We have always been at war with Eastasia

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The EU has told Google it must delete “inadequate, irrelevant or no longer relevant” data on request from individuals. The journalist in me just turned over in his grave.

Google, of course, doesn’t actually store this information – it simply finds it and makes it easy for others to find. Telling Google to screen results in this way is similar to asking the Post Office to make sure nobody sends me pictures of something I don’t like.

But assuming Google can tweak its algorithms to do this, or more likely hire staff whose sole job is to vet information upon request to remove links to such things, I would question why we would want it and whether Google is the right company to ask this of.

Let’s assume you, like me, did something silly back when you were a teen. I’m lucky – cameras weren’t invented back then, let alone digital cameras, let alone the internet, let alone… I’m one of the safe ones. My youthful stupidity can remain firmly in the past, and I wouldn’t be happy if it was dragged up today.

What if, instead of youthful exuberance, my past data is actually about that time I committed fraud, or ran a company into bankruptcy? It might be decades ago but next year, when I run for President of the World, that will be relevant, surely? Will Google be required to keep the forbidden data in case circumstances change?

And who gets to decide whether that information is “inadequate, irrelevant or no longer relevant”? Google shouldn’t – it’s not an editorial control agent, it’s a bunch of geeks who are very good at maths. It’s also a company hell bent on making money – does this same ruling apply to Bing? Making Google arbiter of your privacy is odd, to put it mildly.

Unfortunately, we do live in an age where all such things can be captured electronically and stored for decades to come. Fortunately, we also live in an age where all such things can be captured electronically and stored for decades to come. Big data is here, and we have to live with it, but telling Google to selectively forget some things displays a shocking lack of awareness about how the internet works, how privacy works and how the ability to research an issue shouldn’t be hampered by today’s moral codes.

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Fishhooks

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The Commerce Commission’s monitoring report is a tale of two halves.

On the one hand, you have a highly competitive market with prices well below the OECD average and fierce competition. Customers are being offered more for less and new offerings come to the market regularly.

Customers can buy data, voice, TXT, they can go on prepay plans or on account and they’re loving it.

The other market consists of prices up to 190% of the OECD average, limited market energy, little or no competitive pressure and a distinct lack of creativity.

The reason for the difference is clear – 2Degrees.

The first market is the low-end prepay and on account segment where 2Degrees has vigorously burst onto the scene only a handful of years ago. The third entrant has radically changed the dynamic and the other two network incumbents have been forced to respond in kind.

Suddenly we see bundles on offer at $19/month that only months earlier had sold for $70/month. The drop in price has been matched by an increase in value – customers get more TXTs, more minutes, can call more friends and family members in more calling groups and have more data to use on their shiny new smartphones than ever before.

Since it arrived, 2Degrees has fought well in this market and achieved a great deal. It’s customer numbers have long since passed the million user mark and are still rising. It’s very successful, so long as your measure of success doesn’t include “breaking even” because clearly the cost of spending on network deployment (and the impending launch of 4G as well) is not a trivial matter. It will be quite some time before 2Degrees is in the black.

The other market, however, is failing to deliver on that promise. High end business and corporate plans, and larger on account offerings, simply aren’t seeing the same level of movement to 2Degrees and I’m wondering why.

It’s not as though the plans on offer don’t appeal to business or high end customers. The same price points are attractive across the board, and while business customers care less about the costs associated with the service, the CFO certainly does and typically buying decisions are made at that level.

So why is it that 2Degrees isn’t carving the same level of fat out of this market?

I suspect it’s a combination of factors, not least of which is the speed with which customers can disentangle themselves from their contracts.

Prepay customers are free to move quickly and easily between providers. On account customers face many barriers to switching, not least of which is the ever present “early termination fee”, which is often applied even if you’re moving within the same provider to a better suited plan.

These fishhooks mean there is a lag in movement for on account customers. Instead of simply picking up and shifting to a new provider, OA customers must wait until a certain time period has passed, or until they’ve paid off their new “free” handsets (which of course are never free but rather “$0 up front” and which must be paid in full before customers are allowed to move on).

Early termination charges often include an extra fishhook – rather than simply repaying the cost of the device, they attempt to recoup the worth of that contract to the provider. Sign up for two or more years and you’ll find your “worth” is quite a bit and if you want to get away early, the break fee can be quite astonishing.

