Drury’s brilliant content plan

It is hard to argue with the content plan in Rod Drury’s alternative technology budget at the NBR.

He writes:

The ICT and Broadcasting portfolios are merged. The new minister is charged with unlocking content from overseas providers so it can be legally purchased in New Zealand (for example: Netflix, iTunes, Amazon) to stimulate UFB uptake. TVNZ will broadcast content for free and additionally make all content available globally for a small fee (for example: paid content in iTunes).

Merging the IT and Broadcasting portfolios is long overdue. The two collided when Saturn Communications built its first HFC cable network in the 1990s. It has been hard to see where one stops and the other starts for over a decade.

Grasping the content nettle is more important. As Drury suggests, residential fibre won’t take off until consumers can get decent television shows, sports and movies without breaking the law or jumping through technical hoops.

Slow residential fibre uptake means the economy won’t see the wider benefits of faster broadband. This in turn means Sky TV’s effective monopoly on content now holds back the wider economy. Economists can determine how much this costs.

Whatever political considerations that meant this wasn’t tackled before now must take a back seat.

Putting this in a budget is clever because it forces politicians to face the cost of ignoring the problem. That’s important because Parliament doesn’t seem to have the political will to challenge Sky TV. This will put pressure on politicians to face the issue.

Presumably global content providers like Netflix and iTunes will one day cut international deals with the content creators that bypass geographic monopolies like Sky. New Zealand’s economy can’t wait for others to act.


NZ fibre uptake: not bad

New Zealand’s UFB fibre network now passes 177,886 premises. Of these only 5133 or 2.9 percent have connected to UFB services. As with the earlier roll-out reports, what some observers see as a relatively low fibre uptake triggered hand-wringing in the media and elsewhere online.

Some perspective is called for. 2.9 percent isn’t a bad number at this stage.

Telecom NZ, the largest ISP, has just started selling fibre connections. Vodafone, the second largest, has yet to begin.  Some houses, passed but not connected, are still sitting on waiting lists – a lag is inevitable.

Fibre marketing is still in its infancy. And, anyway, people don’t have to jump and buy right away. I’d be more worried if New Zealanders unthinkingly immediately plonked down cash for every new gee-gaw that comes on the market.

Another point to consider; what would be the ideal take-up rate?

Fixed line telephones never reached every single NZ premise even when dial-up was the only option. Today’s consumers have other choices. There are ADSL and mobile broadband.

Then there are the measly data caps. Consumers on low-end UFB plans could chew through a month’s data in an hour or so.

Finally, there is still no compelling reason for an ordinary New Zealand household to buy fibre. The government effectively killed consumer demand for fibre by enacting Section 92A of the Copyright (New Technologies) Amendment Act and allowing Sky TV to have an effective monopoly on entertainment content.


Vodafone LTE challenges fibre in New Zealand

It’s four days since the best broadband I’m likely to see for the next five or six years will be wireless was posted. If independent consultant Jon Brewer is right, that could come in the shape of a Vodafone-owned network of picocells connected to the company’s own back-haul network.

Brewer says Vodafone has the technology and the spectrum needed to roll out a network much faster and cheaper than the UFB network being built by Chorus. It will offer UFB-like speeds. Brewer doesn’t say so, but the economics he outlines suggest Vodafone would be able to boost data caps.

Until now the arguments against wireless networks have been to do with spectrum scarcity and the high cost of network equipment along with the expensive of getting resource consents. Picocell technology does an end-run around these.

Where consumers have a choice between fixed and mobile networks, they tend to choose mobile leaving fixed-line for things like bulk downloading of media content.

While Brewer’s post is speculative, there are some sharp minds at Vodafone who must have at least considered this approach. It will probably run into regulatory hurdles – New Zealand’s centre-right government is not keen on letting market competition make decisions about future telecommunications.

Nevertheless, this is a more exciting prospect than waiting for fibre to come down my road.

LTE as Fibre Killer? Vodafone’s Quick Win for Fixed Mobile Substitution « Inside Telecommunications New Zealand.


What you’ll pay for fibre internet

A handful of New Zealand’s internet service providers (ISPs) now sell UFB connections to home users. Below you’ll find a table showing the prices they ask for various broadband offerings.

You can’t get a UFB connection until your neighbourhood is connected. Business districts, hospitals and schools are a priority, residential areas are second and the roll-out won’t complete until 2019, so there could be a long wait.

Prices from $70

Plans start at just $70, but you don’t get much data when buying bottom of the range fibre services – if you push hard you could download your entire month’s allocation in a few minutes. Pay more and plans include a decent whack of data – more than enough to keep you in video conferencing and downloaded content all month.

ISPs have little room to manoeuver on price. Apart from the amount of included data, connection speed is the only other point of difference. You can buy a 30Mbps service for around $30 less per month than a 100Mbps service.

With only a small fraction of the nation’s homes connected to fibre, the prices shown here are largely symbolic at the moment. And at the time of writing New Zealand’s two largest ISPs, Telecom and Telstra Clear have yet to go public with plans for selling the government’s UFB fibre-delivered broadband to home users.

About the table

The plans in the table below all include GST. Some ISPs charge connection fees. Lightwire, marked with the letter a) in the notes column charges a $200 fee that includes installation and a router.

If you spot any errors or omissions please get in touch with me and I’ll update this table accordingly.


26/11/12 – Added Xnet – note b) $200 installation fee including a router
26/11/12 – Added Ubergroup
26/11/12 – Added Now

Service provider Speed down/up Mbps Data GB Monthly  $
Kiwilink 30/10 25 86
  30/10 50 104
  30/10 100 138
  30/10 200 201
  100/50 25 121
  100/50 50 138
  100/50 100 173
  100/50 200 236
Lightwire 30/10 200 99
  30/10 400 129
  30/10 600 149
Now 30/10 20 70
  30/10 75 75
  30/10 125 90
  30/10 350 110
  100/50 20 120
  100/50 75 125
  100/50 125 140
  100/50 350 175
Orcon 30/10 30 75
  30/10 60 89
  30/10 unlimited 99
  100/50 30 110
  100/50 60 124
  100/50 unlimited 134
Snap 30/10 50 75
  100/50 100 110
Ubergroup 20 10 65
  20 30 69
  20 150 79
  50 150 99
  50 250 199
Worldnet 30/10 25 70
  30/10 50 80
  30/10 100 90
  30/10 200 100
  30/10 300 130
  30/10 1000 200  
  100/50 25 100
  100/50 50 110
  100/50 100 120
  100/50 200 130  
  100/50 300 160
  100/50 1000 230
Xnet 30/10 5 70
  30/10 15 99