UFB project at halfway point

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-only MyRepublic 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 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.