I think it’s high time we called these zero dollar handset subsidies what they really are: hire purchase agreements. You get to take the phone home with you, but you’re tied to a provider for years and end up paying more for the service than you should.

It’s time, I think, that the Commerce Commission had a closer look at all of this, and I’d go a step further and call on the government’s inquiry into the Telecommunications Act to consider the issue as well.

The numbers are clear for anyone to see – something’s stopping on account customers from migrating to 2Degrees and it’s not the price point.

TUANZ announces new CEO

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TUANZ announces new CEO

Media release

21 May 2014

TUANZ is pleased to announce Craig Young will take over the reins of the Telecommunication Users Association of New Zealand following the departure of current CEO, Paul Brislen.

Craig comes to TUANZ fresh from a six year stint at Chorus where he most recently lead the industry relations programme. Craig joined Chorus at the date of operational separation in 2008 as the Head of Business Development, and before that was GM of wholesale commercial development at TelstraClear. Craig has worked in the New Zealand IT and telecommunications industry in one form or another since 1997.

TUANZ Chair, Pat O’Connell, says Craig brings a wealth of industry experience to the role.

“We are particularly pleased to have attracted someone of Craig’s calibre and experience”, says O’Connell. “This is strong affirmation of the critical role TUANZ plays in the New Zealand telecommunications sector.”

Craig says he’s looking forward to the opportunity to shape TUANZ and to lead it into its next phase of development.

“I look forward to working closely with members to ensure that TUANZ provides leadership in the sector.  I’m particularly keen to continue to raise awareness of how the developments in telecommunications can add to the lives of all New Zealanders at work and at home.”

Craig will take up the role from October 13th 2014.

 

ENDS

 

Note to Editors

Craig will retain the TUANZ contact details currently in place:

021 488 188

09 488 1888

And his email address will be craig@tuanz.org.nz

Paul Brislen leaves at the end of May and during the interim period any media enquiries should be directed to TUANZ head of policy work, Chris O’Connell: chris@tuanz.org.nz or 021 488 188.

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Chorus ups the ante on fibre speeds

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Chorus has announced a new line-up of fibre products designed to encourage uptake of the UFB.

In essence, this is a very good move. In a world where VDSL can offer equivalent speeds (albeit with caveats on that) at the same price but without the horrendous experiences of having your street/garden/house dug up to connect, any fibre service will need to offer significantly more in order to compete.

Chorus is proposing a 100Mbit/s download speed and 20Mbit/s upload speed service s its new entry level product for residential customers.

Business customers can get a 1Gbit/s symmetrical service for a wholesale price of $275 a month.

This is great news as it gives customers a real reason to move to fibre. Stuff 30/10 – if I can get 100/20 for the same price, I know where I’m going.

It’s good for Chorus too, because the more customers taking up fibre, the fewer there are on copper which, as you know, is fully regulated and will be providing far less revenue in the future than it did in the past.

Ultimately, we want more investment in fibre, more customers using fibre and less effort and money spent on the copper network. Once the fibre has been installed to my house, I’ll be ringing someone (Telecom, presumably) to come and take out the copper connection.

For many in government, this question of what happens to the copper network is a big issue. I don’t see it that way. Eventually, 75% of the population will have fibre to their home. At that point, the copper network in those areas can be switched off and pulled out of the ground. It is surplus to requirements and given the price of copper on the open market, should fetch quite a pretty penny.

On top of that, Chorus won’t want to keep two networks operating when it doesn’t have to. I would back switching off copper to that 75% as soon as the lines are in. It’s not forced migration, but it is a one-way door. There is no going back once the fibre is connected.

That leaves us with the 25% of the population that won’t get fibre under this current project. That’s also clear cut, in my view. Chorus is still required to offer those essential services, the old Kiwi Share services, to that population base, and until there’s an alternative it must continue to do so. Of course, we need to come up with that alternative as quickly as possible, and make sure it’s capable of delivering on the broadband future promise.

At the recent NorthPower launch celebration, the Prime Minister hinted that the UFB network isn’t going to be static once it’s completed. He suggested (vaguely, mind you) that there could be more to come, and frankly that’s a good thing. Solving the rural broadband problem is going to be key to any future economic strategy in New Zealand.

