking copyright and including the whole story I’ll simply correct the inaccuracies and misinformed statements in the article, which you can read in full using the link below.
Chorus has claimed it'll go broke if it can't charge as much as it does now and has asked the government to step in.
Chorus have never claimed this. I challenge Espiner to provide a source for that claim or retract it.
What is Chorus?
Chorus is a private, NZX-listed company that owns the copper lines that connect your house to the telephone exchange
There is much more to Chorus than simply copper lines. Chorus is an infrastructure provider that owns the copper cables running to your home, known as a metallic path facility (MPF) in the telco world. Chorus also own hundreds of telephone exchange buildings around New Zealand, a nationwide fibre network (some of which is shared with Telecom still), and over 4000+ fibre fed roadside cabinets used to deliver phone and broadband services across the country. Chorus don’t own the actual NEC NEAX telephone exchange hardware that delivers telephone services to most customers (these are owned by Telecom), but they do own the equipment used to deliver wholesale broadband services to customers of every Internet service provider (ISP) in the country. This piece of equipment is known as an ISAM, DSLAM or ASAM.
What the heck is local loop unbundling?
Ever had a peek inside a telephone exchange? Seen all those thousands of wires in pretty colours? That's the local loop. When Telecom owned it, it could charge what it liked to provide access to internet providers. The Government legislated to put a stop to this by allowing any provider access to the copper wires.
So what's the Commerce Commission doing setting the price Chorus can charge? Good question. The problem with local loop unbundling is internet and telephone service providers complain the price they're forced to pay Chorus for access - $45 a month - is too high. The Government threatened to intervene and regulate the charges but the Commerce Commission got in first with its own determination, setting the price at $34.44.
Great, that means I'll soon get cheaper broadband? Yes, but only if providers decided to pass the cut on to customers rather than pocketing some or all of it. And assuming the determination isn't appealed by Chorus. And always assuming the Government doesn't step in and over-rule the commission.
This is plenty of confusion generated here by Espiner. What’s important here is that the current Chorus debate does involve local loop unbundling pricing, it’s not in the way Espiner has described.
Technically speaking the local coop is a term for the copper MPF that runs from an exchange or cabinet to your premises.
Local loop unbundling allows any ISP or telecommunications company to rent space to install their own equipment in a Chorus exchange or cabinet and use a Chorus MPF to deliver broadband and/or phone services to customers. A number of companies have chosen to install their equipment into Chorus exchange buildings and at present just under 50% of the total number of customers services by Chorus have the potential to be delivered an unbundled product. At present no 3rd party has any unbundled equipment in any of the 4000+ Chorus roadside cabinets as the business case for doing this simply doesn’t stack in, in part due to equipment costs and the smaller number of customers served by a roadside cabinet, and in part by the Commerce Commission regulated cost of backhaul from the cabinet which would see any additional provider having to share backhaul costs equally with Chorus which is not viable.
The current cost of an unbundled MPF is $19.08 for an urban area and $35.20 for a non urban area. In December 2012 the Commerce Commission set in place a move to average both of these costs out and from December 2014 a price of $23.52 will apply to both urban and non urban areas.
For an ISP to deliver Internet and/or phone services over an unbundled MPF they need to install their own equipment into the exchange and pay the associated fixed prices for extras such as rent, power and backhaul.
The $45 price referred to by Espiner is the cost of an ISP delivering a wholesale Unbundled Bitstream Access (UBA) product which is currently set at $44.98 per month. This price covers the cost of the MPF and a port on a Chorus ISAM, ASAM or DSLAM that is used to deliver Internet to the premises.
An ISP has two choices to deliver Internet access to a customer. They can pay the UBA cost to Chorus for a wholesale service, or they can choose to install their own equipment into an exchange and offer an unbundled service. Providers such as Vodafone, Orcon, Callplus and Compass have chosen to install equipment in major exchanges. Most other providers (including Telecom) rely on wholesale UBA services to deliver Internet access to their customers.
The current Chorus debate revolves around the price Chorus are allowed to charge for the UBA service from December 2014. This price will consist of the cost of the MPF which will be set at $23.52 from this date, and the cost of providing the Internet access from a port on the ISAM, DSLAM or ASAM. The Commerce Commission originally believed in it’s first draft document that this cost should be set at $8.93, giving a total of $32.45. On Tuesday the Commerce Commission announced a final decision and increased this cost to $34.44
A brand new Alcatel Lucent 7302 ISAM used by Chorus costs many tens of thousands of dollars. At the end of the day there are very few of us who are aware of what the true cost of providing this post actually costs.
Was it a smart idea for the Government to contract the provider of the copper wire network to also build the new fibre-optic network?
No, it wasn't.
Without providing any evidence to back such a claim it can be viewed personally as a matter of personal opinion. My personal opinion is very different - awarding Chorus the contract to deliver UFB was a very smart move.
