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Thread ID: 128678 2013-01-08 04:51:00 So Key has finally lost my vote DeSade (984) PC World Chat
Post ID Timestamp Content User
1321987 2013-01-09 01:38:00 “that the wholesale price reduction from $21.46 a month to $8.93 a month is just and fair and actually fixes a long time rort perpetrated by Telecom, and now Chorus, to extract monopoly rents from the hapless telecommunications consumer”.

Ok, assuming that the Commerce Commission had done a competent job with its investigation I can’t see what the argument can be.
Aaaaah if only it was that clear-cut!

You see the quoted phrase there is what Chris Barton has written, not what the Comcom have said. This is from their official statement:

In applying the new cost-based approach, the Commission is required by the Act to benchmark the likely costs in New Zealand by examining prices in countries that calculate the relevant electronics and software costs in a specified way. If not satisfied with the benchmarked costs, industry parties can request that the Commission calculates the costs itself.

“Even though benchmarking seems a simple idea, we only found two other countries—Denmark and Sweden—that price similar services in the right way at similar quality levels,” said Telecommunications Commissioner, Dr Stephen Gale. “We would have preferred a larger sample set but that does not appear to be available.”
You see what he says there?
"We're not entirely convinced we should be doing it this way in the first place, and the fact we have to do it this way, there's only two other countries we based everything off, so it's a shitty result regardless".

Still, I'm open to other sides of the coin if the argument is convincing. The original NZ Herald article was written to get consumers all fired up, and focuses purely on a single aspect in order to do-so. It was most certainly not written to be technically accurate.

Lets look at the flip side of the coin (Flip, see what I did there, the ISP name...!)
Flip are able to provide 5GB of DSL at the current price for $50 included with a phone line
Telecom are doing phone + 30GB DSL for $75
Subtract 5GB, subtract the phone, and the base DSL costs (Basically subtract the $50) and you're left with Telecom charging $25 a month more for 25GB more of data.

Now you're looking at it from that perspective, which charges do you think seem more "fair" and which charges do you think seem more of a "long time rort"? ;) 		Chilling_Silence (9)
1321988 2013-01-09 02:07:00 This is from their official statement:



Ahhhhhh, I see, the Commission has come to a conclusion in accordance with an ‘Act of Parliament” and then excused themselves by saying the “Act” doesn’t give them enough scope to do the job thoroughly. grrrrrrrreat!

So what was the point of the investigation in the first place if the restrictions of an Act of Parliament leave the outcome debatable or inconclusive?

Another classic case of why NZ is going down the gurgler I guess.

Even so, the discrepancy between NZ and Sweden and Denmark who use the same pricing method is significant and needs addressing. :) 		B.M. (505)
1321989 2013-01-09 02:42:00 In a nutshell yeah.

Now the discrepancy may potentially be worth looking at, but I can't say I know a great deal about Sweden or Denmark.

I can however, safely say, that when you look at it like this, I'm happy to pay my dues:

-- The equipment in the cabinets and exchanges has been upgraded I believe a grand total of 6x in total since Jetstream first became available in NZ in the year 2000.

-- There are 3,500 cabinets that went in in the last 3-odd years? Each costs $150,000 ballpark. That's half a billion dollars.

-- The equipment in there, not cheap. 3,500 cabinets (Not even counting exchanges) means each cabinet services well under 150 houses.

-- That means that where they're charging $22 a month, it's going to take a fully loaded cabinet 4 years to pay itself off for the initial investment of putting it there (But they're not all fully loaded, not by a long-shot)

-- Then we want them to go and invest in FTTH. How much is it again that people want to pay to get it installed? Nothing? Remember this is a *company* that's there to make money. They make money by selling you DSL. If they're not making money, what is the point of them being in business? I don't have shares in them but even I can see that, it's black and white really.