There are caveats around Chorus’s new product set. These are commercial offers, and exist outside the Crown Fibre contractually-obligated regime. They’re Chorus offers, so may not be offered by the LFCs who will once again be miffed at Chorus making changes they’ll have to either match or ignore. By going it alone, Chorus runs the risk of alienating its LFC partners and we could end up with a two-tier structure of Chorus versus the LFCs. That’s down to Crown Fibre’s management plans, and I’d strongly urge CFH to do more to coordinate these kinds of activities.

The devil will be in the detail, as ever, and we need to know about the quality of the service. What will the committed rates be, what happens next year when these contracts expire – will the prices go up – and what role, if any, will the Commerce Commission have in the future fibre price disputes, because these are commercial products, not the ones offered through the Crown Fibre contracts and so, presumably, are open to regulation.

But when you’re facing declining revenue in the copper world, as we’ve said all along, the best way forward is to encourage the migration to fibre and these new plans should certainly help with that.

Still not content with content

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Every few weeks I join a panel discussion on Radio Live to talk about technology, social media and mobile apps. It’s fun, I get to meet some cool people and we discuss the issues of the day.

Last time I was on I caught the end of an interview with Damian Vaughan, head of Recorded Music NZ, the newly merged body that seeks to represent music creators in the New Zealand copyright space.

I don’t know Damian at all but he said something that intrigued me. He says people who download content won’t pay for it even when it becomes available online in the format they desire (it’s about 15 minutes in if you want to hear it directly).

I have to say that’s not my experience at all. I’ve bought more music since getting an iPhone than I have since I was a teenager. I hear a song, I use Shazam (possibly the finest piece of software I can think of) and 30 seconds later it’s being downloaded to my library. I pay, and I’m happy to do so because the process is simple and straightforward and the asking price is reasonable.

I can go one step further and just subscribe to a streaming service like Pandora or Spotify. I don’t, because I’m old fashioned enough to want to “own” that particular track. I carry the complete works of Shakespeare around on my iPad for much the same reason – there’s something almost tactile about having such things to hand.

My kids, however, are still absorbing new music like sponges so they’re all about the streaming services, and I would have been too if they were around when I was doing that kind of thing.

My point is, the consumer of content isn’t one type of person, it’s a whole range of people. It’s a bell curve – at one end are always going to be those who will steal online content. At the other end those that wouldn’t dare consider it no matter what. In between, however, is the mass market and if you can move those people away from piracy and towards paying for content then they will.

But you don’t have to take my word for it – there are actual stats to back this up.

Ofcom, the UK broadcasting and telecommunications regulator, commissioned a study into just this phenomenon and it turns out that people who pirate content are also the most engaged with the content and are more likely to buy content online.

The top 20% of infringers accounted for less than 2% of all users, but were responsible for almost 80% of all infringing. Yet they also on average spent more on content than the bottom 80% of users – £168 versus £105 – and much more than non-infringing customers who spent a measly£54 over the six month period covered.

This would support the theory that downloaders just want access to content and will pay for it where they can. It helps explain why a TV show like Game of Thrones can simultaneously be a raging success in terms of those that pay for it, but also the most pirated TV show of the year.

The music industry has found the solution to piracy – make your content available online without getting in the way of the customer too much. Remember when you had to buy an entire album just to get that one song?

The TV industry has yet to reach the same conclusion, and the rights issues in television are vastly more complex than in the music business, but ultimately it will have to go the same way. It’s too late to stuff that genie back in the bottle and if the music industry is anything to go by, you probably don’t want to anyway. You’ll make more money if you work with the pirates instead of trying to stop them.

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Product disclosure

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Last year, under threat of regulation, the telco industry came together to put together a broadband product disclosure regime.

The idea was a good one. Let’s provide the same information across various ISPs so customers can better understand what they’re buying and what goes in to each plan.

The minister of communications, Amy Adams, likened it to the car industry’s window ticket, which details just how many kilometres the car has done, whether the odometer is accurate, that sort of thing.

Telcos had to consider how to boil down all the information they have about the services they offer and make it user-friendly, or at least readable. Apparently the goal was to make an offer summary card that would make sense to the minister’s mother. No, really.

