Telecom separation day broadband price rise a 'body blow'

In an ideal world, people would switch to fibre connections rolled out pursuant to this agreement the government’s 10-year, $1.35 billion Ultrafast Broadband initiative because they were faster, better, and attractively priced.

Averaging the urban and rural pricing into a single "average" price will bump up the cost by about 20% for urban homes and businesses.

Twist Today

A twist Today, the Commerce Commission published a series of decisions on the implementation of the Telecommunications Amendment Act.

They include averaging calculations – and wholesale price rises on phone lines that will kick in three years from Telecom’s separation on November 30. Retail ISPs aren’t happy about this averaging, however have long been bracing for it.

But there's as well a twist, which many had not anticipated: for a new naked DSL connection, the averaging "uplift" will apply not in three years, however within days. The higher rate will apply from November 30..

The Orcon boss said averaging

The Orcon boss said averaging, and the attendant price rises for naked DSL lines, would make it harder for ISPs to market VoIP (Voice over Internet Protocol) services.

"Just when competitive voice services just as Genius [Orcon’s VoIP phone and service) are getting off the ground, the whole proposition of VoIP gets dealt a body blow," Mr Bartlett said.

It made no sense for a naked UBA copper broadband connection to be more expensive than fibre.

Strangling naked DSL at birth Telecommunications Users Association chief executive Paul Brislen said his organisation was pleased to see the commission had split its undertaking in two, and would look at international benchmarks in other words than rush into pricing decisions that would hold for years.

"Naked DSL is in its infancy in New Zealand but all the international trends suggest clients are quite happy to dump their voice line at home in favour of a cellphone however still need fixed-line broadband services.

"Naked DSL enables that, and with the Ultrafast broadband project focusing largely on businesses, schools and hospitals in the nearly term, New Zealand consumers will be stuck using copper for several years to come. It's important we don't squash this newly emerging market as late as this in time."

GOING NAKED: Associated with the copper connections most use today, a "naked DSL" plan lets you subscribe to a landline broadband connection only, and lose your $42-a-month phone line. It's useful for those who want to make all their voice calls via cellphone, or use the likes of Google Talk, Skype or a VoIP handset to make calls over the internet. Even though Orcon has made the most noise about VoIP and naked DSL, most ISPs now have similar plans. The notable exception is Telecom Broadband, which with its keenly priced Total Home package is pushing clients in the other direction, encouraging people to buy a bundle of services that includes a traditional phone line.

Another National party stuff up. The only two policies introduced by National and sponsored by John key were the Ultrafast broadband and the cycle tracks - both are disasters in the process of happening.

The ultra fast broadband is now old generation innovation and by the time it is rolled out it will be like using the old rural telephone shared lines and exchanges.

The Government is shoring up their investment

Looks like the Government is shoring up their investment and on short notice services are getting more expensive. A bit of a slap in the face when over in the States, companies like Century Link offer up to 12meg Internet for a fixed price of $20 per month on copper.This determination has the carriers themselves paying more than that just for the access. When you consider the network and business costs associated with providing service and the margins required to operate profitably, I don't think New Zealanders will be getting any price relief in the nearly future.