Broadband competition

October 14th, 2012 at 10:00 am by David Farrar

The Herald reports:

Broadband users are being bombarded with offers of higher data caps, Sky TV discounts, free surfing on unmetered websites and cheaper prices.

And an industry expert says New Zealanders will soon have access to even more data without any great cost increase.

Orcon is leading the charge with a $99-a-month plan that includes unlimited data and national landline calls of up to an hour.

That’s pretty good. I suspect they have some sort of reasonable use policy though for their data.

A year ago, customers on Vodafone’s Ultimate package paid about $120 for 30 gigabytes of data and anytime national toll calls.

Now their data limit has been lifted to 80GB – at no extra cost.

Telecom has also increased its 30GB data allowance to 50GB – also at no extra cost.

That’s good from both.

Telecom’s head of marketing, Chris Thompson, said more of its customers were spending time online and increasing their data use mainly because of the availability of music, video and on-demand TV services.

Among its packages is a 500GB plan for heavy users. “We are also seeing usage increasing on mobile data very strongly as Kiwi take-up of smartphones rapidly increases.”

Orcon’s general manager of retail, Taryn Hamilton, said that three years ago, customers paid $81 for 1GB.

“Now we do 30GB and free national calling for $75, or unlimited data for $99.”

As UFB really hits my expectation is data plans will be TBs not GBs, and hopefully one day NZer kids will say”Daddy/Mummy what was a data cap”.

 

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Pacific Fibre folds

August 2nd, 2012 at 12:16 pm by David Farrar

Tom Pullar-Strecker reports:

 Pacific Fibre announced yesterday that it had failed to raise the US$400 million (NZ$492m) it needed for the cable, which leaves Southern Cross Cable’s stranglehold on international communications to and from New Zealand as secure as ever.

Around five weeks ago I was in a meeting where I ventured my opinion that Pacific Fibre would not make it, due to the amount of time that had gone by without concrete funding. Sadly I was right.

However some interesting discussion happened about what if PF does not occur, in terms of the economics of a second cable to the US. The problem is that the nature of contracts for cables are firms buy a slice of the pipe in advance for say a term of 20 years, and they are locked in for that price. This means that Southern Cross has a number of customers paying then the market price of 10 years ago. Today’s price are probably 1/4 of what they were then.

This means that any competitor has to compete against not Southern Cross’s average fees, but their marginal fees for extra capacity. As Southern Cross has the revenue stream from the early signers, they can afford to drop their current fees considerably – and have been doing so. Incidentially, this has meant prices have been dropping for international bandwidth – which is good. However now Pacific Fibre is not a potential competitor, industry will be looking at whether or not there will be any further price reductions.

There were expectations competition would have resulted in more generous data caps and perhaps cheaper broadband plans for consumers.

However, research by InternetNZ last year suggested the impact of Southern Cross’s near-monopoly on international bandwidth may have been over-emphasised and other factors could be more to blame for New Zealand’s restrictive data caps.

There is some positive movement with data caps, with some 1 TB/month packages now available. Bandwidth prices certainly is part of the issue, but not the only issue. The secondary bandwidth market is arguably the bigger problem.

Anyway as we were discussing how to make it practical to get a second cable to the US, one person had a pretty good idea I though. Why not focus on getting an additional cable to Australia and push Sydney as a regional data centre for the major players – Google, You Tube, Amazon, Facebook. NZ will never be big enough to get major data centres, but Sydney could arguably do it. And this means that extra cables to Sydney will provide that extra competition we need, if much of our data comes from Australia.

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Price good, cap bad

March 8th, 2012 at 11:00 am by David Farrar

Hamish Fletcher at NZ Herald reports:

Orcon has beaten its competitors with the announcement of ultra-fast broadband prices, but there is still no word on what content packages will be available to entice consumers to sign up.

Chief executive Scott Bartlett revealed Orcon’s fibre plans yesterday and said the entry-level option of $75 per month for residential customers was on par with what the company charges now.

This plan, which includes phone services, comes with download speeds of 30 megabits per second, upload speeds of 10 megabits per second and a data allowance of 30 gigabytes per month.

That’s not a bad price for a fibre connection. But the data cap limit is laughable. I have twice that with my copper connection.

30 Mb/s is 3.75 MB/s. That is 225 MB per minute. That is 13.5 GB per hour. So the monthly data cap of 30 GB will last two hours and 13 minutes at 30 MB/s.

Data caps should be in TB, not GB.

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Broadband – the good and bad

February 21st, 2012 at 12:00 pm by David Farrar

First the good from the Dom Post:

New Zealand’s $3.5 billion investment in an ultrafast broadband network will reap economic benefits worth nearly $33b over 20 years, according to a study carried out by Bell Labs in the United States.

Alcatel-Lucent New Zealand chief executive Andrew Miller will present the results of the study at a Commerce Commission conference in Auckland today that is looking at barriers to uptake of the network, which will be available to three-quarters of homes and businesses by 2020.

