Broadband – the good and bad

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”.


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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