It’s the connection, stupid

Currently I’m sitting in a conference room in Hawaii waiting for the start of the APECTEL roundtable on cyber-security.

I’m here representing INTUG (the International Telecommunications User Group) of which TUANZ is a part (and in case Mr Oil is reading, they paid for the trip) and hopefully will learn something useful about both telco regulation and issues throughout our region.

Telecommunications will play a huge role in the development of countries throughout the region as we jostle to take up space in the digital economy – but in some countries the role is a lot more basic. Simple infrastructure is what’s needed – they just don’t have the pipes (physical or wireless) to connect the population either to each other or to the rest of the world.

Which brings me to the topic of the UFB. By now you’ll have seen the campaign we’re running to get the government to rethink its $600m tax on copper connections.

It’s important to me that we build the UFB but that we build it the right way. Setting it up as a cash cow for Chorus is not going to be in the best interests of competition or users in the foreseeable future and such backroom deals should have no place in the shiny new fibre world we’re building.

That’s not to say I think the UFB is a white elephant or is failing to deliver on its promise. Far from it – we’re very early in the project and deployment rates are on track or slightly ahead in most areas. Sure, uptake is still woeful but there’s a practical reason for that – most households won’t be connected until after 2016 so the ones who are able to connect today are at the leading edge of the adoption curve.

Picture the bell curve. We are still very much at the leading edge of that curve. Uptake rates in single figures aren’t at all surprising because the deployment is still in its infancy and the number of users who are willing to subject themselves to the torturous installation process are few and far between.

But in a year or so we’ll start to see that process get better as installers learn their trade (I can feel a column about training coming on as well) and as more customers find more things to do online with ultra fast broadband.

But two things have to happen to get to that point. Firstly, we need to actually have ultra fast broadband, not this piddling “it’s a bit quicker than copper” we have on offer today. Secondly, we need to have more content legally available online in order to satisfy customer needs.

Having a UFB that is capable of 1Gbit/s is tremendous. Cutting the entry level speed down to 30/10Mbit/s is quite woeful.

TUANZ backs Vodafone’s suggestion of increasing that base speed to 100/50 or more for the same price in order to really give users the speed bump that will jumpstart uptake. It gets users over the line far more pointedly than a 30/10 proposition does.

Content is another area entirely and that’s something we’d like to see government get involved in. Rights issues cloud the waters and nobody is really sure where the problem lies. It’s high time we sorted that out and got to the bottom of where the bottleneck is, what’s stopping uptake and what would help get a Netflix, Hulu or similar up and running in New Zealand.

Sure, we’re a small island nation at the bottom of the world but frankly if we let that stop us we’d be in big trouble. High time we start talking to content providers and see what could be done to bump us up the waiting list.

When colour TV arrived the selling point wasn’t that it’s the same price as a black and white TV but rather that the customer experience was better. Nothing’s changed – UFB’s selling point is that it’s better than copper, not that it’s priced at the same rate.

1 reply
  1. Reg
    Reg says:

    The final analogy is spot on – of course colour TV sold on it being a better experience. The not surprising consequence of an increase in relatively high priced colour TVs was that the price of black and white TVs dropped. Lots of people previously without any TV could suddenly afford one.

    By insisting that the price of copper broadband be artificially pushed up to make fibre broadband more attractive the Government is denying a large number of kiwis the opportunity to participate in the broadband society/economy.


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