FryUp: Kiwi Shared, Probed, Xtra!

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- Kiwi Shared

- Probed

- Xtra! Xtra!

- Kiwi Shared

There seems to be a lot of misunderstanding about the Kiwi Share Obligation (KSO) so I thought we could chat about that for a bit.

It doesn't exist.

That was easy, wasn't it? How about we talk instead about what replaced the KSO, and why.

When Labour came to power it conducted an inquiry into the telecommunications market, which led to the current regime. The inquiry took a look at the KSO, asking "Whether the Kiwi Share Obligation is the best means of meeting the government’s objective for residential telephone consumers and facilitating the ongoing delivery of telecommunications services, and if not what alternative arrangements should be put in place".

The KSO has irked Telecom for some time, causing it to periodically protest at being forced to offer free local calls, not charge rural users more than urban and not increase line rentals beyond the rate of inflation. It's irked the government as well: I think it realised it shouldn't have flogged off the local loop for three magic beans. The KSO was all that stood between Telecom and total market dominance and that's a tad alarming.

So what came out of the inquiry? Well, the KSO would remain pretty much as it was, but Telecom would be able to charge less where there was competition. The issue of competing with new networks on a street-by-street basis was raised, and the inquiry seemed to say that was a bad thing.

A four-yearly review of the KSO would be called for and would involve a public hearing. That would look at just what "ordinary" calls means at the time of review and would hopefully provide a mechanism for upgrading the KSO as time went by. The government's response, however, didn't refer to this four-yearly review and the idea looks to have been quietly dropped.

Instead the government proposed an "upgrade" to the KSO - the Telecommunications Share Obligation (TSO). This calls for Telecom to maintain the three rules of the KSO but adds some provisos for data calls.

Unfortunately, the new provisions take effect at such a low level as to be pointless. For example, Telecom only has to offer free local calls for internet connectivity of no more than 14.4kbit/s. If you want more, under the terms of the TSO, Telecom can charge you for it. That hasn't happened, but that doesn't mean it won't. And in order to provide this astounding level of service, the rest of the industry would be required to chip in. Contributions would be apportioned based on market share and would be used to help keep commercially non-viable customers attached to the network.

This brings us up to the present day. The other telcos are quite opposed to having to pay a share, especially after Telecom did its sums and came up with a cost of over $400 million a year to maintain the non-viables. The telco commissioner has pared this back a tad (to around $40 million), but even so, that's quite a cost. Especially when Telecom is posting a $700 million profit for the year. Especially when it is willing to fight tooth and nail with newcomer Wired Country, laying its copper network right next to Wired Country's fibre in new subdivisions in Pukekohe, a marginally "non-viable" area. Especially when Telecom is unwilling to allow its non-viables to be put up for tender.

Telecom doesn't have to allow others to tender for the non-viable customers. There is no mechanism in place for that - it would require the government to say yes or no and the government is hanging back on saying anything at all about it. If anything, the other telcos are less than thrilled with the government's handling of the TSO. They weren't involved in its drafting, they didn't get a say in its contents before being handed this fait accompli. Initially they would be paying for an industry forum as well as for the TSO upkeep but there seems to be no sign of the forum getting off the ground.

You see there's value in keeping a network node in place even if it doesn't make you much money. This is the value of networks - they connect people together. Every person added to a network increases the network's value overall. Even if that person isn't commercially viable, they still add overall value, and that's what seems to be missing from the commissioner's rulings on the cost of maintaining the TSO. Telecom clearly values these customers, the competitors clearly value them, so why is anyone being charged a percentage to keep them attached to the network?

Vodafone asked the NZ Institute of Economic Research to write it a report on the TSO obligations. The NZIER has concluded that the TSO isn't all that good a mechanism and that paying for local calls but freeing up the competition would be a better way of driving uptake of broadband and the development of new networks.