New Zealand already has a world class broadband network (something I recently wrote about here) with over 80% of premises having access to 10Mbps+ ADSL2+ downstream speeds, and just under 50% of premises having access to VDSL2 delivering anywhere between 30Mbps and 70Mbps, but more importantly delivering up to 10Mbps upstream (ADSL2+ is only capable of delivering up to 1Mbps upstream). Telecom spent well over $1 billion deploying over 3500 fibre to the node (FTTN) roadside cabinets around the country to deliver this. This network was designed and constructed with a full fibre to the home (FTTH) network in mind, meaning that existing pits, ducting, fibre and equipment can be utilised as part of the UFB FTTH rollout and not unnecessarily replicated. Why reinvent the wheel (and pay for it) when you’ve already got many of the components for the wheel?
Ultimately fibre will replace copper, however unlike Australia who announced plans to decommission the copper network 18 months after fibre was deployed, no such plan was put in place here. With Australia’s nationwide fibre network now possibly on hold to to a change of Government, it’s likely that by 2017 Australia will have a FTTN network delivering similar capabilities as NZ’s FTTN network which was finished in 2011.
Chorus isn't exactly incentivised to drop its copper network prices because it wants to sign more customers up to its more expensive fibre system. Which won't happen if "traditional" copper network broadband is priced too cheaply.
The $37.50 entry level price for a UFB plan was originally set to undercut existing UBA copper services meaning their would be an incentive to move away from copper to fibre as the price would be cheaper. The $37.50 cost also included a voice port in the Optical Network Terminal (ONT) meaning that both Internet and voice services could be delivered to a customer at a wholesale cost around $20 less than a traditional copper MPF delivering UBA and a POTS phone service from a NEAX.
I'm happy enough with my current broadband connection. Do I really need UFB anyway? Well, that's the problem. Not only is UFB extremely expensive to install (the Government has budgeted $1.5b) and time-consuming to roll out (it'll take another 10 years or so to finish) but only 75 per cent of homes will be covered by fibre in any case - and none in rural areas.
The loan to Chorus was nowhere near the true cost of the UFB rollout. That’s still going to be somewhere in the vicinity of $2 - $3 billion dollars, with a true cost very difficult estimate at this time. Costs associated with the UFB rollout have escalated wildly, with costs currently running as high as $3000 per premise passed to deploy the ducting. There are then the costs of installing the fibre to the home, which in some cases is still topping $2000. The loan Chorus received from the Government is less than half of the actual cost of the UFB deployment.
The UFB rollout will be complete by 2019 and will cover around 75% of premises in the country. Many areas that did not receive fibre will receive upgraded services by way of the Rural Broadband Initiative (RBI) project delivering upgraded copper services and wireless broadband access to those where delivering fibre services is totally uneconomical.
Are there any disadvantages of going to UFB? Apart from the higher price per month, and not being in a big centre, there's likely to be higher connection fees associated with getting linked into the fibre network.
Plus, something that hasn't had much coverage - once you ditch the good old telephone lines, stuff you're used to like caller ID and using the toll provider of your choice will no longer be available. Telecom's fine print states if you're on fibre you can't use anyone else for cheap tolls.
As pointed out above the cost of fibre was set to undercut existing copper services. The argument against the Commerce Commission cutting UBA costs is that setting these below UFB costs will inhibit UFB uptake as many people will simply opt for the cheapest Internet plan available. With installs for UFB still free for most users until at least 2015, there are no “higher connection fees” associated with moving to fibre.
A user moving to fibre will find their regular phone service is replaced by a carrier grade voice over Internet protocol (VoIP) service. A provider offering UFB services has two ways of delivering phone services – using the voice port on the ONT, or by using voice ports in the ISP supplied router or residential gateway (RGW). This is the approach currently being taken by providers such as Snap and Orcon who deliver voice services using their Fritz!box and Orcon Genius gateways. The good news is that usual smartphone services like CallerID and voicemail will still continue to be available. Any such fine print about “cheap tolls” is also rather meaningless. If you don’t like Telecom’s products, services or price then don’t sign up with them.
In the meantime, you can impress your friends with how much you now know about the current debacle.
You might try and impress your friends, but if it’s using information from Epiner’s story you’ll probably just make a fool of yourself, especially around others who do understand the telco space, so be careful who you try and impress..
How competitive is NZ’s residential ISP market? This quote from Orcon’s recent submission to the Commerce Commission offers some insight:
Margins in the broadband world are incredibly slim. Currently, Orcon needs to retain a UBA customer for 27 months to recover setup and marketing costs, before it makes a single dollar off that customer.
A comment like that really does make a mockery of the recent claims by Axe the tax campaigners that any reduction in Chorus wholesale UBA costs would be passed through to consumers.
With margins this slim would any ISP realistically pass these through in full? Any smart business would be pocketing some (or even all) of the reduction in the hope of reducing that insane 27 month period down to something a little more realistic.