UFB at halfway point — is everybody happy?

Communications Minister Amy Adams says New Zealand’s government supported fibre network has hit the halfway point.

In a press release the minister says: “The UFB build is going from strength-to-strength, with fibre being rolled out to communities up and down the country. The project continues to be on budget and well ahead of schedule”.

There’s little question about the project being on budget that’s because Chorus shareholders have to find the lion’s share of the cost. The other network builders have to invest their own money too.

Well ahead of schedule sounds right. But that’s partly because the companies picked the low-hanging fruit first.

Anecdotally I hear the build in Auckland, which makes up more than a third of the total project, is running behind schedule. Meanwhile people living in apartments are a long way behind any schedule.

Going from strength-to-strength is debatable.

Cherry-pick

To date only one-in-eight of the people able to connect to fibre have signed-up. Given that the UFB builders cherry-picked the richest suburbs as the first to get fibre, this doesn’t bode well.

Also, as Chris Keall points out at the NBR: “…that number includes the schools that have received free connections, network management and free broadband from Crown company N4L”.

And then there are the widely reported congestion woes. Since March TrueNet, the broadband speed monitoring service, has been reporting on poor performance during the evening.

Streaming video peak time

This is the streaming video peak time. It turns out the networks can’t cope with thousands of consumers all watching Netflix at the same time.

Even the fibre-onlyMyRepublic service struggles. This suggests a need for further investment in backhaul and ISP provisioning.

You could argue congestion is a sign of New Zealand’s broadband network going from strength-to-strength. It means there’s a healthy demand for data services even if consumers aren’t in a hurry to switch to fibre.

Demand to grow?

Optimists assume fibre demand will grow as streaming video gathers momentum with consumers.

Radio New Zealand has followed another fibre story undermining the strength-to-strength message:
“Crown Fibre Holdings – which is in charge of the Government’s $2 billion UFB rollout – wanted to ensure service providers such as Spark and Vodafone had to offer battery backup.”

There’s a remarkable Nine-to-noon interview where Katherine Ryan questions Chris Bishop, a policy and programme manager at the Ministry of Business, Innovation and Employment.

Fibre battery backup

The man looks like either a liar or a fool as Ryan repeatedly asks why the ministry forced Crown Fibre Holdings to drop a requirement for ISPs to offer customer battery backup.

Time after time Bishop trots out an implausible line about “wanting to offer consumers a choice”. It doesn’t begin to address the issue.

Radio New Zealand had to get an official information request to find out about the ministry leaning on Crown Fibre and CFH’s response putting its objection to the ministry on the record is just as enlightening.

Ryan nails the key point when she notes that when this was happening suitable backup batteries cost around $300. If consumers thought they’d face that as an upfront cost, they wouldn’t sign for fibre.

Greater disclosure please

Craig Young from the Telecommunications Users Association of New Zealand (Tuanz) says the lobby group was working with the industry to try to ensure companies installing broadband were more upfront with customers about the need for batteries.

He says: “You probably don’t even know where to find a product disclosure code, for a product that’s being sold by Spark. You want to be told on the phone when you get this service that it won’t work when the power goes off, there should be a requirement on service providers to be a lot more upfront about these sorts of things.”

Batteries can now be bought for about $100 and Mr Young said telcos could upsell those to consumers.

Fibre, batteries, power cuts

The issue is tricky. You need battery backup because unlike copper telephone networks, fibre doesn’t work in a power cut. Radio NZ worries that means people can’t make emergency calls.

Yet, with mobile phone penetration now at well over 100 percent, few households would be cut-off in an emergency. Certainly not the kind of tech-savvy households in a hurry to buy fibre.

Except there are places like the recently built old people’s accommodation in Wellington that is fibre only. The residents have to sign for fibre accounts and, at first, couldn’t make regular phone calls.

Old school telephone on fibre

Spark came to the UFB project’s rescue selling what is effectively a virtual plain old-fashioned telephone service over a fibre connection product. Any ISP could offer a similar product, the technology was baked-in to the UFB design from day one, but the others have chosen not to invest in that area.

That still leaves the problem of fibre failing in a power cut, but then so does everything else. We’re dependent on electricity. After the Christchurch earthquakes the mobile carriers used portable generators to power cell sites. People still had to find ways to charge their mobile phones.

There are still whiffs of amateur hour about the UFB project. You might well ask why it took the government until the roll-out’s halfway point to address the access issues.

And there are still questions over the price ISPs have to pay Chorus to use the old copper network. Spark recently rekindled the copper tax debate pointing out that half the money a customer pays for broadband goes directly to Chorus.