We seem to be approaching a turning point where the government must decide which is more important: "free" local calls or internet access. Free calls aren't free, of course - they're paid for by the monthly line rental. The report suggests that doing away with free local calls could see monthly bills decrease for around 80% of New Zealanders. Overseas, it should be noted, telcos will often provide free local calls as part of a bundle of services.

Somehow New Zealanders have developed the belief that in other countries local calls are costing end users vastly more than they do here. This is simply not true. The crunch point is approaching and it will be interesting to see what comes of it all.

Telecom likes the Kiwi share after all - Computerworld Online

Report highlights Kiwi Share rift - NZ Herald

Telecommunications Inquiry homepage

Broadband at the price of dial-up - BBC

Although this report refers to broadband it's really only 150 Kbit/s so doesn't count. However, I'd happily pay for a 150 Kbit/s service for that price. It's interesting to note that broadband is roughly double the price of dial-up in the UK - here it's vastly more.

- Probed

The other arm of the government's broadband plan is Project Probe. This is the initiative that has "tens of millions of dollars" to spend, but the government won't say just how much. Probe was originally set up and run by the minister of communications but has since been taken over by the minister of education's office.

Things are coming off the rails down at Probe HQ and they're being very cagey about it all.

If you look at the Probe website (link below) you'll see a time line that has most schools and communities being able to get 512kbit/s by November this year. That's about two weeks away. Only the really hard to reach schools and communities will have to wait for up to a year to get connected.

Unfortunately, that's slipped a bit. Only six tenders out of 15 have been awarded and depending on who you talk to, either the rest are charging along and will be announced momentarily or are being fought over and will be weeks away. Either way we're supposed to believe the service will meet its deadline.

I don't think so.

Of the six tenders that have been awarded, the first three went to the Walker Wireless (now Woosh) and Vodafone consortium. These three were awarded outside the Probe tendering process and the Probe project management team (consultancy firm Amos Aked Swift) had nothing to do with the decision.

The next three were awarded by AAS and they went to a Telecom and BCL team. We were supposed to have the rest of the announcements by now, but behind-the-scenes machinations have kept them from being awarded.

According to a NZ Herald story, in one area at least the competitors are being offered a chance to lower their bids to compete with a "dramatically" lower offering from Telecom/BCL.

Probe has two goals: to increase the reach of broadband penetration in New Zealand and to increase competition in the broadband market. The first part appears to have been delayed and the second part looks to be in danger if Telecom is willing to slash its bids to the bone to beat out the competition.

The next few months will prove to be very interesting indeed.

Project Probe Overview

Bidders get chance to drop their price - NZ Herald

Probe tendering delay "won't hold up rollout" - Computerworld Online

- Xtra! Xtra!

I'd add in "read all about it" but if you're an Xtra customer you probably won't be able to.The country's largest ISP has been having trouble with its email system and mail is delayed by days in some cases and lost altogether in others.

Not that Xtra will admit it's losing email, but I've heard directly from more than one customer who has had this problem, can prove it and has received little or no support from Xtra.

We all accept outages as part of any software service. We understand there will be problems both unforseen and difficult to fix. We're willing to work with our suppliers because we're all so reliant on their services.

However, Xtra seems more than happy to stonewall on the problem and on the solution. It won't tell me what the issue is, although it seems to be something to do with the company's new anti-spam/anti-virus filtering service which it hasn't yet launched. It can't say when the problem will be fixed with any certainty - it's missed a couple of deadlines now - and it refuses to consider any form of compensation for its customers.

This is the same company that advertises its network up-time as being 99.999% - I presume that isn't a guarantee either but is "marketing" or perhaps it's just "nuances and words". Back home we have another term for such things - it's a fib.

By the way, Xtra's terms and conditions do say users can get compensation but you have to prove you've lost money somehow. Give it a go anyway and see what you can get. Having email go astray for hours is bad enough - days or even weeks isn't acceptable and losing it altogether should be grounds for a full refund and free service I would think.

Xtra mail outage frustrates and annoys - Computerworld Online

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