Putting aside my misgivings about building an entire disclosure regime around the needs of (forgive me) the lowest common denominator customer type, the final product is acceptable.

If you want to know how much international bandwidth your ISP is buying, or how many customers are sharing your line, or what national backhaul arrangements your ISP has, you’re out of luck. All of that was deemed too “techy” for customers.

Instead, the product summary will tell you how much you’ll pay each month, what the upfront costs are, whether there’s an early termination clause and how much that will cost and whether or not the company belongs to the Telecommunications Dispute Resolution scheme.

This kind of basic information has always been available, but at least now you’ll get it on one page and in a format that should allow you to compare plans before you buy.

Given the lack of technical information, the one thing I did kick up a stink about during the working party process is that traffic management schemes must be explained in some detail. Customers who want to download a lot of stuff have in the past found themselves added to a pool of like-minded downloaders, and so have an “unlimited” plan that has major limitations on the one thing they want to do.

I don’t have a problem with traffic management plans, but when the telcos hide that information away it makes buying decisions doubly tricky, and I pushed in a big way to have the information disclosed in enough detail. After all, the idea behind the product disclosure regime is that customers are informed and make informed buying decisions.

Today, Telecom has announced an “unlimited” range of plans. They’re unlimited in terms of how much you can download and at $139/month for the fastest of the fibre plans (100Mbit/s down and 50Mbit/s up), they look like a good idea.

But in the product summary sheet, the section on traffic management is less than helpful.

“We may use traffic management policies to make sure that the available bandwidth on the network is shared fairly and efficiently between all users. Certain types of traffic may be de-prioritised so that general web-browsing, real time applications like Skype, online games and streaming video services perform better.”

Using words like “may” and “certain types of traffic” does nothing to help the customer. If you throttle P2P traffic, say so. If you apply the rules at certain times of day, say when they are.

I had a quick look at the other major ISPs with similar plans and their statements.

Vodafone’s traffic management statement is quite a bit better:

“P2P (Peer to Peer) is primarily used by a small number of higher-end broadband users. We are not anti-P2P however if our network is congested then P2P-type traffic will be the first to feel the pinch. We will always prioritise the more mainstream traffic types (such as web and email) over P2P as this will have the greatest benefit for the greatest number of customers.

If you are a customer who uses P2P a lot, then we ask that you try to keep your usage to our off-peak (10pm – 6am)  when there is the most capacity available.”

Slingshot does have an unlimited plan and its offer summary says:

“We may use traffic prioritisation policies for our plans at any time to improve the overall performance amongst our customers. Our Unlimited One plan throttles P2P downloads. If you require P2P downloading you should opt for our Unlimited Plus plan.”

Which helps guide your buying decision.

Orcon’s is cleanest, I think:

“Our policy is to provide our customers with the best possible internet experience. This means that we do not shape internet traffic when you (and everyone else) are streaming videos, sharing files (P2P), gaming or browsing the web at any time. We always make sure that we have tonnes of national and international bandwidth to cater to all users.”

although since you can’t cut and paste from the PDF it’s also the most annoying.

These kinds of things are important because without that kind of information, customers simply don’t know enough about the product they’re buying.

I’m encouraged by the growing number of unlimited data plans that are coming into the market. Telecom, Orcon and Slingshot all have them at a range of prices and as three of the top four telcos, that means most customers are within reach of not having to worry about over use charges ever again.

And I’d encourage Telecom to have a closer look at what it’s telling its customers. It’s nearly there, just needs a nudge in the right direction.

Spectrum fight goes on and on

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The Commerce Commission has again delayed giving clearance to Telecom to buy the last block of management rights for 700MHz spectrum.

To recap: the government auction saw three bidders (Telecom, Vodafone and 2Degrees) able to buy a maximum of three lots of spectrum each.

Telecom and Vodafone did just that, but 2Degrees only bought two lots, leaving one block of spectrum on the table.

The advice to government from all parties was that it should remain there until the technology to deploy services on 700MHz was rolled out – implicitly, until 2Degrees could afford the extra block.

But the government decided it wanted the cash, so raffled off the last block to the highest bidder. 

