Uncapping II: IP everywhere

Apart from users having quite enough for their needs, the other reason Telecom doesn't want to extend the bandwidth caps for broadband users is its olde world approach to telecommunications.

Apart from users having quite enough for their needs, the other reason Telecom doesn't want to extend the bandwidth caps for broadband users is its olde world approach to telecommunications.

Telecom is still very much a voice-centric company. Calling revenue declined by 10% this year, but it's still over the billion-dollar mark. Not bad in these data-centric times.

Now imagine what would happen if Telecom upped the traffic cap on JetStream to 10GB a month. What would you do with all that? Well, after you'd downloaded all you could find, traded all the music and video you were bothered with, watched all the movie trailers, TV shows and cartoons you could lay your mouse on, you might start to investigate other avenues of use for your traffic. Like voice over IP.

VoIP, using the internet for voice calls, is one of those areas we've been talking about for yonks. Like video phones, it's always tantalisingly just out of reach.

Well it isn't any more. VoIP is here, it works, it's real and it's cheap. Dirt cheap. Peanuts. Forget $5 weekends, how about free? Okay, so that's not likely to be a service anyone's going to offer you soon on a national scale, but how about $15 a month for all voice calls? I'd sign up.

Imagine what that would do to Telecom's market. Forget about protecting the declining sales of ISDN or frame relay or any of the other old hat broadband technologies. The lack of a decent traffic cap is solely designed to slow down the uptake of VoIP. If everyone was doing it, Telecom would be decimated.

Or would it? Part of Telecom's charter is the telecommunications share obligation. The TSO replaces the old Kiwi Share, which was a list of three simple rules. Thou shalt offer free local calls. Thou shalt not increase line rental by more than the rate of inflation. Thou shalt not charge rural users more than urban.

That's all history, of course. The new TSO Deed runs to 31 pages and makes a clear distinction between free local calls for voice and for data.

The TSO introduces the idea of a "standard internet call", which apparently is "for the exclusive purpose of connecting Telecom residential customers to an ISP to access the internet to use internet services of the type which are generally available to Telecom residential customers immediately before the commencement date", which was December 2001.

What does that mean in practice? Well, if you couldn't do it online in 2001 you can't expect Telecom to do it now. There's even a handy check list of things that weren't common practice in 2001 (clause 9 of the schedule) that includes, among others, VoIP.

So if you start using VoIP over Telecom's service, you're in line for per-minute call charges. Subtle, eh?

If we're going to go that far, and I'm sure that day isn't far away, I think we have to go the whole hog. If we're going to be charged for VoIP calls then the entire network cost structure should be rejigged for all IP traffic. What does this mean? Currently Telecom and the other telcos are arguing over commercially non-viable customers (CNVCs), most of whom are rural, and which telco has to pay for them. Telecom claimed it would cost around $450 million a year to keep them on. That's come down a tad -- the Telecomms Commissioner says it's more like $22 million shared between the biggest non-Telecom telcos. Under an all-IP network the costing would be rejigged because it is far, far cheaper to maintain an IP call than a circuit-switched call, regardless of the caller's location. I can't see we'd have any CNVCs at all. When a profit could be made from offering voice calls as a cheap add-on to data, there is no such thing as a non-viable customer.

In the mean time it's a billion-dollar industry built on shifting sand. The question really is: how long can Telecom fight its rearguard action?

Brislen is IDGNet’s reporter. Send letters for publication in Computerworld to Computerworld Letters.

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