Thursday, May 04, 2006

Telecom Local Loop unbundling - who actually expects to benefit?

Much of the public relations mantra about why we need to do the LLU of Telecom revolves around the fact that we need this faster / cheaper broadband in businesses and schools to take advantage of the new business models available; and teaching opportunities available.
What I find interesting is how many people buy into that.
LLU only stands to improve dialup and DSL access / prices - what other broadband would run across Telecom owned copper?  Ignoring the former - I'm sure everyone agrees that this was never about lowering the price of dialup access further (although that may act as a further broadband disincentive for the home) - ask yourself how appropriate DSL is for businesses and schools?
DSL has been the best price performance choice for quite some time now - even in the business world - and yet relatively few businesses use it, why?  Because the underlying TECHNOLOGY is relatively inappropriate for business use - restrictions on IP address assignments / latency / jitter / high attenuation loss of signal / high packet loss / etc.
This is why initiatives like CityLink in Auckland and Wellington have thrived (and tell me how even an 8MB DSL line with its PPPOA overhead is going to compete with a direct Gigabit Ethernet connection?).  Why businesses still have ISDN lines, why frame-relay still exists.  More importantly why direct to business fiber connections are becoming increasingly common; because DSL just doesn't cut it in most cases.
Back to the schools - same thing applies.  In fact most schools I know have Telecom falling over itself to get direct fiber in there - why?  Because they can reap far better returns from that where there is a reasonable number of computers connected than over a shared DSL connection.  And they don't want schools dealing with the instability of a DSL solution.

So your home stands to benefit - right? WRONG (in most cases).  This will just lead to a further compartmentalization of pricing like we see now in phone lines where Wellington gets its phone rental cheaper because TelstraSaturn happens to compete in that one place.  Competition with LLU will still only occur on an Exchange by Exchange basis - and unless you happen to be linked to an exchange that can be cherry picked it is unlikely to affect you.  Which will probably mean HIGHER prices for those people linked to Exchanges that the other ISPs don't want to compete over.
Good luck seeing broadband in those rural exchanges now this century...
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Anonymous said...

Dude, seriously misinformed. You state that "Because the underlying TECHNOLOGY is relatively inappropriate for business use - restrictions on IP address assignments / latency / jitter / high attenuation loss of signal / high packet loss / etc."

Hate to tell you but those are almost ALL limitations imposted by Telecom. Packet loss, latency, IP address assignments are all qualities which each telco can customise - they're not an inherent feature of DSL.

I worked in Australia for a number of years where I worked with a DSL provider over there who provided whatever IP setup you wanted (in fact it was true L2, the ADSL provider had no knowledge or interest in your IP routing), low latency/QoS to suit- and for many people, ADSL and G.SHDSL were ideal. They also provided a tight SLA which meant that downtime was kept to an absolute minimum.

Sure, fibre is much faster and cheaper, but don't underestimate DSL. For lots of small and medium sized businesses who don't need gig connectivity it's just fine. Especially if you bundle a number of DSL lines together to form a multilink bundle - it's really quite cheap connectivity and works well.

Don't also forget that Telecom use ADSL for it's high grade expensive products right now, such as it's NGN and PON services. They use commodity hardware for this, nothing especially unique.

iiq374 said...

Anon - the IP address assignment issue will only go away if someone decides to change NZ's reliance on PPPOA as the transport layer - that is why we only have single IP addresses on DSL here. Possible - but not a fight I see anyone taking up soon.

In New Zealand the packet loss and jitter is primarily caused by the quality of the copper connections - not something that is solved by LLU.

Signal attenuation is an inherent part of DSL - it comes from running those frequencies higher than 4000Hz over a copper line. Hence why you see the maximum attainable speed keep dropping as you move further from the exchange.

Sorry I should have been clearer that it is an inherent part of the technology based on the CURRENT COPPER INFRASTRUCTURE as opposed to DSL itself for all those points.

burt said...

I do think that in the bureaucratic councils and Govt we have, getting consents for laying new cables is going to put most companies off. Mobile and satellite would seem to be a logical choice. The leak that forced the Govt to advance it's plans to deregulate the copper has caught them with their cards on the table while they are working on regulating the mobile market.

Oh and my DSL's not bad already.
(upstream 864, downstream 4448 kbit/s)

iiq374 said...

The Government should hardly steal Telecom's cables off them because they have made the route difficult for others to lay cables. That would be a heads up to make the process easier...

I also use DSL at home - but that is a choice and I don't begrudge the fact that I'm effectively paying Telecom for part of it. I also don't get the full usage out of it because the wiring in the house is too old and needs replacing.
I'm just wondering how long its going to be before a large segment of the public 'upgrade' to 4-6Mbs plans and then start complaining because their performance is still only ~2Mbs. And that they need to rewire their house to get it any better.

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