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New Zealand’s 700 MHz spectrum auction is due to start today. The auction is for nine parcels of 5 MHz paired spectrum. Each parcel has a reserve price of $22 million. That’s a total of $198 million. Few expect the auction to raise much more than that figure.

In the first round of bidding each bidder is limited to buying three parcels of the spectrum. With only Telecom NZ, Vodafone and 2degrees registered to bid, there are unlikely to be many surprises.

The only unknown is whether 2degrees is able to buy its full allocation of 15 Mhz paired for $66 million. Should it fail to do so, Telecom NZ and Vodafone will each be invited to bid for an additional 5 MHz block.

The 700 Mhz spectrum became available after New Zealand switched from analogue to digital television broadcasting. 700 MHz is especially well-suited to 4G mobile data networks, particularly in less densely populated rural areas because signals can travel further.  Or to put it another way, carriers can cover the same amount of ground with less physical infrastructure.

There are some interesting auction rules requiring successful bidders to increase their network coverage. For more details, see the Radio Spectrum Management website.

IT Minister Amy Adams with IITP Chair Ray Delany
IT Minister Amy Adams with IITP Chair Ray Delany

Communications and IT minister Amy Adams delivered a wide-ranging speech opening the 2013 IITP Conference in Tauranga.

She used the occasion to clarify her position on two contentious issues: the Telecommunications Interception Capability and Security (TICS) legislation and government intervention in copper pricing.

Adams talked down criticism of TICS saying we’ve moved from having one company control the only significant network to a time where there are multiple networks and many companies to deal with.

Communications different

She says: “The way we communication now is different to the copper era and the industry operates differently. We haven’t changed our definition of what is a network operator or what is a service provider and what their obligations are.

“The new law is simply a matter of updating the rules for a digital world. What hasn’t changed is the importance of real time interception for law enforcement. The police are dependent on real time interception to tackle crime”.

Adams says contrary to what some critics say, the new law does not open backdoors or give the GCSB fresh powers: “It doesn’t related to stored data or cloud computing. Interception requires a single warrant to cover a single person”.

Google, Microsoft

The TICS legislation has come under fire from industry players and from international companies like Google and Microsoft who saw the laws as imposing new constants and said it presented them with a serious legal conflict. Demands from New Zealand agencies to turn over information elsewhere in the world could see them break local privacy and confidentiality laws.

Adams says these companies misunderstood their position under existing law. The definition of a network provider hasn’t changed. And as for the legal conflict, Adams says the TICS legislation calls for a “duty to assist”. This comes with a reasonability test.

Not a tax, nor a transfer

Turning to copper pricing Adams points out the money is not a tax or a transfer. She say it is a matter between wholesale and retail service providers (i.e. Chorus and the ISPs). “I’ve not seen any indication the service providers would pass the savings on to their customers”.

Part of the debate hangs on establishing the cost of building a modern replacement for the copper network.

She says the modern alternative is a fibre network: “Normally we look at international benchmarks are overseas best practice. But when it comes to determining the cost of building a fibre network, we know what the prices are because we’re building one here”.

Adams says the controversial copper price regime would only last for five years from 2014 to 2019 when new regulations would come in.

 

Vocus-Date-Centre-Opening-0002
Vocus chairman David Spence at the Auckland data centre opening.

Vocus Communications chairman David Spence was in Auckland this week to open his company’s new Albany data centre.

Spence has a long history in the internet and communications industries. He served as CEO at Australia’s Ozemail. Disclosure, I worked for the company as Australian Netguide editor.

Later Spence ran Unwired, a company that pioneered WiMax wireless internet services. In addition to his role at Vocus, he is also chairman of Paypal in Australia.

Commenting on New Zealand’s Ultrafast Broadband network, Spence says:

New Zealand has done a good job on fibre broadband compared to Australia. Over there about 2 percent of the country is covered, there’s much more here already.

Australia’s National Broadband Network was a great idea, but the plan has been appallingly executed. At least part of the reason for New Zealand’s success is that the government has a good model.

After a slow start, New Zealand’s fibre network is gathering momentum.

Crown Fibre Holdings reports 300,000 end users were able to connect to the network in June 2013.

Meanwhile the June quarter saw a sharp rise in the number of actual connections from around 6,000 to 10,000. With the nation’s two largest service providers, Telecom NZ and Vodafone now selling UFB and a backlog of customers waiting for connection that number looks set to climb.

Speaking at the launch of his company’s residential UFB offering earlier this month, Vodafone consumer director, Matt Williams said he was confident his company’s TV package will deliver more customers.

Vodafone is the main new entrant to digital’s list of residential UFB plans.

There are few other tweaks. Our table just lists the faster 100/50 Mbps fibre plans because, in our view, these are the ones that matter. The slower 30/10 Mbps fibre speed isn’t much of a step up from copper.

We’ve deliberately kept the list simple. Two things to watch for: first many service providers have limited coverage areas; second, some of the more expensive services include extras that may or may not be valuable to you. It pays to check for more information, that’s why we’ve provided a link to each service provider.

Service provider Data GB Monthly charge $ $ per extra GB
Actrix 1000 250 2
Inspire 1000 265 $10 /10GB
Lightwire 600 159 Note a
Now 350 145 2
Orcon unlimited 134 Note c
Primowireless 500 299 1
Snap 150 110 Note b
Telecom 500 159 0.5
The Cloud unlimited 155
Vibe Communications 20 96 0.8
Vodafone 250 119 1
Voyager 1000 195
Worldnet 1100 179 2

a) Lightwire has soft caps. If you habitually run over you’ll be asked to move to a higher plan
b) Snap sells more 100GB data blocks for $15.
c) Orcon’s unlimited plan has fair use limits and the company pools available data. Read that as “if you’re a huge user you may run up against the limits of unlimited”.
d) Vodafone fibre costs $30 less with some mobile accounts. Sky TV packages cost extra, prices start at $45 a month.