Don't kill me, but local loop unbundling is not the answer
Now I'm not huge fan of Telecom. My DSL account is often sluggish, and it's not cheap (though it's on the 'bit expensive' side rather than outrageous by global standards, when you allow for the simple economics of our small, thinly-spread population). But - and please don't throw rocks at me for saying this - neither am I sure that the government leaning on Telecom to offer better wholesale broadband rates, or share access to its local exchanges (aka local loop unbundling) will have a lot of effect on how fast you surf the net. Here's why.
The key thing about the local loop is that it's mostly copper cable - conspiciously, the key bit that leads to your front door. Telecom offers broadband via DSL technology that juices the copper a bit to carry faster internet. But our bung old, overloaded copper loops have limits - which will be further, cruelly exposed if a bunch more people suddenly get DSL, or 'faster' plans - and are not the future of broadband. In countries with higher broadband penetration, it's not coming through DSL - so unbundling the local loop won't solve anything in particular. (It's also worth noting that although the local loop has been unbundled in many Western countries, the unbundling always took place at the time the time the state telco was privatised. Trying to do it after the fact would be a legal nightmare.)
The government's $25 million pilot fund to encourage residential fibre optic networks is a good start. So are the WiMax wireless trials being held by CallPlus and Nacom, and soon BCL (see Juha Saarinen's 'The Technical Guy' column in our March issue, on newsstand now, for details of some hands-on tests).
If CallPlus spent more time on its North Auckland WiMax trial, and less on campaigning for local loop unbundling, I'd be happier. WiMax (which pushes a WiFi signal for kilometres rather than meters) seems a lot more promising that Woosh's service, plus it has the clout of WiMax champion Intel behind it.
Similarly, under the Wood brothers, ihug put a lot of effort into a second wireless alternative to DSL, internet by satellite. Sure it had some drawbacks, such as only being one-way. But the technology is better now, as Juha found when he tested Iconz promising new X-Terrestrial two-way service for our Dec-Jan issue (see 'Broadband Man IV').
And in the next 12 months, we'll also see significant upgrades to Telecom's T3G network, and Vodafone's 3G. For many a 3G card (or, from later this year, chip) in their notebook could be the broadband equivalent of abandoning a landline for an all-mobile solution.
More and more broadband alternaties to DSL are on the way. That's a definite. Another definite is that, however, much the government leans on Telecom, the copper cable under my driveway will still be old, bent, and too far from my local exchange.
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Comments
I Know this is a late post but I feel as if it has to be said saying that the LLU is not at the best interest for the used user is completely rung what has happened in the months before the announcement not a lot we got unto 3.5Mb/s that works out to about 350KB/ps in real life it took telecom a really long time to get that far with Japan reaching 50Mb/s on ADSL we don’t camper since then what has happened wall I believe I can connect to the internet at about 6.5Mb/s that’s a end speed of 700Kb/s tops with a average of about 650Kb/s now shore ADSL 2 is faster and wimax probly is to but in Hastings we have one option unless you live next to the hospital with many people I know reaching speeds of tallest 550Kb/s we have seen a change already because telecom is worried about losing the market to other compels they have upped the aunty saying the LLU isn’t worth it you been proven rung already and it hasten even happened yet
Posted by: Anonymous | January 17, 2007 12:52 AM
Great reading, keep up the great posts.
Peace, JiggaDigga
Posted by: JiggaDigga | April 8, 2006 6:24 AM
I agree, unbundling is not in the best interests of end users. Unbundling will simply reduce the urgency currently felt for alternatives to copper ADSL.
Furthermore, love 'em or hate 'em (and most of us seem to be in the latter category) Telecom paid the going price on the day for the local loop. Sure, people can say that "it was a steal" or "the government didn't know what they were selling" but the fact is, the local loop is Telecom's, they paid for it. For people to suggest that Telecom should open up one of their prize assets to their competitors really sucks - it makes as much sense as saying that IHUG or Slingshot should open up their hardware to Telecom, or that I should open up my toilet to any stranger who wants a pee. Bollix !
