- Broadband competition
- Broadband competition
BCL has been on something of a public affairs rollercoaster since it first revealed its intentions to become a telco so very long ago.
First there were cheers - here was a national network to rival Telecom's and it was ours, lock stock and barrel. The government still owned BCL and was more than happy to see the transmitter of television and radio become a data-casting backbone as well.
Then there were the boos - nothing happened for ages and ages. This, I've discovered, is the way with telcos. The technology and business plans and political machinations take a dog's age.
Then there were gasps - BCL had bid for Fonterra's business and was edging into the "chosen son" spot ahead of Telecom. If it managed to score Fonterra's business that would be a huge indicator to the market. Whatever that means.
Then there were cries of horror - BCL had signed up with Telecom to provide Fonterra's rural broadband service. Oh the humanity!
Then there were more cries of horror - BCL had taken legal action against Walker Wireless after losing out on the three Project Probe bids, an entirely unrelated sequence of events, or so we were told.
Now we're cheering again. BCL has signed a wholesale deal with Ihug and ICONZ to provide broadband wireless connectivity to business and residential customers. Customers in Taranaki and Southland, those fabled homes of broadband pilot projects, will be able to make use of BCL's network via ICONZ and Ihug's retail services come November.
This is good for two reasons (and this week I will actually list two reasons when I say there are two. Fortunately none of you noticed): firstly, the more the merrier when it comes to offering broadband. Competition is good in this instance.
Secondly, and far more importantly, in my book, this is important because BCL is offering a true wholesale product.
What's that all about? Telecom is the current number one in broadband offerings because it's the only one - practically all the ISPs sell Telecom's JetStream product in one form or another.
However, they're all simply reselling the exact same product. Telecom is only obliged to wholesale a retail service, so it's put together a JetStream package that includes international bandwidth to sell to the ISPs, which can do very little to customise it. JetStream 500 from Ihug is identical to JetStream 500 from ICONZ, from Xtra, from Wave Internet or the Packing Shed. They're all selling you the same product. There is no competition to drive down prices because there's only one thing for sale. Also the ISPs that have their own international bandwidth--all the major players--aren't in a position to make any cost savings of their own to pass on to customers because they have to buy the entire JetStream package off Telecom. They can't just opt for the DSL bit. Under our current wholesale regime, this is perfectly legitimate and one of the reasons for pushing for unbundling of the local loop.
BCL, however, has a true wholesale model. It is selling network access to ICONZ and Ihug and they can do what they like with the connections. This is good for the ISPs as they can customise their offerings. If they see a market for flat rate access at a set speed, then so be it. If they see a market for a capped service with unlimited speed, then knock yourself out. If they see a market for voice service, video on demand or regional online radio then woohoo--it's all yours.
Clearly this is good news for customers, although the way both Ihug and ICONZ are talking, this is going to be a premium product. So expect it to cost more than JetStream in those few places that it will be available.
BCL is expanding its data network's reach, so it'll be coming to a town near you soon. Meanwhile, here in central Auckland, we've still got only JetStream or Ihug's Ultra connection. One day, one day.