Telecom's DSL pricing model is restricting market growth and forcing ISPs to limit the service they offer, says Maxnet managing director Anthony Urbhan.
"I had a customer last month who was charged $9000 for his JetStream usage. We saw $20 of that."
Urbhan says he has been forced to introduce restrictions on peer-to-peer traffic over JetStream connections because of Telecom's pricing structure, even though what he'd like to do is introduce a P2P package for the high-end users.
"I'd love to be able to do something like that with this service. If there was a different model and we were able to do it, we'd configure it for two entirely different services and both would be the best we could offer in that space we're in."
Telecom runs two billing models for its DSL products - JetStream Starter requires the ISPs to buy and manage the bandwidth used by the end users while full-speed JetStream bandwidth is managed by Telecom. Because Starter is a flat-rate offering, even though ISPs must buy bandwidth from Telecom for the end users, most ISPs in New Zealand now have a bandwidth cap of some kind on the service. ISPs have complained they are having to literally pay to keep customers on their books because of the price structure.
The full-speed JetStream model is not a flat-rate offering, but instead has a usage limit set on a monthly basis. Telecom charges end users for any excess use. The ISPs that sell the service don't receive any of that excess use income.
Urbhan says this is limiting the growth in the market and also limiting the types of services he can offer.
"Because we can't manage traffic on JetStream we can't offer higher levels of service to our customer."
However, Auckland-based Orcon Internet's managing director Seeby Woodhouse says he has no problem with Telecom's billing model.
"I don't have any issue. If other ISPs can't make money that's their problem."
Woodhouse points to TelstraClear which has its own DSL product.
"TelstraClear has Tempest and I don't think it's available for other ISPs to resell at all. Telecom didn't have to let other ISPs sell the product as it's delivered on the Telecom network. At least we have the option."
Telecom has recently announced several changes to its JetStream plans, including increased usage limits and lower prices, however none of these changes will improve the situation for the ISPs that resell the service.
Maxnet won't be introducing a usage cap says Urbhan, but will be limiting bandwidth for P2P services and also for FTP, although to a lesser extent.
"We're structuring our service for new customers that have yet to join Maxnet. They're the typical user – email, web surfing, some downloads – rather than the hardcore thrashers that run their connection at its maximum 24-hours a day."
Telecom did not get back to IDGNet before deadline.