Deregulation on cards as copper network investigation opens

Deregulation could be on the cards as the Commerce Commission investigation into the copper phone network gets underway.

With close to 90 per cent of New Zealanders now covered by the Ultrafast Fibre Broadband network and many of the remainder served by wireless ISPs or low-Earth orbit satellites, the copper phone network is fast becoming an anachronism.

Chorus, which continues to own and operate the copper network, says the network has reached the end of its life with customers better served by other technologies.

A Telecommunications Act requirement

Tristan Gilbertson, the telecommunications commissioner, says his team is preparing an approach paper which is the first step in the Copper Services Investigation process.

This is scheduled to be completed by the end of December 2025. By then only a fraction of New Zealanders will still be using the copper network. At the time of writing less than half of rural households depend on copper.

Gilbertson says the process could lead to copper deregulation outside fibre areas. Meanwhile Chorus is in the process of withdrawing copper services from fibre areas with the telcos no longer selling new copper connections.

Changing market dynamics

For the most part, non-fibre areas are in rural or semi-rural districts. As Gilbertson says, the investigation comes at a time when the dynamics of competition for rural telecommunications services is changing at an unprecedented speed.

He says: “Satellite-based services such as Starlink are bringing urban levels of broadband performance to the most remote areas of New Zealand. Mobile operators and regional wireless internet service providers are also expanding the capacity and reach of their broadband services.”

Officially the Copper Services Investigation is focused on “determining whether competitive, affordable alternatives to copper exist – and, if so, whether removing or reshaping copper regulation is in the best interests of consumers”.

The first part of that question is beyond doubt. The second part is not hard to answer.

Chorus not looking to extend the life of copper

Chorus executive general manager of Fibre Frontier, Anna Mitchell, agrees it is time to look at copper regulation.

She says: “The significant uptake in fibre and rise of innovative technologies such as satellite internet, expanded broadband access and regional wireless providers (WISPs), underscores the need for a timely reassessment of the copper network’s role and regulations as we look to retire the network within the decade.

“Chorus strongly supports this investigation as regulatory settings should evolve as circumstances change. This will allow investment to be directed towards future-proof technologies that meet the changing needs of Kiwi homes and businesses”

Copper no longer essential

When the government supported UFB project began in 2009, there was significant angst about the role of the copper network. Chorus, which built the bulk of the new network, needed copper revenue to finance its fibre build. Today the company would prefer to see the back of copper.

One important shift in recent times concerns the distinction between fibre and non-fibre areas. Chorus says this is outdated. With fixed wireless broadband and satellite availability filling in the gaps, copper is almost never the best connectivity option.

Timing the end of the copper era

The official deadline is for copper to go “within a decade”. In practice it is likely to happen much faster. Its use has already withered. By the time the Commerce Commission investigation is due to report at the end of 2025 copper will be on its last legs. Realistically it could be gone in five years, even less.

Chorus says it is eager to accelerate the retirement of the copper network where possible. “It no longer meets the needs of rural consumers who have superior technology alternatives available.

“While undertaking network retirement will take time, our ability to adapt proven tools like the Copper Withdrawal Code will enable efficient and consumer-focused transitions to alternative technologies.”

Comment: Time for yet another regulatory overhaul

Telecommunications moves fast. Starlink was unheard of when Parliament amended the Telecommunications Act in 2018. Fixed wireless broadband has improved dramatically and the Wisps (wireless service providers have gone from strength to strength).

In part, the rules were drawn up to prevent Chorus and the other fibre network operators from becoming localised monopolies. That no longer looks possible. If anything many regulations now hamper the fibre companies as they attempt to deal with intense external competition.

Regulation has done a great work keeping the market competitive as we moved from copper to fibre, but with powerful new low-regulation challengers entering the market from outside normal terrestrial boundaries, it is already clear the playing field needs rebalancing.

It’s not how these things work. Nor how they should work. But that Commerce Commission investigation report could be written today.

Samsung back on top as phone market ticks up 7.8 per cent

IDC says worldwide phone shipments were up 7.8 per cent in the first quarter of 2024 to 289.4 million units. This marks the third successive quarter of growth. IDC interprets that as indicating a recovery is underway.

Apple was the top brand at the end of 2023, but IDC says Samsung has returned to pole position with 20.8 per cent market share. Apple’s share is 17.3 per cent.

In New Zealand the relative positions are much the same however, here the two leading brands account for around 85 per cent of the market.

Many of the brands that make up the rest of international phone sales are rarely heard of here although their hardware may show up in devices like the low cost One NZ own-label handsets.

IDC says it expects Samsung and Apple to remain the leaders in the near future and continue to control the high end of the market. It says Huawei is “resurgent” in China while Xiaomi, Transsion, OPPO/OnePlus and vivo have all made notable gains.

