Chorus v Telecom

July 28th, 2014 at 4:03 pm by David Farrar

Stuff reports:

has returned fire over a complaint laid with the Commerce Commission over a new copper broadband product.

Telecom said Chorus planned to impose an “artificial cap” of 250 kilobits-per-second on the average throughput of its regulated copper broadband service in order to make new “premium” products it announced in May more attractive.

Telecom said the move would significantly degrade the performance of regulated copper broadband services, the price of which is set by the Commerce Commission.

It has laid a complaint against Chorus, saying the proposals breached the Telecommunications Act and were also a “breach of good faith”.

The commission said it would investigate the complaint and revealed CallPlus had also voiced concerns about Chorus’ changes.

This shows what a good idea it was to separate Telecom and Chorus. In the old days, this may have just happened without dissent. It is a good thing to have the interests of the largest competitive provider separate to the interests of the monopoly infrastructure provider.

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10 Responses to “Chorus v Telecom”

  1. burt (8,239 comments) says:

    KiwiNet will remove this separation and with a socialist state run monopoly will be queuing for web pages just like socialists have been queuing for bread and toilet paper in the past.

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  2. Julian (176 comments) says:

    You’d be surprised. I’ve worked for large network businesses, and often internal politics (and fear of the regulator) meant that colleagues were treated much WORSE than other network customers.

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  3. queenstfarmer (774 comments) says:

    Telecom complaining about a network company imposing an artificial cap. Oh, the irony!

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  4. Fentex (938 comments) says:

    The failure to separate the two when Telecom was first privatised cost NZ a lot of money and seems to have been a spur to the thought of privatising power companies, but is there such an obvious separation between infrastructure and service in that market?

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  5. peterwn (3,243 comments) says:

    Fentex – yes, there is. Transpower and the local distribution companies are independent in a similar manner as Chorus.

    Arguably power generation and retail could be split. However generators would want a firm destination for their production before committing capital expenditure and retailers would want a firm source of power. So even if they were split, they would want to put in place contracts to provide mutual confidence. If these contracts were forbidden, there would be a reluctance for generators to commit capital expenditure and the Government would need to step in to ‘regulate’ this area – ie a regulator predicting future generation needs and placing the prediction risk (or a major part of it) effectively on the end customers. Once this occurs, the industry would have turned the full circle with politicians taking the ultimate rap if demand is over or under estimated resulting in more expensive power than necessary or power shortages and the need to ration.

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  6. somewhatthoughtful (464 comments) says:

    Thanks DC

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  7. Alan (1,087 comments) says:

    Would it kill you to give some credit to the minister who did this ?

    What was his name again, David something wasn’t it ?

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  8. Anthony (794 comments) says:

    Alan, I think that Minister was Stephen Joyce! David C only got as far as accounting separation between Telecom and Chorus – not full structural separation.

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  9. Jim (397 comments) says:

    Surprised nobody picked up on 250 kilobits-per-second… what century is this? I had to double-check the date on that Stuff article.

    That’s 31.25KB/s, so it would take 24 hours to download 2.7GB assuming you could sustain the average over a day.

    Chorus spokesman Ian Bonnar said 250kbps was “slightly above the average throughput that people see on the network today” so Chorus was not proposing to “take anything away” from anyone.

    Is that what most people suffer as “broadband”?

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  10. burt (8,239 comments) says:

    Is that what most people suffer as “broadband”?

    That’s below the global broadband poverty line – it doesn’t have to be this way !

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