Hard News by Russell Brown

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Hard News: Shooting for the Moon

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  • Paul Brislen,

    @Rich, Oh sure it is... but I'm curious what people who seem to actually care about such things would pay.

    The assumption seems to be that customers who receive a faster connection speed will pay more for it. That's not true in my experience, instead they (we) say things like "finally I'm getting what I've been paying for all along" or similar.

    The idea behind the Institute FibreCo model, and the National Party's fibre build, is that there will be a greater return on investment (As I understand it - someone tell me if I'm wrong) than is currently the case. I just don't see that happening.

    Auckland • Since Nov 2006 • 200 posts Report Reply

  • Matthew Poole,

    OK. Orcon used to offer max/max ADSL with 100GB data allowance for $200/month. That's no longer available. Their replacement is a "starting rate" of $120/month with 25GB, and that's on their ADSL2+ service. I find it utterly absurd that all we see in this country is faster speeds for higher prices and the same or less data.
    XNet offer plans that will allow well in excess of 100GB downloaded for a lot less than $200/month.

    Yes, I'm not prepared to pay a huge amount (but remember for the average kiwi the fact that I'd be prepared to spend $175/month for an internet connection makes me a total fruit loop) for that kind of speed. Because speed alone is worthless if you can't do anything with the connection. I used to joke back in the day, all of about two years ago, that when Telecom finally allowed maximum rate DSL it would be accompanied by a 100MB cap after which you'd be throttled to something approximating slow dialup for the rest of the month. That's still the mindset that appears to exist when plans are formulated by ISPs in this country.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • A S,

    so I reckon it's going to be at least 60ms

    60ms to US servers would be absolutely bloody fantastic. Anything has to be better than what we get now, even on cable, I get anywhere between 160 and 300ms. 60 is what you get to NZ servers a lot of the time.

    Wellington • Since Nov 2007 • 269 posts Report Reply

  • Peter Ashby,

    There is also the small matter of the history of cable in the UK. If it wasn't for the leveraged takeover it would be a dead duck with the companies bankrupt. Before the Virgin branded merger Telewest were just about doing it but NTL was in trouble. They are primarily pushing multichannel TV in competition with Sky and aren't anywhere near universal.

    So unless the new fibre is going to carry far more than just broadband, which makes looping it rather than a star config look dodgy. Then no commercial operator will want it. BTW what's up with running it along the sewers?

    Dundee, Scotland • Since May 2007 • 425 posts Report Reply

  • Paul Brislen,

    Heh, you're a spring chicken. I got my first full rate ADSL connection from Telecom back in the day (2000) and it came with a whopping 600MB of data A MONTH!

    One month I foolishly downloaded a Windows update for both PC AND work laptop. Boy, the editor was ropable at the cost.

    To this day Telecom still advertises JetStream 30,000 wherein you can buy a full speed up/full speed down connection with 30GB of data for only $2400 Plus GST a month. Link here: https://www.telecom.co.nz/form/1,3905,4468-1424,00.html
    although I doubt anyone's buying that particular plan.

    I did have a good shouting match with Simon Moutter about it once - he refused to accept that Telecom ever sold such a plan. He refused to look at the laptop when I showed it to him. Good times.

    Auckland • Since Nov 2006 • 200 posts Report Reply

  • Matthew Poole,

    Briso said:

    The idea behind the Institute FibreCo model, and the National Party's fibre build, is that there will be a greater return on investment (As I understand it - someone tell me if I'm wrong) than is currently the case. I just don't see that happening.

    Network infrastructure isn't something that should generate spectacular returns. It's meant to be a safe investment, not an especially profitable one. Pension funds invest in network infrastructure, people wanting high growth don't.
    The whole point of a national fibre company is that it would be somewhat freed from the expectations of high returns that plague retail telecommunications. Telecom is, in part, hamstrung by the fact that it's lead its shareholders to expect, if not demand, good stock growth (up until the unbundling announcement) and high dividends (which it still returns). A properly-run (ie: not gouging the fuck out of the market) telecommunications network doesn't lend itself to that approach. If the network can be laid and operated by a company that does nothing else, it doesn't have any expectations on it to contribute lots to the bottom line. It just has to plod along, doing what it does, doing it well, and giving everyone access.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole,

    Heh, you're a spring chicken.

    Not in the least. I've been around for the majority of the time the internet has been commercially available in this country. I was just illustrating how recently it was that we were getting shafted on even basic speeds, never mind real broadband.