Neither Telecom nor Vodafone would back down, or let the other side get the spectrum cheaply, and ultimately Telecom won, but only by bidding $83m for it. By contrast, each telco paid only $22m for the same sized block in the original round.

Telecom now needs permission from the Commerce Commission to buy the additional chunk and clearly, that’s proving to be a long time in coming.

The problem is that Vodafone has around 300MHz of available spectrum, Telecom 200MHz and 2Degrees around 100MHz of spectrum altogether.

In the all important sub-1000MHz category, Vodafone will have around 60MHz, Telecom about the same and 2Degrees will have around 40MHz.

EDIT: Stuffed up my numbers – the above paragraphs have changed to reflect the real figures. Apologies all.

That means that like for like, Vodafone can pack on three times the number of customers 2Degrees can service, and offer them the same performance. Or, looking at it the other way round, it could offer the same number of customers three times the capacity.

That puts 2Degrees in a very tricky position, and I suspect if Vodafone had won this bidding war for the last chunk the Commission would already have made its mind up and said no.

Telecom, however, is a trickier proposition, positioned as it is half way between the two. Would allowing Telecom to buy the last chunk impact on competition? Should the Commission allow it to go ahead?

TUANZ argued that the last chunks should be left on the shelf, that if either Telecom or Vodafone get to buy it, they’ll put 2Degrees in an almost untenable position. Sure, 2Degrees can offer a service and it will still be able to use the spectrum for 4G services, but one of the beauties of 4G is its ability to aggregate spectrum and use chunks of spectrum scattered far and wide to deliver a service. That means the player with the most spectrum wins.

We already have a perilous situation in telecommunications in New Zealand. We have two players who dominate almost every market segment – mobile, broadband, toll calling, you name it and “Telecom and Vodafone” account for well over 80% of the customer base and revenue.

We need to make sure 2Degrees isn’t shut out of the 4G market, and beyond, and the easiest way is to make sure it has as near a level playing field in terms of access to spectrum as is possible.

I’ve pondered on why the government would auction the spectrum in the way that it has. The auction was conducted in secret, behind closed doors, and unlike previous years has been split into two halves. We’ve only had the first part of the fight – how much spectrum do you want. Once the Commission has decided on this issue, we move on to round two – which blocks of spectrum do you want? Each company will have to bid again to determine where on the 700MHz range their lot lies, and there’s only one reason you would do that – to make more money.

$22m a block is not a huge amount, but it’s only half the battle. We’re yet to see quite how much this contest costs but one thing is clear – customers will end up paying for it one way or another.

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The high cost of rural broadband

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Watching the Australian NBN project implode in a shower of nonsensical, politically-motivated decisions (and indeed non-decisions) has been breath-taking in both its cost and its impact.

Instead of a fibre to the home project, the NBN will now be a mix of fibre to the home for very few, fibre to the node (aka the cabinetisation programme Telecom New Zealand ran in the early 2000s) and fixed wireless services for rural Australia.

If it sounds familiar it’s because in many regards it now mirrors the New Zealand UFB and RBI projects. Over here we have a fibre to the home project for 75% of the population and a blended fibre, copper, fixed wireless model for most of the rest. Those in hard-to-reach places will still have to put up with a satellite service, as indeed will their Aussie counterparts.

Australia’s communications minister, Malcolm Turnbull, says one of the biggest problems in rural Australia has been the overwhelming demand for broadband.

Speaking at the Comms Day  summit in Sydney yesterday, Turnbull says there was a “material underestimation of likely demand” in the fixed wireless areas.

“So instead of an assumed takeup rate of 22-25%, the work done so far by the strategic review team has modelled demand in the satellite footprint to be between 50-63%, and 38-51% in the fixed wireless footprint,” says Turnbull. But even those figures turned out to be low.

“Taken together, the company’s modelling shows that demand in the non-fixed-line footprint was underestimated by two to three times – instead of the forecast 230,000 connections, actual take-up would result in 440,00 to 620,000 connections.”

That’s a remarkable under-estimation of demand. Speaking to rural customers and would-be users (those that can’t get anything at all worth speaking of), I’d say the same level of demand exists in rural New Zealand.

Forget 5% average uptake as we have in UFB areas, rural New Zealand is clamouring for a decent service.

So how do our figures for take-up compare?