Miller said the benefits included the “consumer surplus” – gains to consumers that aren’t directly reflected in higher incomes or GDP.

Bell Labs, which is owned by Alcatel-Lucent, estimated the gains in health and education at $5.9b and $3.6b respectively and said it would be worth $9.1b to the dairy industry in increased productivity.

The biggest benefit of $14.2b would come from helping businesses in general improve productivity, reduce travel expenses and make better use of cloud computing services.

I wouldn’t place huge reliance on the exact numbers as these sort of studies always tend to be rather optimistic. However I don’t dispute the overall conclusion that there will be net economic benefits from having the ultra-fast broadband go out to 75% of New Zealanders – that is why it is being done. The study shows that the benefits could be considerable. I think the reduction in travel and increased use of cloud computing will be major. When people can access files from home as quickly as from work, and when they can say do a six way video conference at the push of a couple of buttons, then some workplaces will reduce to meeting rooms only.

And the bad:

British actor Stephen Fry will not be the only one up in arms if internet providers don’t improve miserly broadband data caps, the Telecommunications Users Association says.

Fry labelled New Zealand broadband a “digital embarrassment” in tweets yesterday after finding he could only upload videos over the internet at a snail’s pace while working from a house in Wellington.

He is in the capital for the filming of The Hobbit.

It transpired that the connection he was using had been intentionally “throttled” down to a slow speed by Telecom because he had exceeded the data cap on the broadband plan – the amount of data that can be downloaded and uploaded for a fixed monthly charge.

Fry said restrictive data caps were “a disaster” for the economy.

But Telecom spokeswoman Kath Murphy said he had been using a plan that “clearly wasn’t suited to his needs”.

Comedian Raybon Kan consoled Fry, telling him: “Don’t think of it as the worst broadband in the world, think of it as the best dial-up”.

Heh.

Data Caps are a huge pain though. They fundamentally change the way you use the Internet as you are always thinking about what if exceed the cap. Some ISPs also have an effective daily data cap and will throttle your speed if you use to much data in a 24 hour period (even if well below your monthly cap).

The consensus at the 2011 Net Hui seemed to be that data caps are the biggest remaining issue for the NZ Internet community.  A great example of what we are missing out on is here:

Netflix’s Christchurch-born vice-president, Brent Ayrey, said in November that meagre data caps were one factor preventing the popular United States online movie and television service launching in New Zealand.The average customer in the US consumed a terabyte each month.

I’m on a 60 GB plan, which is the largest available from my ISP. You can double your data for extra money but still a long way off allowing Netflix to launch in NZ.

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A terabyte data cap

July 5th, 2011 at 1:00 pm by David Farrar

Hamish Fletcher in the NZ Herald reports:

CallPlus plans to offer internet users hooked into the ultra-fast broadband network at least a terabyte of data each month.

While New Zealand may be looking forward to the 100 megabit speeds on the fibre internet network, commentators are worried the infrastructure will not be used to its potential as data caps will restrict the amount customers can download each month.

Slingshot and CallPlus director Malcolm Dick said his companies could offer unlimited data on the ultra-fast broadband network if more internet links out of New Zealand were built.

“A couple of years out … you’d hope that all those caps would be removed and it would be the same as in Europe and the States. Certainly in the worst case we’re looking in the terabytes [of internet use a month]. It will be up to at least a terabyte, I reckon, it has to be,” Dick said.

Having more content hosted and cached in NZ would help also, but sadly it is cheaper for major content providers to host in the US than in NZ.

A 1 TB data cap would be a lot better than the current offerings. But let us look at how quick it might still be gobbled up.

Say you are on the 30 Mb/s plan. That is equal to 3.75 MB/s. A TB is around 1 million (2^20) MBs so a 1 TB cap would last for around 280,000 seconds or 4,660 minutes which is around 78 hours.

Now a month has around 720 hours in it, but you don’t tend to spend all day on the Internet and you don’t spend all your time using the maximum speed.

So a 1 TB data limit would look to be pretty good to me.

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A non data capped plan from Telecom

July 2nd, 2009 at 10:59 am by David Farrar

The Herald reports:

Telecom is to offer an uncapped broadband internet deal but customers will have to trade off connection speed.

From next week a new $60 a month “all you can eat” plan will be offered with the compromise that downloads may be slower at peak times. …

Brayham said during peak hours – generally 3pm to 10pm – internet traffic “shaping” would target files consuming large amounts of bandwidth, which could include some music, movie and software downloads.

I think this is a great move. NZ is the only OECD country with no non data capped plans – finally we have one.

I have no problem with data capped customers getting priority speeds during peak times. File sharers often download overnight and are generally more worried about the data cap, not the speed – so long as it is reasonable.

Of course we have to see exactly how fast things go during both off peak and peak times, but if the service holds up Telecom could do well with this offering.

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