    The OECD working document that someone posted is interesting. It suggests that their definition of broadband for the period 2010-2020 will have to be revised from the current 256kbps to 50/20Mbps. We've got the head of Chorus saying that, in essence, 20Mbps should be enough for anybody.
    We're fucked :/

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Paul Brislen,

    Ah, the complete company split approach. Years ago I interviewed an interesting fellow from the Gallagher Group called John Third who advocated just that: network company would earn low rates of return but sure and steady... retail would be freed from the cost of supporting the network company for its high rates of risk and return.

    It's a great model. It makes a lot of sense, but you still need a customer willing to buy service (presumably a three tier model - network, wholesale, retail, or two-tier, network/retail) and that's going to cost more than $150/month I would think.

    http://computerworld.co.nz/news.nsf/news/ECBD4FBC63F7686FCC25715D007DC4F6

    for those interested in the darkest deepest history.
    Of course, Telecom called me a communist when I suggested it. Rod Drury suggests it and he's a visionary! Timing is so very important.

    Auckland • Since Nov 2006 • 200 posts Report Reply

  • Paul Brislen,

    @Poolester

    Not implying you're young. Why just this week I've been called middle aged. Harumph. Just that I too remember the Dark Days.

    But don't lose hope - the head of Chorus doesn't have the final say on the matter. That's why it's important we don't undo all the LLU work that's FINALLY producing a result only, what, seven years after it was first proposed. Any FibreCo will take a decade to deliver - what are we going to do in the mean time? We're going to use the copper and make better use of it and if Telecom wants to offer a service then it's welcome to join in.

    Sorry... soap box. Not an official view. Better stop now. Gah, this is hard.

    Auckland • Since Nov 2006 • 200 posts Report Reply

  • Yamis,

    Seoul is damn near 'hollow' underground.

    There's about 400 subway stations plus there's the tunnels running between them, not to mention the hundreds and hundreds of underpasses, underground arcades, building basements etc.

    In terms of terrain, it is surrounded by rocky mountains but the built environment is reasonably flat, sitting on the Han River flood plains and lower foothills of pukansan (mountain) and friends.

    But with 10 million people in an area that is smaller than Auckland you are taking the piss using it as an example. There are thousands or apartment buildings with the average complex having 20 floors with about 50 people living on each floor and they are all right next to each other.

    My street in Massey looks nice without powerlines and I always notice streets that do have them. Ugly, no thanks. Bury that shit.

    Since Nov 2006 • 903 posts Report Reply

  • Yamis,

    Oh yeah, and this goes on in Korea too...

    http://farm1.static.flickr.com/53/193930371_6e215b8c14.jpg?v=0

    Since Nov 2006 • 903 posts Report Reply

  • A S,

    So, if it came down to it, would you say no to 100mb FTTH (for arguments sake), if you had to have a few poles down the street?

    I'd say bring on the poles.

    A pole with a couple of wires on it would not be especially important overall surely? Kind of like how we'd all like that nice tarmac on the road outside, but instead we end up with that nasty hotchip. Upshot is, we've got a well engineered road, capable of all handling all the traffic we could throw at it, but it just doesn't look as pretty as the more expensive option.

    Wellington • Since Nov 2007 • 269 posts Report Reply

  • Matthew Poole,

    AS: much of Auckland, and by that I mean Greater Auckland, doesn't have overhead wires. In a lot of places we don't even have anything except lamp posts. Yes, people would say no to having them back again. They're thicker than phone lines, for a start, and people like the clear sight-lines they currently enjoy.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • A S,

    Then all I can say is, thank god that Welly and its outer burbs aren't hamstrung like akld.

    Sounds like the odds of ever getting decent fibre up there is somewhere between zero and none. Sad really. But on the upside, as I said earlier, roll out the fibre to the rest of us, we're easier and much, much cheaper to hook up :-D

    Wellington • Since Nov 2007 • 269 posts Report Reply

  • Yamis,

    Thanks for your concern AS.

    We paid to bury our powerlines and we can pay to bury these too.

    Powerpoles are like so last century.

    Since Nov 2006 • 903 posts Report Reply

  • Matthew Poole,

    Fibre will be coming here at the same rate as everywhere else, if not faster. We're three times the city Wellington is :P

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Don Christie,

    Ok, I am in Sydney at CeBIT. Interesting lunch-time talk from the CEO of G9 about Australia's RFP for the $4.5 billion fibre role out (that's the Government component).

    Two points.

    1. This is happening in Australia, and it going to happen fast

    2. There is a huge issue between Telstra and the rest of the industry. Think Telecom is bad, they are still in nappies compared to the badness of Telstra. That being said, the view here is that operational seperation for this infrastructure is critical.

    Telstra disagree. They want to build the network, own it and make an 18% after tax profit. It will be interesting to see what pans out.

    My final point is, NZ has to do something and quickly. To be honest, National (and maybe Labour)'s timeframes sound way too long.

