Tag Archive for 'llu'

It was never about competition

Published by The Unreasonablemen on April 7, 2008 in Business. 0 Comments

In case you were wondering. The Labour government has zero interest in improving the broadband situation in this country.

This report on the line just shows that the whole operational separation is a political exercise. The reports here were obtained under the official informations act…

The report, dated five weeks before Telecom publicly announced the extensiveness of its FTTN plans and three weeks before the release of the final LLU STD, advised Cunliffe that FTTN is generally considered to be “the death-knell” for a LLU regime. Written by MED manager ICT regulatory team Reg Hammond, the report advised that a gradual deployment of FTTN is “the most effective means of maintaining efficient investment incentives” for industry players.

If the Commission made a slight change to the STD without public consultation, it would be immediately picked up by the industry and would be akin to an announcement by the government that it intended to accelerate FTTN. “While this would stall investment by access seekers in LLU it may be more palatable than allowing access seekers to invest in LLU and then making an announcement at some later stage,” reads the document

Following the official news of the extent of Telecom’s cabinetisation plans, Telecom CEO Paul Reynolds sent a letter to Cunliffe saying that he was “genuinely taken aback” by the industry’s negative reaction. “As such, we think the accusation that we have been hiding information and gaming the situation is completely baseless and unfair,” reads the letter obtained under the Official Information Act.”

Couple that with this on stuff, with IDC stating that operationally separating Telecom won’t reduce the incumbents dominance. (I’ve written before on the unreasonablemen.net about how markets operate)

In case you forgot, its an election year….

So just a bit of time to ask yourself, has all this kerfuffle changed your perception of Telecom? and …while you were focusing on hating Telecom did you forget the promised tax cuts? that AU GDP and standard of living had gone up again, that interest rates had sky rocketed, that kiwisavers a huge flop (in terms of implementation), that compliance costs on SMB’s have gone up…..hmmm interesting…..Maybe the Government got what they wanted after all….

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Isn’t the answer mobile?

Published by The Unreasonablemen on April 1, 2008 in IT, New Zealand, Society, Strategy and nzwc. 11 Comments

Before I start, let me just say I’m not an engineer, so if I get some of the technical bits wrong, forgive me. But I genuinely think I’ve got the ramifications correct!

There’s been a fair amount of debate about how NZ gets better faster broadband. This isn’t a simple proposition and much of it has been made even more complex because of politicalisation, poor press leading to general acceptance that Telecom New Zealand is ‘bad’ (just look at the sensationalist title to this), ignorance and a real clouding of issues.

So lets separate out the issues. Jim Donovan provides a nice synopsis of the issues as Rod Drury sees them. In my opinion there are a lot of issues tied up even in this.

Firstly can we accept the fact that Telecom is a public company and as such will try its best to make a profit for its shareholders, (which incidentally includes just about everyone in NZ with a managed fund, the point being you are doing yourselves out of your retirement dosh!). The implications of this are that they are legally obliged to invest their shareholders money to get the best return possible…which may not always be what people think is ‘good’ for the country as a whole.

Having multiple international trade routes is different from national data speeds. It’s a damn good idea and should just happen ala Google.

Next, lets address national data speeds. There’s a lot of apples with pears comparisons with other nations out there. These nations don’t have our population levels or distribution, so doing this isn’t that valuable. Benchmarks are good, but how about making them meaningful (as opposed to a political weapon).

Lets look at broadband. Everyone is talking about fast ‘broadband’, but what they really mean is fast internet connectivity - give me the webpage I want faster, upload my stuff faster…. Semantic, but important difference.

Broadband in common use means an ADSL connection. ADSL is effectively compressed data travelling down the same copper as you use for a phone line. Broadband in other countries means other things like cable, Fibre and other technologies. The whole broadband thing became quite topical when the government noticed that people might be pointing the finger at them for our slow movement down the OECD averages for income and wealth. They also noted that the countries moving up that list had higher penetration of faster internet technologies than us and viola, it became an election issue.

If we take a stick to Telecom, make them the bad guy people won’t point at us anymore. This conveniently neglected other things like company tax, RnD, incentives and funding for start ups, tax breaks for international tech companies etc. Anyways, the end result was that in a knee jerk reaction to get the monkey off its back Telecom agreed to invest in its fixed line business to the tune of $1.4bn. The point of this investment is to shorten the loop between the point where the core network (fibre) stops and the copper (last 2km - the bit to your home) starts. This shortening reduces the distance impact and will provide greater speeds (10mbps) to the home and …. no one will be happy with the result. It still won’t be fast enough (here for religious screaming from the left, here for business impact).

This type of disappointment will mean more Telecom bashing, closely followed by the realisation that the loop distance needs to be reduced to about 800m. That means more cabinets (I’m told 3 times as many, and another $700mill). And get this, this additional investment will only give data speeds of up to 20mbps… more disappointment !!! Which gets you to the point where you realise you need Fibre to the home. I heard that the last time Telecom looked at that it was going to cost circa $10bn to deliver. So that’s just not going to happen (as Paul Reynolds has already said).

Or, you try a different approach.

Think about the world we live in, most people have telephones they carry around with them, notebook sales outstrip desktops, pda’s, ipods, WiFi in the home… its all about untethering the cable…or simply being mobile. Why then are we trying to solve the issue with redundant technology when the requirement is just for fast internet speeds.

Here’s my hypothesis. The network you think of as mobile, isn’t really mobile. It’s a fixed backhaul network with cell towers attached at the end to deliver the last mile. If you think about it, its identical to your home WiFi network and we love those!

Why then don’t we leverage the fibre to the cabinet programme, turn all those cabinets into a cell site and start thinking about fast mobile data technologies like LTE. I know its not a ratified standard (others are though and they are quite quick!), but it is already demo’d as doing 150mbps. That’s 15 times what cabinetisation is going to deliver to the home…. Isn’t it about fast internet, not copper or fibre. I know there is a pricing issue, but scale will bring that down….

Thoughts?

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