Sadly, we don’t have any. The minister of communications releases detail around how many kilometres of fibre have been laid and how many cellphone towers constructed, but not a word is said about usage.

I’ve not found any customers who are using the service, so I can’t tell you even anecdotally about uptake rates.

However, yesterday I was on a Google Hangout chat with John Butt from TrueNet, the company that measures broadband performance around the country.

John tells me he has 400 probes in action at any one time, measuring usage from all sectors of the industry. In total he has around 1200 testers willing to take part, which gives a good spread across providers and technologies. He has DSL probes with customers of most ISPs, UFB probes, cable probes and while most are in urban areas, he has some in rural New Zealand.

He has only two testers using the fixed-wireless RBI service and one of those is moving to DSL.

Given the extraordinary level of demand from rural customers and the ever-increasing availability of RBI service, why are there so few?

The answer may well lie in the price. Vodafone promised it would offer pricing that was comparable with urban prices and one way it has – the price itself. I can get a plan from Vodafone for either fixed or fixed wireless service for about $95 a month.

On the urban service, customers get voice, ADSL2+ broadband, a free MySky box and free calling to five New Zealand phone numbers.

On the rural service, you’d get voice, fixed wireless broadband and free national calling (a nice touch since local calling in rural New Zealand is quite limited). You’ll also have to pay an installation fee as a truck-roll is required – either $99 or $199 depending on your situation, but for that you’ll also have to sign a two-year contract. If you want it without a two-year contract, it’s $699 or $849.

Broadly speaking they’re not too far part. You can get a discount off each if you have your mobile with Vodafone but generally speaking, they’re comparable.

Except for the data. The urban service includes 150GB of data while the rural service has only one tenth of that – 15GB.

There are other plans, but they follow the same pattern. On DSL you get up to half a terabyte of data, on fixed-wireless you can have up to 30GB of data before the over-bundle charges kick in.

Try running your rural business on that, let alone running your household as well.

We need to not only provide the infrastructure, we need to provide a decent service, or face having a rural New Zealand that is left behind, much like Australia will be.

Of course there are other providers, not just Vodafone, but as the lead retail provider on the RBI it’s to Vodafone most RBI customers will turn.

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IPP vs FPP: What the High Court has to say about it all

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The High Court has ruled against Chorus in its battle to overturn the Commerce Commission determination on UBA pricing. The ruling can be found here.

This possibly won’t be the end of it – it’s unclear yet whether Chorus can or even will appeal the decision further – but for now we have guidance on how Section 18 of the Telco Act should be applied.

I’ve written about s18 and what it means for the industry elsewhere – in brief, due consideration must be made by the Commission to the needs of investors in new technology.

The Commission argued that it couldn’t go beyond the available evidence when considering its responsibilities under s18, that it couldn’t take in all the evidence, discuss the matter with the industry, work up a draft and then a final determination and then throw it all away because one clause of the Act says it should consider the needs of investors in new technology.

Chorus argued that the Commission should apply s18 at every step of the process and that by waiting until the end to apply s18, it had erred in its interpretation of the law.

“[Chorus argued that] s 18 is a mandatory relevant consideration, which must be applied at every point where a material judgment is made that affects the ultimate result. That would include process decisions, decisions of exclusion of eligible benchmarks, investment in further information gathering, decisions on the  range within which a price point would be selected (if there is any narrowing of options at that stage), and selection of the final price point.”

The Judge, the Honourable Justice Stephen Kos, disagreed with Chorus and said:

“In my view the statutory language is not prescriptive that s 18 is a consideration borne into (and interwoven through) the benchmarking analysis to be undertaken by the Commission, at the evidential stage. Indeed, I can see every reason why it would not be. That sort of external consideration does not seem to me to form a relevant part of the evidence-gathering exercise. Rather, it is relevant to what to do with the evidence once it is obtained.”

The Commission’s argument around s18 is that it can’t be used to move the determination outside the process laid down in the Act, and it’s that which swayed the Judge’s decision.

The whole issue has arisen out of the difference between the Initial Pricing Principle (IPP) and the Final Pricing Principle (FPP) and as the Judge points out, the very reason we have an IPP in the first place.

Conducting an FPP is a lengthy, laborious and costly task. It requires the Commission to build an economic cost model for the service being regulated, based on an efficient supplier’s costs.