While we’re on the subject of the copper tax some sources have reported the government has made heavy-handed threats of retaliation if that term ever surfaces again in public debate. Clearly it touched a nerve. And that’s something that wouldn’t have happened if the UFB network was genuinely going from strength-to-strength.

There’s is a lot that’s right about the UFB network. It’s a great idea. For the most part it’s been well executed. But let’s not delude ourselves. It’s not perfect, nor is it going from strength-to-strength. Not yet.

Post amended with comments from Tuanz CEO Craig Young. 

10 thoughts on “UFB at halfway point — is everybody happy?

  1. We’re currently experiencing the best broadband speeds we’ve ever seen here in Palmerston North – significantly faster than we had living in the UK, where large portions of major cities are still stuck on connections that are little better than fast dial-up.

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  2. Great story – keep the buggers honest. Good that you mentioned the copper tax. But you could have mentioned the iniquity of the copper tax for those of us who live in small towns which aren’t even on the fibre rollout programme. We’re paying over the odds to subsidise something we can’t even get.

    Liked by 1 person

    • Totally agree with you, John. Out in the boonies, the prospect of getting fibre service is almost zero. And that’s despite the RBI fibre passing by the end of our road. Having a contestable fund for RBI2 will surely mean that larger communities will win a greater share of funding… which means that smaller, rural communities fall even further behind…

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    • A good point John but by the same token, i don’t have kids. Should I not have to pay school tax as everyone with or without kids does?

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  3. Excellent piece.

    A few things from a rural perspective. Where I live copper-based broadband is beamed in by UHF from the radio mast outside Masterton. A “good” speed for broadband here is 1.5Mbps. At night it deteriorates to around 0.33Mbps and the smallest task takes a long time. (I am 500m from the exchange.)

    We have no cellphone coverage, despite being in a little village, and despite endless requests to Chorus.

    We are totally dependent on the old copper phone line, which is the only point of connection in a power cut (frequent). Fortunately the little local exchange has good battery backup.

    I got really excited a few months back when they started laying fibre outside my property for the local school. I asked the technies laying the cable and they said it would be perfectly possible for them to put a splitter on so the 12 village residents could have fibre. “No, no, and no,” said Chorus, who simply couldn’t care less.

    So much for the rural broadband initiative. Yes, there are satellite options I could take up, but they are really expensive, not very fast and have very low data caps.

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    • “Editor”: it is possible for the school that receives the fibre connection to act as a local, community based ISP, and then potentially serve up access via something like a high speed wireless network. The downside is that there is bureaucratic hoops to jump through, and this does impose an additional burden on the school, but with a progressive Board Of Trustees and some “community spirit” it should be possible.

      That, of course, assumes that the school is local to the village…

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      • That is a very good idea. The school is very close by so the solution is perfectly feasible. I might talk to the BOT chair as it is a potential fundraising opportunity for the school. Unfortunately the principal struggles with technology, but our farming families are nothing if not entrepreneurial.

        The thing that annoys me most – and annoys the techies – is that each contractor is contracted to do a certain bit of work and that’s it. Former Telecom techies tell me they’d have quickly found a way of connecting all the 12 properties up, but their hands are tied under the present “bit here, bit there” contract process.

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    • My home town of Martinborough has fibre. But effectively only for the school.

      From the school, the fibre cable snakes its way down the street, then turns 90 degrees right into the road south to Palliser Bay at the very bottom of the North Island. Thirty kilometres south of Martinborough is the tiny hamlet of Pirinoa. It has a tiny school and fibre had to be taken to that school because it is a school.

      Though the cable goes past my front gate, I won’t have access to it until the never-never. Nor will other individual residents.

      But a select few Martinborough residents do have fibre. On its way to Pirinoa School, the cable passes a subdivision called Pinot Grove. The subdivision has been in existence for the last 16 years, but it’s been an abject failure for a variety of reasons. A couple of years ago, the latest in a succession of developers added a carrot: fibre availability. It seems a consideration was slipped to Chorus in order to tap into the passing Pirinoa School cable. The developer onsells the fibre connection to subdivision residents at a horrendous price. The fibre carrot hasn’t worked – the subdivision is still largely empty.

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  4. I only know 1 person who has residential fibre in Auckland. I have seen the cables being laid all over the place but not many actually connect to homes. I would love to get fibre, if I could find a place that actually has it.

    I think it was a bit misplaced to run fibre to the richer suburbs – I get their reasoning that they can pay the higher price easier, but you’re missing the target market: tech early adopters. I doubt most of the tech-savvy enthusiasts live in multi-million dollar homes (though with the housing market as it is we’ll all be living in multi-million dollar homes soon). I’m not exactly sure, but census data and other Government data should provide a vague idea where tech people live. I think those areas would’ve had a lot more uptake.

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