We don’t appear to be getting much closer to a workable solution on how to roll out ultrafast broadband to the nation.
Every person I speak to, every event I go to, is consumed with doubts, questions and concerns.
The biggest issue is what role Telecom, or a split of part of Telecom, will play in the rollout.
Because there’s a closed tender process underway there is no ability for a public discussion led by our government to be had on this issue.
Telecom is trying to work out how to structurally separate and qualify to get a large piece of the action on the UFB rollout. They don’t want to go down this track without some certainty as to how it will radically change the company.
The government wont give them certainty because there is a tender process underway.
The conundrum, as was pointed out succinctly last week on an InternetNZ blog post is this:
…there is a chicken-and-egg problem on the separation front. Telecom as a vertically integrated firm can’t participate directly in the UFB. But Telecom probably can’t make the economics of separation work unless it has some kind of assurance that its separated network business will be a lead player in the UFB.
Here’s some other views being put out there:
New Zealand needs fibre and we need it soon. We cannot wait much longer to have a comprehensive plan. It’s been almost two years and the government is in a quandary.
That’s not good for NZ, nor for the industry.
It’s not in New Zealand’s interests for Telecom to be run into the ground and excluded from the biggest network build for the next generation (or more).
But it’s not in NZ’s interests for Telecom to be in a position to bully the government or the country into it participating in a way that’s about its own vested interests. New Zealand’s interests are paramount.
There’s all kinds of speculation about what discussions have been occurring with Telecom over the last 19 months.
Tom Puller-Strecker in today’s DomPost is attempting to get to the bottom of this. As usual Joyce is keeping all his cards close to his chest. Does he have something to hide?
There are concerns that the level of private investment available for UFB is not enough to make it work. The government has shifted the goalposts on its tender to allow local fibre companies to provide Layer 2 services as well as Layer 1 on the fibre network.
Layer 1 is the fibre cable in the ground or strung over poles, while Layer 2 lets the supplier add the electronics at both ends of the fibre and means retail providers can use it immediately and supply products to end users.
Essentially this is changing the terms of the tender. The industry seems to welcome it as a sensible move. But there’s a number of issues that lie behind the recasting of the tender which raise more questions.
The small amount of public discussion that is occurring indicates that the debate is shifting to a question of whether $1.5 billion is going to be enough to deliver on the government’s objectives (taking into account the 1:1 private investment). How will reshaping the tender affect this? It doesn’t appear clear to the bidders.
Questions about the role of the Commerce Commission and their ability or otherwise to regulate these networks in the public interest.
And if, as Joyce has said, the government hasn’t ruled out taking an equity stake in Chorus, what would that company look like? And could we end up with an unregulated monopoly that is largely privately owned? Who’s interests will that serve?
Internet NZ’s two concerns are very valid.
They warn against:
- making policy deals or regulatory deals behind closed doors
- changes to the current tender process that undermine the efforts people have gone to in making bids
What’s in the way is the closed tender process and the inability for frank public discussion to occur. What does the government think? What does Steven Joyce want?
Whatever happens, we must make this about New Zealand’s interests. And we must make sure that there is an open access network and that real competition can occur.
Telecom needs to state its intentions to the nation. But the government needs to be more upfront. This is public money. And it’s the nation’s network.
Telecom is a privately owned company and have acted within their own interests for years. Thus, I don’t see a question as to what Telecom’s role will be. If they chose to restructure in order to try and reposition themselves to be able to bid for contracts, then all the good for them. But the decision must ultimately be, “does the bid address the ends of the contract competitively?” It’s not the NZ government’s place to speculate on who are bidding, what they’re doing to better position themselves to bid and what happens to the companies who don’t get the contracts.
Telecom has had no concern for the people of New Zealand – look at the termination rates debate and the fact that we’re still using ADSL and are paying through the nose for data – and I don’t believe it’s to the benefit to New Zealanders to protect Telecom’s right to treat us like cash cows. Thus, they can play by the same rules as everyone else without our government considering the future of Telecom in these decisions.
In otherwords, if it is a chicken and egg scenario, it’s Telecom’s decision to make whether they want to be the chicken or not. The egg will come if it comes.
Can someone please express “ultrafast” in numbers that actually mean something?
SHG:
IMO ultrafast broadband is 100 Mbps right now, 1.0 Gbps by 2014 or 2015.
In NZ you would be pretty lucky to get a usable download speed of 5-6 Mbps on ADSL 2+ today (IIRC)
@Loota: yeah, but that’s your opinion. Does Labour have a clear statement of “we consider ‘ultrafast broadband’ to be broadband of at least X bits per second” anywhere?
At the moment the word “ultrafast” in these discussions just means “cool”.
Last time I looked, admittedly a while ago, broadband in NZ was still described as 128kbps which was years out of date internationally when it was put in place.
Pretty much.
I’d say “ultrafast” would mean when it’s cheaper and more efficient for a Weta or a Park Road Post to transmit a film clip to Hollywood, than to ship it on a plane to LAX.
Although Weta and Park Road Post has been transferring films to Hollywood since they got fibre in 2008, no residents can afford fibre, even when its outside their house.
Not sure if their new miramar cinema will stream the films from park road post to the screen, but they could do that.
What is needed is to use the Telecom, TelstraClear and Karen fibre as the backbone and allow local companies like citylink and vector, and rural organisations to link into the backbone.
I would suggest that ultrafast be defined as a minimum of 100MB with no local caps on traffic and fairer caps, if any, on international traffic. It shouldn’t cost more than $50 for 300GB of international traffic.
To this end, there has to be competition on our international fibre connection. 1 cable is not enough, and we are all being charged an exorbitant monopoly price on all traffic.
I would add that 1GB is only useful when the router as well as the computer(s) you have have, have 1GB, so possibly that could be a target for 2015.
Another important point is that speeds has to be synchronous, so uploading files and using torrents doesn’t take forever.