Typically these things take a very long time to build, involve much shouting and wailing from all parties and are used only once or twice before being discarded, surplus to requirements.

Because of that, the recommendation (originally made way back in the Fletcher Inquiry of 2000) was that the Commission use a cheap and cheerful benchmarking exercise for the easy stuff. That is, instead of building expensive bespoke cost models, it would simply benchmark against countries that use a similar methodology to New Zealand.

In the past this has been enough for the parties involved. Until now, nobody has called on the Commission to conduct the full FPP process. We’ve looked around the world, found similar regimes and compared our price with theirs. It’s not perfect, but it’s supposed to be quicker and cheaper.

In this instance, the IPP found a benchmark set of only two countries, which certainly alarmed both the Commission and the telco industry. However, after conducting its usual tediously transparent process that included input from all the parties, including the users and investors, the Commission ran a cross-check against a wider group of countries that included a set that were excluded from the final group for various reasons. That range ran from $6.56 to $11.45, effectively bracketing both the draft determination and the final $10.92 price determined by the Commission. Nothing the Commission did fell outside the law.

Which raises an interesting question – if the IPP is supposed to be the quick version, how does the Commission think it can conduct a full FPP for not one but two services in ten months, when the IPP process took far longer?

But that’s a question for another time. For now, the High Court has handed down confirmation that the Commission’s process follows the law as it stands and even, at times, exceeds the expectation.

To quote the Judge once more:

“The Commission has exercised a judgment, as it is required to. It has done so following a process probably more extensive than Parliament had in mind. It certainly took longer than Parliament had in mind. It is worth reminding ourselves that the Fletcher Inquiry, the progenitor of this IPP pricing process, had in mind that New Zealand could simply piggy-back international evidence, and that the result would be a “quick and cheap” process compared to the FPP cost-based modelling approach.”

The Commission hopes to have the FPP decision completed and made public in time for the 1 December deadline. I’m no betting man but I think that’s optimistic and we’re more likely to see a result this time next year, if not later.

That final price? I’d say it will fall to below $10 per line per month.

 

TUANZ Needs You

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Yes, you.

You must be able to run a business, put on events, manage a blog and newsletters, book your own flights and accommodation, check your own spelling, drink vast quantities of coffee while retaining your ability to speak coherently, build presentations, present presentations, talk to journalists, front up on camera, on radio and online, read policy documents by the thousand, write policy documents by the hundredweight,

You must be able to cope with hundreds of pages of tedious economic theory and argument.

A sense of humour is quite important.

It’s quite a straightforward job. Is this (whatever this is) good for the consumer? If it is, then you support it. If it isn’t, then you oppose it.

It’s quite a complex job. What should the weighted average cost of capital be? What are your thoughts on TSLRIC as a model and how does section 18 of the Act apply in the real world? Does price elasticity really apply?

It’s quite a fun job too – you get to argue your case with people who really don’t want to hear from customers at all. You get to be a union representative for users everywhere, you get to be an economic development agent of change, helping to focus policy makers at all levels on the issue of communication at its most fundamental.

You will represent the customer at various industry groupings. That means you must be able to put up with countless hours of corporate speak, naked greed and sly sideways glances. Being able to roll your eyes discreetly is preferred, but not essential. Being able to yawn with your mouth closed is also a great help.

Multitasking is a given. Around 90% of your time will be spent on policy matters, a further 30% on reactive media calls, 30% on pro-active media calls, 70% on operating the business of the association itself and 10% on paperwork. Consequently you should be able to fill in your credit card receipts while sitting in a working party meeting, writing a blog post and replying to a media enquiry by TXT message without spilling your drink.

You’ll get phone calls from elderly customers who are being ripped off and don’t know who to turn to. You get to help them out. 

You’ll meet people who can help, meet people who can hinder and meet people who make a difference. Some of the job is about talking but even more of it is about listening. Mostly, your job is to communicate and that, oh the irony, is the toughest bit of being in the telecommunications industry.

If this sounds like you, or you want to know more, send me an email and I’ll pass it on to Pat O’Connell, chair of the TUANZ board. He has a position description that differs only somewhat from what’s written here.

Good luck to you all.