Cable control wins telecomm game

If communication is the key to business, then whoever controls the cables controls the game itself. Currently, with very few exceptions, that controller is Telecom.

I'm a gamer. That is, each lunchtime I don a new name and log on to play CounterStrike against other lunchtime nerds. These are people I don't know, or even know if I know, if you know what I mean, and I happily spend an hour shooting them and in return get shot.

This has taught me two things. Firstly, lag equals frag. Secondly, I need to get out more.

Lag is, of course, the ultimate winner in any online game. The slower the player can move, the easier the target they become. I have the benefit of IDG's extremely fast connection and can run about with impunity happily hunting down the IS manager downstairs or whomever I like. I'm an LPB, and if I tell you the LP stands for low-ping, you can probably work out the rest for yourself.

Why am I telling you this slightly shame-faced fact? Because the real lesson I've learned from online gaming is that communication is the key to success, whether it be freeing hostages, extracting yourself safely from a firefight or conducting business in the 21st century. That's why this column is going to focus on the telecommunications sector in the coming months, hence the new name.

If communication is the key to business, then whoever controls the cables controls the game itself. Currently, with very few exceptions, that controller is Telecom.

Telecom owns the very cables our data is transmitted on, for better or worse. You used to own them - by you I mean the citizens of New Zealand. For a variety of reasons, the government of the day (1990) decided to sell off the cables, along with the company that runs the network. The entire shebang was sold to a US-based consortium that eventually sold out to the current owners at a healthy profit.

Whether this is a good thing or not can be argued till the cows come home, and frequently is. What it means for the future of New Zealand communications is something the government inquiry into the entire industry will have to sort out, although it won’t be reporting to Minister Paul Swain until the end of this year and any actions taken will be something to write about probably in the following year.

Overseas the situations are somewhat different.

In the UK, the market is monitored and, to some extent, controlled by Oftel – the Office of Telecommunications. Decisions made by Oftel are acted on quickly, often within weeks or months. British Telecom, owner of Clear Communications, has recently been told to open up its high speed data market to competition – something it was reluctant to do of its own accord. The winner – clearly the consumer, who now has access to a service that was not available only six weeks ago.

In Australia, the regulatory body has demanded that Telstra stop charging such outrageous amounts for interconnection to its network. Soon alternate providers, including Telecom’s Australian presence, AAPT, will be able to offer much cheaper phone calls and Internet access. The winner – again, it’s easy to see it’s the consumer.

The US, by contrast, is a pig’s ear. Carriers are required to overbuild their networks to such an extent that new players are reluctant to enter the market. The reason for this overbuilding is, supposedly, to allow each carrier to provide bandwidth to its competitors – something that never happens.

So why demand this extra capacity in the first place? One analyst told me it is for purely commercial reasons – to keep down the number of players in the game. Fewer players makes for easier control from a regulatory point of view, and the government seems more interested in that than in providing better quality of service to the consumer.

The UK is also a far-from-perfect example of how to manage a telecommunications market. The recent spectrum auction has netted the government in excess of 22 billion sterling. That’s roughly equivalent to $1000 per person.

But the UK model is flawed – it’s based on today’s technology instead of tomorrow’s.

Instead of auctioning spectrum in 15 Mhz blocks, suitable for the next generation of data-capable phones known as 3G, the majority of the blocks are only 10 Mhz each – suitable only for today’s 2G phones. Only two blocks were sold in 15 Mhz chunks, one to a Canadian newcomer to the market, and the other to Vodafone, the existing cellular market leader.

Let’s just hope that our own inquiry won’t make the same mistake and base its findings on the existing market – it should look ahead, if only to the next five minutes of history.

Paul Brislen is a Computerworld journalist. Send email to Paul Brislen.

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