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Gigatown turns into a Giga challenge for Chorus

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One more post before bedtime, now that I’m back in the temporary VDSL equipped TUANZ cave in #gigatownporirua.

I’ve had a flight back from Auckland, (cut off from my feed to the internets) to think about what Ultra Fast Fibre’s declaration of their central North Island patch as the ‘Giganet’ means for Chorus.

And what it means for us as users and how I think its the most exciting thing to happen in the UFB world since Northpower finished their build.

In military terms this has been a brilliant piece of asymmetric warfare, a judo throw that Vladimir Putin would be proud to call his own.

Chorus will now be compelled to re-evaluate the entire gigatown proposition because its just had a whole lot of the gloss removed:

1.   The winning gigatown no longer enjoys the advantage of the ‘Southern Hemispheres’ fastest internet.

2.   The 3 year stint as the gigatown is also meaningless as UFF have declared that its package will run until 2020 – which is the big bang year anyway in terms of UFB evolution

3.   The winning gigatown will have the cheapest wholesale, residential gigabit service but that may not translate into much of an advantage in what will be a much broader residential gigabit market.

4.   The winning gigatown will still enjoy the Alcatel Lucent innovation fund, but the economic development benefit is seriously diluted.

I think there will be quite a lot of angst out there in the gigatowns tomorrow (disclaimer I am part of the #gigatownporirua team) because the competition has required a lot of energy and commitment from largely volunteer teams (think Top Town meets social media). The competition and rivalry is fierce and intense, the creativity that has been unleashed is inspirational and overall it has got us all thinking about what the UFB can mean for our communities.

So what can Chorus do?

The options as I see them are:

1.   Box on like nothing’s happened

2.  Use the ‘Team Oracle USA’ like clauses in the gigatown T&C’s to pause and look for a reset

3.  Match UFF and declare everybody a ‘GIGATOWN’ (my preferred option)

I think Chorus owe it to all the towns who have played the game by their rules and who have sunk what I think must be millions of dollars worth of community time and energy into gigatown to show that they are serious about our giganation.

So whats in it for us as users, this is the stuff that rocks

1.   RSP’s now have the incentive to get really creative with UFB products, speed is no longer a limitation!

2.   The developer community can now start to build ‘gigabit grade’ products and services with a good sized local sandpit (even bigger if Chorus come to the party)

3.   UFB consumers will get world class connectivity

4.   The rest of the stack (backhaul and international) will get an increased incentive to open the pipes so we really will get genuine gigabit grade experiences

5.   There are going to be huge possibilities in education and health

6.   This will speed up the copper transition and force all the RSP’s to get serious about UFB

7.   The market for fast WiFi is going to go nuts!

8.   Aussies are going to be sooo jealous 

9.   The Government might feel so good about the giganet they’ll get behind other good ideas like Northpower’s rural fibre plans

10.  The belt of towns from New Plymouth to Tauranga is hugely important to all our current export industries and it is home to our mighty ‘Agritech’ sector (think Gallaghers etc)  – which I believe is our best shot for a global ICT niche we can own. So the Giganet is really, really important to our collective future.

I’ve been involved in the fibre dream in NZ since 1999, when I first got a CityLink connection in downtown Wellington, I helped get regional fibre extended across Nelson, Marlborough, Tasman with NMi and the Broadband Challenge.

But this development today has got me more excited as it moves us from a rationed future (just one gigatown) to one that is brim full of possibilities (a whole giganation?) because the UFB is now really going to be Ultra Fast.

I think I need a lie down now, I hope I don’t wake up tomorrow and find it was all a dream.

 

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Gigatown

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Chorus has launched a promotion that will give one town in New
Zealand gigabit speeds on the Ultra Fast Broadband network.

One gigabit per second is fast. OECD rankings suggest that only
four countries in the world offer national 1Gbit/s plans – Turkey, Slovenia,
Sweden and Japan (this was in 2011 so there may be more by now) and that most
top out at about half that speed.

We’re talking about 1000Mbit/s. Today I get 15Mbit/s
download so to call it a step change is something of an understatement. My
upload speed is barely 1Mbit/s.

We tend to get complacent about the fantastic advances
technology makes each year. A doubling of capacity, a tripling of speed, these
numbers become run of the mill and users are blasé about them. But a thousand
fold increase in my upload speed would be startling to put it mildly, so good
on Chorus for trying this out.

The economic potential of offering such a service is
astonishing. Think what having such a speed would do to the way we think about
remote working or having to live in the main centres. Think about what access
to the world at those kinds of speeds would mean for start-up software
developers and to our migration patterns. Software companies should be lining
up for our cheap housing and staff with no fear of us being too removed from
the world.