Sky adds premium BBC channel

A deal struck between Sky and the BBC will bring BBC First, a premium drama channel to Sky TV from October. Customers of the company’s streaming service, Neon, will be able to view some of the shows.

British television is a mainstay of Sky’s offering in New Zealand. Sky says UKTV is its number one entertainment channel with a consistently high and growing viewership.

Qrious now Microsoft Solutions Partner

Spark’s Qrious business unit has become a Microsoft Solutions Partner for Data and AI, part of Microsoft’s AI Cloud Partner Programme.

Qrious CEO Stephen Ponsford says the Spark Business Group, which includes Qrious, has been developing its own data and AI capability for some time: “AI is already unlocking a new wave of productivity especially in organisations focusing on innovation and transformation by integrating AI across all facets of their business”.

UK-NZ project test submarine cable earthquake-tsunami detection

British scientists from that country’s National Physical Laboratory are working with New Zealand’s Measurement Standards Laboratory on a project that could see submarine fibre cables used to give early warning of earthquakes and tsunami in the Pacific Ocean.

They use a technique known as interferometry, which uses light to detect slight changes in a cable’s length. This indicates seismic activity and has the potential to provide an early warning of earthquakes and tsunami.

Scientists have installed equipment on the Southern Cross Next cable on the 3,876km Tasman Sea leg between New Zealand and Australia.

The NPL-MSL project is similar in some respects to theFibresense project using Chorus fibre to measure New Zealand earthquakes..

Australia and the two faces of Elon Musk

As they might say in Australia: “Elon Musk you can’t live with him, you can’t live without him”.

On the one hand, as Simon Sharwood points out in his comment piece for The Register Australia's government has secured a court order requiring Elon Musk's social network, X, to remove all videos depicting a terrorist attack.

X, formerly known as Twitter, remains signed up to the Christchurch Call, which is very much about social media agreeing not to show such attacks, Musk is insisting the material stays available to X users.

Above the law?

As Sharwood reports: “...Politicians of all stripes have described him as arrogant, acting as if he is above the law, and just plain irresponsible to permit circulation of content that depicts a vile act and has such clear potential for harm.

“Your correspondent is an Australian citizen and feels the national mood will welcome tougher laws.”

Meanwhile, CommsDay reports a working group of Australian federal government agencies and satellite companies has recommended that LEOsat technology be embraced to boost digital inclusion, supply universal services and improve telecommunications resilience.

For LEOsat read Starlink.

The two stories broke on the same day. You can read them together as Musk throwing his weight around and snubbing Australia at the very moment the nation’s rural population is considering trusting his business with their vital communications.

HP sees AI PCs as fix for higher cloud costs

Your correspondent was in Sydney this week for HP’s upbeat launch of a slew of new AI-equipped laptops. There are new models in the company’s Pavilion, EliteBook, ZBook and HP Spectre brands.

The AI capability comes in the form of dedicated Neural Processing Units (NPU) added to Intel Core i5 and i7 processors.

Laptops are not generally the focus of The Download Weekly, but the new HP models have a direct relevance for the wider telecommunications sector. One of the key selling points of HP’s AI PCs is their ability to handle workloads that are currently more commonly sent to cloud services from the hyper scale datacentre operators.

Cloud backlash

Cloud computing costs have risen rapidly in recent months. An HP exec explained that the new PCs can handle most AI jobs every bit as fast as cloud services at a fraction of the cost and with greater security. It also solves any data sovereignty problems.

It’ll be interesting to see if the new machines speed up PC refresh cycles.

After a brief increase in sales during the Covid lockdowns, sales have fallen back as people hang on to old hardware for longer. Adding AI to the mix is a good reason for business and enterprise customers to return to the market and HP thinks it can attract individual buyers, especially those interested in creative AI-powered applications.

In other news...

The US Senate passed a bill that will either ban TikTok outright or force the owner, ByteDance, to sell the business. It has one year to find a buyer, if that doesn’t happen, TikTok will be banned from US app stores.

At the New Zealand Herald Chris Keall writes Spark apologises after man’s Xtra Mail blunder loses 30 years of family tree research. Xtra Mail has been a problem for a while, but the data mentioned in this story should have been safe.

Juha Saarinen’s Woman who promoted herself as 'one of the biggest scammers in NZ' convicted for crypto pyramid scheme at Interest.co.nz delves into the nasty side of cryptocurrency. As I’ve pointed out on this site and on air over the years, it isn’t that everyone who uses crypto is a crook, but every modern crook uses crypto.

Time is running out for old Eftpos machines reports Rob O’Neill at Reseller News. He says devices running on the PCI 3.x standard will no longer be compliant after June 30 and should be replaced by more modern and secure technology.