The weather report: Digital Strategy hits the 'DSL Wall'

Eighty percent of New Zealand's population currently getting on average 1.5Mbit/s

The latest kerfuffle over Alan Freeth’s comments on fibre to the home (FttH) highlight some interesting issues.

The government’s recently announced targets of at least 20Mbit/s broadband to 80% of the New Zealand population, and at least 10Mbit/s to 90% of the population by 2012 are ambitious. But achieving those targets does not require FttH. This, when viewed through the prism of the NZ Institute’s landmark report a year ago, suggests we are on an important threshold.

The opportunities that exist for New Zealand in growing its revenues in the “weightless economy” lie, according to the Institute, on the other side of what it terms the “DSL Wall”. This is DSL’s limitation in speed and performance.

In order to fully exploit the weightless economy, its report suggests, we need broadband performance well beyond what DSL — even ADSL2+ — can offer. The government’s recently announced Digital Strategy 2.0 isn’t going to deliver that by 2012, but is aiming for it by 2018.

Epitiro has just completed a deployment of 9500-odd desktop agents around the country on consumer’s PCs. The speed test used is a TCP test, run every day or so, which is the best speed-test currently available and tells us the line’s actual capacity. We measure to an endpoint server in New Zealand, which means we are not measuring contention in the offshore internet; just what capacity is available in New Zealand, so it’s reasonably robust.

The data suggests 80% of the New Zealand population are currently getting on average 1.5Mbit/s, and that 90% are getting 1.4Mbit/s. Assuming that the government a) plans to measure its progress, b) does it using this type of test, and c) wants to meet its target by the last quarter of 2012, the 80% target will require an increase of on average around 1Mbit/s per quarter, the 90% target around 0.5Mbit/s per quarter.

The 20Mbit/s target is the toughest. To get 80% of the population consistently on that sort of speed over DSL technology (assuming also FttN) is a big ask. However, the amount of current investment being undertaken by ISPs suggests it’s potentially within reach.

The Digital Strategy is a little vague on this point. While it talks about the some laudable initiatives to aggregate demand in the state sector, it’s a little more circumspect on how to handle the supply side of the equation. It states:

“Investors in infrastructure and internet service providers (should) explore new services and business models that allow them to provide low-cost, fast connection with no caps on data.”

Um, right. I can just see the ISPs nodding their heads gratefully at that.

I’m wondering whether there isn’t another possibility here. So let’s stick to the Digital Strategy’s targets for New Zealand consumers. But let’s also try and achieve the New Zealand Institute’s targets, but for geographic areas of pre-identified special economic potential.

Let’s identify those areas, and provide them with fast-tracked fast access to the Weightless Economy, via fibre to the premise. As parts of Wellington have benefited from the presence of Weta Digital and its super-fast broadband requirements, could we not replicate this model on a more rigorous national basis, on the back of a scientific assessment study and government backing to reduce the risk to service providers?

Big plans are afoot in Singapore and other countries to transform parts of their infrastructure into global digital hubs, with the help of their governments. That’s a vision that strikes me as having some commercial legs, while also delivering on the demand for universally faster broadband. Otherwise, at 1.5Mbit/s, that DSL wall is looking pretty high.


(Digital Strategy 2.0)

Current Average Speed

(Epitiro Data)

Required Run Rate (Approx)
10Mbit/s (90%)1.4Mbit/s0.5Mbit/s per quarter
20Mbit/s (80%)1.5Mbit/s1.0Mbit/s per quarter
Source: Epitiro

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