Telecom executive smoothing waters with ISPs

Telecom is moving to rescue its tattered reputation in the Auckland Internet services market, promising better communication with ISPs and more urgency in meeting the needs of Internet traffic.

Telecom is moving to rescue its tattered reputation in the Auckland Internet services market, promising better communication with ISPs and more urgency in meeting the needs of Internet traffic.

Much seems to be in the hands of Graham Rowe, who has been marketing manager of Telecom's computer communications unit since May but has suddenly taken up a role liaising with ISPs. Voyager was the first ISP to meet directly with Rowe, about two weeks ago, in negotiations over 0800 pricing and future access to Telecom's planned IPNet.

One of Telecom's major problems in the ISP sector--a barrage of complaints from Voyager--was settled then, when a confidentiality clause was included in an agreement which Voyager boss John O'Hara could only say "enables us to stay in the market". Others met Rowe last week and came away happier about relations with Telecom. But serious problems remain, including:

* A crisis in provision of digital capacity at the Auckland CBD Mayoral Drive exchange. Almost all new primary-rate ISDN until March has been booked up by Ihug and Xtra, which depend on PRI for dial-in capacity. Iconz general manager Hugh McKellar says he was told by Telecom that "only the Prime Minister and the emergency services" are getting ISDN at the moment and another ISP manager says a Telecom account manager told him Mayoral Drive's ISDN room was "a disaster zone". One ISDN engineer from the exchange has recently gone over to Telstra and others are reported to be suffering stress. KCCS and Ihug have both reported outages of ISDN circuits recently and O'Hara says a Telecom engineer warned him off anything to do with Mayoral Drive. Despite this, Telecom recently entered a promotion with an Auckland company which saw free BRI connections bundled with ISDN modem/TAs. Purchasers may wait as long as six months to get their ISDN lines.

* A general failure by Telecom to anticipate a surge in Internet traffic and the demand for digital capacity when planning last year, even though some customers claim to have warned that there would be an explosion in demand.

* Hunting problems associated with the NEC switches at Telecom exchanges. There have been two unsuccessful attempts to implement the "quick and cheap" series completion solution to provide ISPs with the ability to group multiple PRIs under one local dial-in number.

* Competition in the market for international IP bandwidth from Telstra -- although some customers now say that Telstra's services have not always performed as advertised.

* Meetings last week of disgruntled ISPs aiming to form a co-operative aiming at ditching Netway's services and buying IP bandwidth direct from MCI or Sprint, to come through a new Auckland-based Internet exchange.

* Plans by Telstra to lease unmanaged circuits, rather than fully-serviced DDS circuits, between itself and ISPs using "black box" technology for management at either end. Telecom is obliged by its interconnect agreement to lease out these circuits, but they attract considerably less revenue than DDS.

* What Rowe concedes have been poor lines of communication with ISPs, with the result that "rumours quite often precede the facts--and are often apocryphal."

* Xtra. Telecom's ISP does not appear to have access to enough new dial-in capacity to service its rapidly expanding customer base. Antipathy towards Xtra, virtually universal among ISPs, also seems to be hampering other Telecom business units.

Rowe declined to comment on Xtra, but says "things are really happening" with other Telecom customers. "I've been making an effort to get around as many of the ISPs as I can, making myself available to them.

"I don't know how much you'll see visibly in the next few months, but internally there'll be a lot of developments. There's a lot of work going into accelerating the different programmes we have to meet this growth. I'll be talking to the ISPs through that process, but when all that work becomes a little clearer, the essence will be being able to provide services that actually can sustain in the long term the type of growth that we're likely to see in the next 12 to 18 months."

Telecom, says Rowe, has now accepted that it will have to make a far larger committment to IP data services: "I think we're over the risk now now, the 'will that happen or won't it, will it be another hula hoop'--we're slightly beyond that phase. It will happen. Whatever it is, it's going to happen."

Telecom's under-provisioning came to a head in a meeting in September, when new digital capacity at Mayoral Drive was divided up between Ihug and Xtra.

Ihug manager Nick Wood has confirmed that "we were given an indication of what was left in ISDN, and because we put an order in before Xtra, we were given so many and they were given so many--I was told exactly how much it was, but I can't tell you.

"We got more than them and with what we're getting we can only add about 900 customers a month. They're adding 5000. Now, unless most of their customers are coming from outside Auckland, which would surprise me, they are adding more people than they can service--and hoping they can resolve the issue quickly with R2 or whatever else. Either that or Telecom's lying to us--they've got digital capacity and are just saying they can't give us any. But I'd take the first option, because I trust some people in Telecom to give me a straight answer."

The need to allocate a different local number to every PRI (which provides 30 dial-in lines) also means trouble in servicing customers. Even at Ihug, which gives its customers access to all its dial-in numbers, Nick Wood estimates that when its network appears to be completly tied up, it is probably at 75% capacity, simply because customers cannot find the available lines.

R2, the ISDN alternative, is still in what Rowe describes as "a technical evaluation phase". Although it has "both cost and availability" advantages, he is not committing to Telecom ISP customers getting involved in further trials, as Ihug wants to do: "If we can meet Ihug's capacity with primary rate ISDN, then that's what we'll do. They have forward forecasts and orders for services and I believe we can meet that, but I really can't comment too much about a specific ISP."

Tim Wood, Ihug's corporate manager, says the ISDN squeeze turned Ihug's $50,000 spend at the weekend's Auckland computer expo into "just a branding exercise, really".

"We added 200 customers in a month after last year's show, but we won't be able to sign up any more than our normal monthly growth rate because we won't be able to service them."

Although several other initiatives are in the air, including allowing Ihug to tap into a Telecom fibre loop running near its offices, the firmest one is IPNet, an extension of existing technology which provides dial-in services into the packet-switching and eftpos networks.

"All we're doing is taking that functionality and extending it to the next generation--which is IP-based traffic. There're all sorts of reasons why we're doing that. We're getting requirements outside of the ISPs, but they've added a sense of urgency to any development, because of the sheer growth, and the need for the ability to better handle the different kind of traffic that Internet services generate."

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