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • Russell Brown,

    Think Telecom is bad, they are still in nappies compared to the badness of Telstra.

    I think we have to get used to assuming, at least by default, that Telecom is not bad. Because the whole purpose of the separation undertakings is that Telecom won't be bad any more. There are even whistleblower provisions in the way the Independent Oversight Group has been constituted.

    If it turns out to be a bunch of crap, then fuck 'em. And I understand Vodafone's annoyance at the sudden movement of the goalposts that is the cabinetisation project. But on a consumer and infrastructure level, new cabinets are good.

    That being said, the view here is that operational seperation for this infrastructure is critical

    Telstra disagree. They want to build the network, own it and make an 18% after tax profit. It will be interesting to see what pans out.

    Hmmm ... Whereas, for infrastructure, 7% pa over 20 years is more the game. A single provider for network, wholesale and retail really might come back to bite them ...

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • Matthew Poole,

    18% after tax?! Find out what they're smoking, and smuggle several container loads back here. You'll make a killing!
    Most telco's would desperately love to be making 18% gross ROA on their networks, never mind 18% net. That's Peter Pan shit.

    As for the timeframes, they are in part dictated by the realities of getting it done. We don't have the ducting kit, we don't have the people. Business-as-usual stuff still has to happen involving the existing fibre networks installed here, so simply stripping all staff and equipment from everything else and putting them to work on FibreCo (for want of a better term) just can't happen.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole,

    If it turns out to be a bunch of crap, then fuck 'em

    The peering announcement makes it appear that they're at least trying. But it's still stupidly difficult for my inner cynic not to look at the "we expect roughly equal bi-directional traffic flows, but we're only going to put DSL customers on it" thing as a way of "proving" to the regulators that neutral peering is a total gyp because Telecom just ends up having to deliver everyone else's data without getting paid for it (yeah yeah, I know).
    I want to believe they've changed and get it, I honestly do, but it's incredibly hard to put aside their historic attitudes and outright disdain for everything except milking every last dollar out of NZ.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Steve Barnes,

    We are already seeing fibre to the node being rolled out by TCNZ and by the time anyone gets around to running FTTH we could have Gigabit WiMax so why arn't we looking at WiMax from the cabinet. I wonder sometimes why people listen to politcians promises in an election year. It's all bull.
    I approached Aucland City Council with a fibre through the sewer proposal a couple of years back and was met with a bunch of excuses that make me cringe to this day.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Don Christie,

    Matthew, that's the figure that was touted in today's talk. The claim was Telstra expect these huge profits to compensate for the inevitable loss of monopoly in the copper infrastructure.

    Telstra are very powerful player here. If the election had gone the other way I have no doubt they would have prevailed. Even now it seems the jury is out on the eventual result.

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • tussock,

    Please, people pricing bandwidth, regarding the data "caps", make the payments a proper small amount of 0.xx cents/MB or whatever. I know tricking people into using more than they'd expected and then paying more for what they don't use is your revenue model, what with you all being phone companies and all, but it's kinda Evil.

    If you, say, had no variation in cost by bandwidth (other than installation of course), and didn't artificially cap it at all (always burst to the limits of the hardware and network), you'd be stuck competing on data charges, and would earn customers by offering superior connection speeds in each area.
    Now wouldn't that be an nice buyer's market.

    Hmm, I was thinking 50c/GB might be reasonable and http://www.wic.co.nz/ourplans.php suggests that's possible right now in city for the hardcore Dunedin user. Are those cable things just a really bad idea in the first place? Will they ever do that sort of price? What do the telcos pay for international data anyway?

    Since Nov 2006 • 611 posts Report Reply

  • Peter Ashby,

    Jeez you people are too conditioned by the borked marketplace you inhabit. Here in the UK the deal is UNLIMITED broadband, if that is not your offer you are not in the fixed line marketplace but a subset of the mobile one. Sure we get 'traffic shaped' if we restrict others on our nodes with very high bandwidth and if you complain often enough they 'allow' you to upgrade your package and this funds a faster link in the local cabinet so everyone wins.

    Since we got broadband (cable) our speed has doubled three times for no extra charge. Offering unlimited broadband would be a killer marketing advantage so I am stumped as to why nobody is offering it to you. From over here in the UK it all looks very, very, very primitive and one of the expected big downsides when we finally come home.

    Dundee, Scotland • Since May 2007 • 425 posts Report Reply

  • Che Tibby,

    Here in the UK the deal is UNLIMITED broadband

    i think peter is thinking the old ihug model.

    and i say, why not?

    the back of an envelope • Since Nov 2006 • 2042 posts Report Reply

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