Movie studios would look more to New Zealand for filming opportunities
than they do today – getting the rushes sent back to LA or New York or further
afield to the UK or Germany is a major problem and it’s not the international
leg so much as getting the footage out of Wellington and up to the Southern
Cross Cable.

But I have a question. Given this capability is clearly
available today, why are we talking about an entry level product of 30Mbit/s
download speed? Why are we talking about an upload speed barely ten times what
I get today?

Why aren’t we talking about an entry level plan of 100/100
followed swiftly by 250/250 and 500/500? Why aren’t we offering 1000/1000 at
launch?

Speeds like these would help encourage people to move to
fibre in a way that talking about 30/10 plans simply won’t.

The entry level price point is on par with copper and the
entry level speed is on par with copper so why on earth would I shift over?

No, the real lesson from Gigatown is that we should all have
that kind of capability and we should all have it sooner rather than later.
Only then will we see all those nice things in the video come to fruition.
Economic development, e-health initiatives, educational opportunities, rural
regeneration, population increase, regional development.

Suddenly, the entry level product is the barrier to uptake,
not the enabler. It’s time we revisited the UFB’s promise if we’re ever to
achieve the future depicted in the Gigatown promotion. 

Chorus goes mainstream with VDSL

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Chorus has announced it will introduce VDSL to the mass market
as part of the wholesale bundle currently available to retailers.

That means instead of the niche, pricy product we see on the
market today, VDSL will cost the same to the retail ISPs as ADSL products do
today.

This is a fantastic move and one that TUANZ has been backing
for quite some time for a number of reasons.

Firstly, most residential users won’t see fibre for several
years to come. In order to help drive demand for fibre, TUANZ has long
maintained that VDSL is the perfect introduction to faster broadband services.
If I can get 30Mbit/s down and 10Mbit/s up on copper, when fibre finally does
arrive in the market I’ll be more interested in the 100/100 plan than the entry
level stuff. This is great for the retailer (better margins) great for the
network provider (better uptake) and great for the economy because we’ll have
more people keen as mustard to take up the fibre offering.

Secondly, it’s a way out of the copper wholesale price
debacle foisted on the industry by the government’s clumsy intervention in the
Commerce Commission’s wholesale price determination.

The Commissioner is required under the Telecommunications
Act (introduced by the current government in 2010) to in effect review the
wholesale price of ADSL services and move from a “retail minus” model to a “cost
based” model. That move would see the wholesale price of ADSL services slashed –
something that Chorus screamed blue murder about and which the government
foolishly accepted would hurt uptake of fibre.

As we discussed in our submission on the copper pricing,
VDSL is an unregulated service and the simple answer to Chorus’s woes is to
move as many customers over to that unregulated offering as possible, because
the margins for Chorus would be much better than under the regulated scheme.

EDIT: Chorus tells me it has not matched the regulated wholesale price but rather, added VDSL to the regulated price list. That means whatever the Commerce Commission decides for copper pricing VDSL is included alongside ADSL. This intrigues me – more on this in future I expect.

Thirdly, this should be great news for the retail ISPs, who
have a pent-up demand for faster broadband but a lack of opportunity to deliver
it in the market. By offering faster broadband today, the retail ISPs will be
able to build the products and services that we all want – content,
predominantly, for home users, but also cloud services for SME businesses and a
range of other things we don’t know we need yet.

Once they’ve built that customer base they will have a much
easier time of it moving them over to fibre once the network is deployed.

Chorus appears to be having a bob each way on the whole
question of migration – VDSL will only be offered until the middle of 2015 and
will stop selling it as fibre is deployed (where Chorus has the UFB – I wonder
if it will continue to offer VDSL in areas where it isn’t the UFB operator),
but by then we should be well on the way to migrating to fibre. We’ll have to
keep an eye on that – if the rollout slips then we’ll need to talk about
keeping VDSL on, but I have high hopes that we won’t need it. It’s a useful way
of “encouraging” customers to migrate – either go back to ADSL speeds or swap
to fibre. I know what I’ll be doing.

Of course, VDSL has its limitations (one of the reasons why it is not a
competitor to fibre). It’s only better than ADSL in a very short-run scenario
(less than 1000m as the copper lies) which means some customers won’t see any
difference at all and so won’t be encouraged to move over.

Ironically, given the Australian situation at the moment, we already
have in place a “fibre to the node” network that means most of us are a lot
closer to fibre today than we’ve ever been in the past. The upcoming Australian
election is likely to see a change in government and the chances are they’ll
scrap the NBN deployment in favour of the same kind of network that we already
have today.

This is great news, and now I’m left with just two questions – how much
will it cost and when can I have it?