FryUp: Wholesale monopoly alert

A 20% hike in the cost of LLU raises an unpleasant prospect, YouTube delivers a legacy for a murderous narcissist, and Xero needs some deals

Top Stories

- Wholesale monopoly alert

- YouTube killer?

- Xero revenue

Wholesale monopoly alert

Over the years, the pattern emerged in New Zealand’s regulatory efforts for the telecommunications industry: prop up Telecom and eviscerate the competition.

This is done through glacially slow regulation that allows the incumbent to behave more or less as it likes, but also through the Commerce Commission setting high access prices for Telecom’s services and products in its determinations.

Therefore, it shouldn’t come as a surprise to anyone that the local loop unbundling prices for access to the last mile copper loop jumped 20% between the draft and final determinations for urban areas, and fourteen per cent for the provinces. The question now is if the Commerce Commission is in fact helping to build a wholesale monopoly for Telecom, with token access for competitors, to replace the retail one?

Orcon is already crying foul, saying it may not be able to continue with LLU because the margins will be too slim. This contrasts sharply with statements from Ross Patterson, our Telecommunications Commissioner, who claims LLU will in fact benefit customers and provide greater choice, despite the jacked-up pricing.

Worth noting too are the high cost of transferring customers to LLU ($74.83 plus GST) and the slow slow slow rollout – a fifteen month implementation plan, with 75 exchanges being unbundled by April 2009.

I would imagine some regional providers in the midst of building networks separate from Telecom’s are happy about the eye-watering $36.63 plus GST a month price for LLU, as this keeps the cut-price providers like Orcon out of their areas and protects their investment.

As for the urban providers, well… we’ve said it before, and say it again: try leeching a margin off Telecom instead of building your own network, and watch what happens.

Wasn't the new legislation introduced by Cunliffe meant to put an end to the bad regulatory policies of the past though?

YouTube killer?

The shocking news about Pekka Auvinen’s murderous rampage that left nine dead at a Finnish high school have stoked up the debate on whether or not so-called user-generated content can in fact trigger such evil things.

That Auvinen posted videos on YouTube containing vile, insane rants doesn’t mean the Internet caused the killings. It does mean however that we live our lives with the Internet as a natural extension of them and yes, for murderous narcissists like Auvinen, putting up content can serve as a reward. Auvinen in all likelihood knew that the horror he created would live on after he killed himself, on the Internet, making him (in)famous. It could be that this was one factor that pushed Auvinen towards murdering his fellow students and the school principal.

There’s the problem then: you can use the Internet either way, for good or bad. It is becoming increasingly difficult to defend the good bits however, with the likes of Auvinen roaming free on the Internet.

- YouTube killer named, warned of school bloodbath

Xero revenue

It is perhaps unkind to scrutinise a hard-working start-up too closely, but… is Xero, the famed Software as a Service outfit, living up to the massive amount of hype it’s generated?

Living up as in bringing home the bacon for investors, that is. It would seem Xero has netted 204 paying customers in its first half year, bringing in a total of $24,000. That’s $117.65 each, hardly an impressive figure considering Xero’s web-based accounting software costs $50 plus GST a month.

Xero projected some 1,300 customers by May next year, but it remains to be seen if it can pack on another 1,100 paying ones by that time. Perhaps it will, if it manages to launch overseas, into larger markets, so as to build up customer volumes, and sign up with more banks. The actual idea of web-based accounting seems pretty cool, but businesses are notoriously conservative when it comes to money matters, so Xero has a lot of convincing left to do.

Founder Rod Drury isn’t however perturbed by the figures, which includes a $1.73 million loss for the first six months and a drooping share price in the 82-83 cent region, down from $1.15 each at the stockmarket debut.

Drury says the loss is due to staff expansion, and terms it an investment in building up Xero. There is still over $12 million in the kitty for Xero to carry on with, but it’s fair to say the company needs some deals soon, to restore investor confidence in it.

- Xero reports 204 paying customers

- Xero loss 'investment' in online accounting



The e-Jihadists are coming, the e-Jihadists are coming!

Stop me if you've heard this one: The Internet arm of Al Queda is targeting 15 anti-Islamist sites on November 11, urging its followers to download the new point-and-click Electronic Jihad 2.0 software and start their attacks. (Actually, you might have heard about it in my blog last week.) Despite the software's silly name, I was curious whether this might be something worth worrying about. So I did a little more digging. The software is real - in fact, I downloaded a copy of it yesterday off an archived copy of But if this is a serious terror threat, I'm Arnold Schwarzennegger. Blogger BlackFlag, a computer security pro who writes about cyber terror tactics and wishes to remain anonymous, notes that the software is "the equivalent of a re-written 'nuker' DoS program circa 1995." He blogs: "It’s just a basic packet generator that sends ping requests, garbage packets and GET requests to the target. ...In my opinion these "e-Jihad hack-tools" aren’t all they are cracked up to be ... it has been my experience that the average script kiddie possesses more capable tools than this. Having these tools downloaded and installed probably helps the haji’s morale more than anything else." This description of the software, from the Jamestown Foundation's "Terrorism Focus," makes it sound more like Space Invaders. Among other things, it lets e-Jihadders tally up the hours they've spent attacking and post their high scores online. The account registers the number of hours the user spends attacking targets and every two weeks to a month the names of those who scored the highest are posted. Currently, the highest score is claimed by a user nicknamed "George Bush" who spent 4,211.50 hours, or 70 full days, hacking anti-Islamic websites. Yet if you were to believe the sites that have been promulgating the "cyber jihad threat" - like Jamestown, DEBKAfile, and the Northeast Intelligence Network - you might be hiding under your desk right about now. Paul Henry, VP of technology evangelism at Secure Computing, says the threat is nothing to lose sleep over, though it's always a good idea to review your defenses against DDoS attacks. He adds it will be interesting to see just how many e-Jihadists will be pinging away on November 11, if for nothing else than as a measure of how many cyber enemies we've made during the last ten years. Sure, there are terrorists out there using the Net. But if these guys were interested in doing serious harm they'd be renting a botnet to run a real DDoS attack - and they wouldn't be publicising it first. This sounds more like a publicity campaign, or a recruiting tool for noobs, or an attempt to show just how gullible Westerners really are.

Or maybe it really is all just a game, Henry says. "I wonder how many points you need to qualify for 72 virgins in the afterlife," he jokes.

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