Will Chorus go for the nuclear option?

How’s your broadband?

If you’re on copper, it’s probably “OK”, if mine is anything to go by.

I get about 12Mbit/s down and 1Mbit/s up, which is tedious but it is a residential area so what can you expect?

Because I’m on an unbundled line I don’t get that dramatic drop off in capability when the kids all arrive home from school and that’s just as well. I do get chucked off the computer by my own kids but that’s another story entirely.

But what if your copper line becomes fully contended and fully utilised all the time? What if your line ran as well as it does (or as poorly as it does depending on your view) when the kids come home from 8am to 8pm every day?

The key to this is contention – how many customers are allowed to use the line at any given time and the minimum rates set by the provider of the service.

With Chorus, the minimum speed for UBA is a handover of 32kbit/s.

That’s not a misprint – it’s kilobits per second. Dial up speed, in other words.

If you’re paying for broadband you might think you have a right to expect broadband speeds constantly, but unfortunately our system in New Zealand doesn’t really work like that. We’re all sharing the line and so when someone uses a lot of capacity, we get cut down to size. Sadly, that size is miniscule.

This is one of the key differences between copper and fibre. The handover speed of UBA is 32kbit/s. On the entry level fibre plan it’s 2.5Mbit/s.

That’s a world of difference and that alone means it’s worthwhile making the change from copper to fibre.

However, I’m not telling you all of this to encourage you to migrate.  No, I’m telling you this because I’m hearing a growing concern from ISPs that Chorus will begin enforcing this handover rate as a way to get more money out of the ISPs.

Currently, Chorus doesn’t enforce the handover at that speed. There’s bags of capacity, and this is a minimum remember. At worst, your service could run as slowly as 32kbit/s and still be called broadband.

Picture this – on the day Chorus switches everyone on UBA over to its bare minimum 30kbit/s, every customer in the land will ring their ISP. The call-centres will melt under the volume, the newspapers and radio will get involved, everyone will want to know where their broadband went. Simple, says the ISPs, Chorus took it off you. Chorus will say but we’re meeting our service level agreements so there’s no problem. If your ISP hasn’t bought a better service off us, that’s its fault. Talk to them.

ISPs would be forced to buy a more expensive product to service the angry customers but would either lose money on every connection or pass that cost on to customers. It’s the copper tax by a different route.

At the UBA conference earlier this year, the issue was raised and caused much alarm. The Commerce Commission directed Chorus and the ISPs to meet to discuss the matter, and they did so in early July. At that meeting, Chorus said it had no plans to introduce such a limit but it couldn’t rule out doing so in future.

One wag called this Chorus’s “nuclear option” because once you’ve done this to the industry and the customers there’s really no going back.

If this is how Chorus intends to solve its funding shortfall, by crippling copper services, then this fight is far from over. I trust saner minds will prevail.