FryUp: the grand finale edition

The TSO makes its yearly appearance in headlines while NZ Communications is dogged by homonyms

— Oh no, it’s the TSO — Homonymic horror

Oh no, it’s the TSO

Over the years, I’ve become increasingly dubious as to the value of regulating industries with fast-moving technology. That is, you have to get it more or less right from the beginning and not become bogged down in technical minutiae of the day as otherwise, the regulation will do more harm than good. A good example of this is our telecommunications regulation. As we know, it’s swung wildly from no regulation initially to the incumbent very late in the game being severely screwed down and effectively split into three parts. There’s no doubt that Telecom’s monopoly had to be dismantled because under the leadership of Gattung, Deane, Parkes and Co there was no will look beyond profit and take social development goals into consideration. Even so, the regulation of Telecom has been a failure in some respects. It’s tied to technology that was relevant six to eight years ago, with little regard to what’s possible now. The Telecommunications Service Obligation or TSO is an example of this. Introduced in 1990 as part of the privatisation of Telecom and modernised to some extent to include low-speed dial-up (9.6kbit/s and 14.4kbit/s) a decade later, the TSO is a social contract that obliges the incumbent to provide universal access to telecommunications services. This is good, because you cannot have a modern society without access to, for instance, emergency services; the TSO also provides telecommunications services to hearing-impaired people. The problem with providing a universal phone service is that some customers will cost more to supply than others. This is where an attempt at regulatory fairness comes into play: the government wants to introduce competition in telecommunications but fears that cherry picking of customers in densely-populated areas would be the result. Telecom could be left with customers that are more expensive to supply services to, in remote and rural areas while its competitors clean up in cities because they have lower costs and can cut prices. Because of this reasoning, the Commerce Commission has been asked to work out how many customers can be deemed as commercially non-viable and how much they cost Telecom. Other providers then have to chip in with money according to their market share — and the bigger that is, the more they pay. The TSO for the 2007/08 year is tentatively set at $70.7m, up from $50.2 (2004/05), $58.2m (2005/06) and $62.8m (2006/07). All in all, hundreds of millions of dollars have gone into the TSO since the new millennium with Telecom’s competitors like Vodafone fuming over what it terms a tax on competition. In defence, Telecom says it’s fair and important that “all New Zealanders have access to a minimum standard of communication technologies” as its spokesman Mark Watts puts it. The TSO is a safety net in his view, and you can’t argue against that. Watts says Vodafone’s “posturing” seems “a little self-serving” and says it wouldn’t be right for remote communities to lose service in case Vodafone PLC in the UK decides to pull out of a market that’s expensive to serve. His boss, Paul Reynolds, is meanwhile arguing that the TSO allocation is too small as the models used to calculate it by the Commerce Commission don’t take into account the increased cost of capital these days. He may well be right, and Telecom and Vodafone both have valid points. If “unviable” customers are to contestable, so that other providers can supply telecommunications services to them, the Commission would have to be satisfied that there would indeed be a continuity of service that wouldn’t be affected by commercial decisions. It’s also easy to demand that the TSO is technology neutral and that the customers in question don’t have to be supplied by copper landlines as they do now. Even Telecom is openly talking about ditching the copper PSTN within the next five years or so; why can’t TSO customers be supplied by mobile phones for instance? Again, there would have to be some insurance against customers being left stranded. Perhaps TSO customers should be “auctioned off” with providers putting up money to supply them with telecommunications service for say ten years; that however doesn’t solve the problem of a given provider going out of business within that time frame. As it is, the TSO is quite badly flawed, however, and needs reworking. Apart from the lack of transparency — how much of the money has Telecom actually spent on rural and remote customers? — it leads to situations such as NZ Communications that doesn’t yet have Kiwi customers on its network having to contribute to it. Why? Because they had inbound roaming enabled and thus, got hit for $700 in TSO levies. We don’t even know for sure how many “CNV” customers there are in New Zealand. The MED has put together a table of “mildly, moderately and very unprofitable CNV customers” that indicate Christchurch alone has over 10,000 of those, and represent 12% of the TSO. Meanwhile, Hawkes bay has 5,617 CNVs with 12.9% of the TSO. Is Christchurch with two telco networks really a hard to supply area? What makes Hawkes Bay customers so expensive to supply? Are the figures correct and based on actual surveys? The answers to those questions are probably hidden deep within the MED’s archive of consultation and consulting documents but suffice to say, I don’t recall anyone coming out to defend the TSO as robust and fair. Oh, and only 12,000 unbundled lines since November last year? That’s called glacially slow progress…