Posted by: Bryan Flanagan | March 27, 2006 12:56 PM
Chris
You are right. Unbundling the local loop is probably not the answer to better broadband services. At best it offers a minor contribution to solving the issue, and here's why:
You can argue about whether Telecom has continued to put sufficient investment into the copper cable or not, but the fact of the matter is the cable is in the condition its in, and only huge investment is going to change that. Investment levels even Telecom has demonstrated it isn't prepared to make.
If the LL was unbundled, other ISPs would have to use the cable in the same condition it is in now, just like Telecom do.
Isn't it interesting that Telecom are laying fibre around our cities simply as fast as they can!! Strange that, considering DSL won't work over fibre.
So DSL probably isn't the solution to our long term broadband needs, simply given the condition of our cabling.
If the local loop was unbundled, here's whats likely to happen:
1. Telecom will fight the process the whole way - that means it ain't gonna happen overnight.
2. While the legal beagles wrestle with the process, Telecom will simply (and swiftly) roll out ADSL 2+, gathering up customers as fast as it can.
3. The legal issues associated with unbundling will force other ISPs to consider other alternatives anyway, if they are to keep up with Telecom's gobbling up of their customer base. So you'll still see Wimax and other technologies being invested in short term.
4. When the legal dealings are done with, other ISPs will 'cherry pick', putting hardware into those exchanges they can get the fastest return on. That means Auckland, and other centre CBDs.
5. All this will do nothing to help the regions, who will simply lag even further behind (as an example, I live 6km from the centre of Dunedin. I have no broadband offering of any kind available [other than expensive satellite], rudimentary telephone services, and NO coverage by either cellular telephone company - so how is this going to help me???).
MY prediction is that the future of broadband in New Zealand is WiMax, and high-speed data services via the mobile telephone networks. Who wants to be tied to a cable anyway??
Posted by: Mark Waller | March 23, 2006 10:42 AM
Copper's old, but it's there. And instead of leaning on Telecom, let's just nationalise it. They do it in South and Central America all the time. We might get a slight and tempoary dip in our international credit rating, but we're such a small, insignificant country all will be forgiven in a couple of months. Free calls for all! And whatever income we loose from not being able to tax Telecom we can make up by legalising marijuana and exporting "Tepuke Thunder" to whoever wants it.
Posted by: Bill Boolean | March 21, 2006 11:24 PM
unbundling the loop may not be the anwser but naked dsl is why should we pay for a service if we dont want or need it i want the net but i dont want a home phone
Posted by: Aaron Moody | March 18, 2006 1:30 PM
I disagree with you!
Unbundling is the only way forward!
The reason the net is so awful in New Zealand is because telecom hasn’t invested much money into our local loop!
and before you quote "telecom figures" of investment!
yes they have spent some money but not enough to keep our countries copperwire in good nick!
if we unbundle the local loop it will give other companies an easier option to invest in our infrastructure!
Just a quick note! This does sound an awful lot like the propaganda telecom gives us!!!!????!!!!! So how much are they paying you?
Either way!
UNBUNDLE THE LOCAL LOOP!!!!!!!!!!!!!!!!!!!!!!!!
Posted by: John Williams | March 13, 2006 10:38 PM
Hello,
I don't think you realy know what your talking about...
You need to look at the whole picture... LLU is just part of the soultion..
1: Naked DSL
2: LLU
3: A Total split of Telecom, wholesale and retail.
Then we will see broadband boom in NZ.
You say that our copper cables cant handle DSL is everyone gets on board.. and that is not the future?
Well you see to forget that in the future.. you will still use your copper line.. it will just be a very short distance to the box at the end of the street. all the backbone will be fiber
Cheers
Posted by: Sam Heath | March 13, 2006 9:34 PM