Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Chorus VDSL plans a concern, but no surprise

Chorus VDSL plans a concern, but no surprise


By Cameron Beattie


The recent proposal by Chorus for significant changes to the regulated unbundled bitstream access (UBA) services it offers, is both concerning, yet not surprising.

In May, Chorus announced a new set of commercial copper broadband products, including a next-generation VDSL offering, and that it plans to withdraw its regulated VDSL service.

Essentially however, these services will compete against the regulated UBA it also offers, as part of its commitments under the UFB roll-out.

This has led to complaints from ISPs resulting in the Commerce Commission launching an investigation into whether the proposed changes are an enforceable breach under the Telecommunications Act.

As a supporter of free-market economics, I support the idea of commercial products competing with regulated services, as this can result in greater innovation and better services for end users.

However, I agree with the Telecommunications Commissioner Dr Stephen Gale’s concerns that regulated services “must be properly maintained and not be eroded”.

The risk with the proposal from Chorus is that that is exactly what is likely to happen.

It is no secret that Chorus is under a great amount of pressure.

On one hand it is committed to a capital intensive roll-out of fibre to 75% of New Zealand and on the other, the regulated wholesale price of its UBA services is set to be reduced next year.

Chorus has warned such a price cut will cost it $1 billion.

Replacing the regulated VDSL service with a new commercial offering is clearly a move aimed at being able to better control the price of the service.

Considering the massive capital investment required by the UFB roll-out, Chorus’ motivation is naturally to drive as many people to fibre as possible.

It agreed to the UFB contract based on certain revenue assumptions determined by how many fibre connections it can sell.

However, under a new pricing regime, regulated VDSL could hamper fibre uptake.

The key problem for Chorus is that every $10 that comes off the retail price of VDSL will make it harder for fibre to compete.

For the vast majority of people the choice a broadband plan comes down to price. If they can get a plan with an acceptable speed and data allowance for $80 a month, most average New Zealanders will choose that over a faster $100 connection.

Most will see little value in paying more for the extra speed and bandwidth of fibre when a VDSL connection meets their needs. For many it would be like paying extra to have a 9 seater van when a four seater family car will do.

It is therefore not surprising that Chorus will do whatever it can to protect its bottom line and its investment in the fibre network.

And it’s here that the issue lies for internet users.

By replacing a regulated service with a commercial product, ultimately customers could be paying more for their internet access than they need to.

As an internet-based business, any changes that could result in higher internet access charges for New Zealanders is of great concern.

We therefore support the Commerce Commission’s investigation into Chorus’ proposals.

Cameron Beattie is Managing Director of Conversant – a provider of cloud-hosted communications systems, which enable businesses of any size to enjoy the benefits of an advanced PABX without having to buy the hardware.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news