Ministry of Economic Development: CNV customer statistics for TSO Local Service by Region Unbundling progess: 12k lines offer competing services

Homonymic horror

Poor NZ Communications. How many years has the company formerly known as Econet been at it, trying to get a mobile network off the ground? NZ Comms does have a network now, but it’s discovering just how hard it is to build such a thing in New Zealand, butting its head against the Resource Mangement Act and New Age protestors who believe in things like electricity allergies caused by “radiation” from mobile phone towers. Getting slammed with TSO levies can’t be fun either for NZ Comms but it gets worse: there’s Tetraphobia on the horizon for the fledgling telco, because it applied for and was allocated the 024 number range. The number four is bad enough by itself, as it sounds like “die” in Cantonese and Mandarin apparently. Worse, 024 sounds like “you are easy to die” in Cantonese. Tetraphobia explains why there are so few Chinese people in Wellington, because they don’t want to have an 04 number on their landlines. Faced with such an obstacle for its entry into the local Chinese telecoms market, NZ Comms now wants to hand back the 024x ranges it has been allocated and be given 022 ones instead. Wonder if Tex and Bill have checked 022 for harmonious homonyms as well?

This is the end

Dear oh dear. What a crap year. No, seriously, it has and I’m kind of glad 2008 will be done and dusted soon. I look forward to 2009 with some trepidation however, but will drink and be merry while possible. Hope you have a good one. If you don’t hear from me again next year, it’s because I’ve been fired. Or, the person sending these out has been made redundant. Or, the publisher and ISP both went belly-up. Or, all of the above. Cheers.

XKCD Faust 2.0

Cartoon: XKCD

Robert X Cringely Sex, censorship, and the Net

There's a war going on between wannabe Web cops and those who like their Net unregulated. Is internet censorship inevitable? Cringely exposes his thoughts. I don't know what it is — the holidays, the waning days of the Bush Administration, or just something in the air — but the war over sex on the Net has reached a new and disturbing level. To recap: Last week, Ning gave the heave-ho its XXX-rated social networks, giving them 'til New Years Eve to pack up their toys and find a new home. YouTube tightened its chastity belt, pushing naughty if not exactly XXX-rated videos to the bottom of its slush pile. A conservative Christian investment group issued a list of the most immoral video games, though the group's ratings seem to hinge as much on the games' endorsement of "alternate lifestyles" (i.e., pro-gay) as the degree of murder and mayhem inside them. The Australian Supreme Court just declared Bart and Lisa Simpson "real" people in the eyes of the law, upholding the conviction of a man who had lewd images of the underage cartoon characters doing the nasty on his hard drive. (Thus giving a whole new meaning to the phrase "the land down under.") And for the first time in its existence, Wikipedia was briefly blocked for refusing to remove allegedly pedophilic images from its encyclopedia. The last case is the thorniest, largely because the image in question — which appears on the cover of The Scorpions' 1976 opus, "Virgin Killer" — really is something that could get you arrested if found, say, on your laptop as you passed through US Customs. A UK group called the Internet Watch Foundation received a complaint about the "Virgin Killer" wiki entry and added that page to its anti-child-porn blacklist, used by the vast majority of British ISPs. That caused large swaths of Wikipedia to be inaccessible across the pond; the IWF's blacklist also blocked access to parts of Flickr and, yes, Ning (though apparently not the dirty bits). Wikimedia Foundation, parent organisation for Wikipedia, refused to remove the controversial image because no legal authority had ordered them to, the image had been in the public eye for more than 40 years, and was available elsewhere on sites like Amazon. The IWF eventually backed down. The group's well-meaning but poorly thought-out blacklist probably ended up driving far more traffic to that photo than if it had simply done nothing. So score one for the fans of unfettered free speech. But that image, well... it is troubling, even if "the girl, when we met her 15 years later, had no problem with the cover" (according to an article cited in the wiki). I'm uncomfortable endorsing any form of censorship. At the same time, I think Wikipedia could have easily blacked out parts of the image without damaging the article's impact, or even hid it behind a warning screen that required a second click. News organisations do this sort of thing all the time. It's an editorial decision, which Wikipedia geeks make thousands of times each day. To me the most shocking part was not the image itself, but who insisted on it in the first place: executives at the Scorpions' record label, RCA. Per guitarist Rudolph Schenker: We didn't actually have the idea. It was the record company. The record company guys were like, "Even if we have to go to jail, there's no question that we'll release that." The group ultimately had to pull the original album cover and reissue a tamer one. But imagine the unbelievable firestorm that would erupt if somebody tried to do that today.

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