-- Now, considering the cost of data vs the wholesale DSL port cost (Previous post), then looking Fibre as providing faster speeds and the ability to basically blow your data cap in a few minutes, presuming that naturally we're going to start using more data (They've increased by at least 10% a year since they were released), isn't it worth us actually looking at the cost of data instead as being the main cost-culprit both now and in the future?

So I think the only thing that I actually agree with Chris Barton on is the first part, that the methodology that the Comcom had to use was stupid, as a result of their legislation, and they're kind of caught between a rock and a hard place.

The second point he makes I'm quite happy to say the aforementioned proves:
a) he's misdirected at best with his blame for where DSL is costing consumers the most
b) the decrease in price is going to severely hamstring the company from wanting to make further investments if that's how they're going to
c) he's got some kind of "tall poppy syndrome" and just doesn't like Telecom and cuts at them any chance he can get

The third point he makes further shows his ignorance, let me explain:
If I can offer you ADSL2+ at speeds of 24/1mbps, or VDSL2 at speeds of up to 50/10mbps, both are the same price, which would you choose? It's a no-brainer, you'd choose the faster
What if one of them was marginally more expensive? Which would you choose? It'd depend on if you were a budget-concious family wanting to get online for just the odd one or two things, or if you lived and breathed on the internet using it for games and video etc

Now lets add Fibre to the mix.
If all three of these cost the same, which would you choose:
a) ADSL2+ at 24/1mbps
b) VDSL2 at 50/10mbps
c) Fibre at 100/100mbps

It's a no-brainer, you'd choose Fibre.
What if they all offered the same amount of data per month, but each cost $20 more:
a) cost $50 a month
b) cost $70 a month
c) cost $90 a month

Which would you buy?
Again, it'd depend on your circumstances
So when you think about it, they could *very* easily price themselves out of the market meaning they'd NEVER make their money back, so they *have* to price it competitively or they won't get anybody changing over...

Remind me again why the Govt needs to get involved in that?

I mean, take the iPhone for example. Yeah we pay more for it over here in NZ than other countries, but people still buy it in their droves, don't they? Same for the Galaxy S3?
Government didn't need to step in and say "Heeeey Apple, come now, you can get it much cheaper overseas, you need to drop your price". Nope, they're not getting involved? Why? Because the market pretty much self-regulates... That's just the nature of the beast!

</rant>
:D 		Chilling_Silence (9)
1321990 2013-01-09 03:15:00 Well put Chill.. paulw (1826)
1321991 2013-01-09 03:29:00 Well put Chill..
Thanks :D though I'm surprised I still had anybodies attention at the end of that rant ;) 		Chilling_Silence (9)
1321992 2013-01-09 03:36:00 Lol +1 I'm surprised I read it all ;) very nicely put Chill. lordnoddy (3645)
1321993 2013-01-09 04:18:00 and + another 1 Chill.

There are far too many moaners who want everything for nothing, blame the government for everything and generally just pick holes at every perceived oportunity. It is easy to find fault it is a lot harder to come up with a better way of doing things. 		CliveM (6007)
1321994 2013-01-09 06:24:00 ^^ You *can* see the costs. $22 a month currently. What more do you need to see? :p

Everything else on top of that is data, backhaul, and company infrastructure (Such as support, building rental, phones, accounts etc). Yet magically this is something that Flip is able to include, in their $50 for phone line and broadband packages, as well as including 5GB of data.

Everything else is pretty much 100% profit for ISPs as they milk the per-GB data costs.
I am sorry Chill but you appear to be pulling numbers out of your hat. Where is the hard evidence on the costs involved. 		mikebartnz (21)
1321995 2013-01-09 06:57:00 What costs?

EDIT: I can promise I'm not pulling anything outta my ass, so just let me know and I'll clarify and find you the prices ;) 		Chilling_Silence (9)
1321996 2013-01-09 07:10:00 and + another 1 Chill.

There are far too many moaners who want everything for nothing, blame the government for everything and generally just pick holes at every perceived oportunity. It is easy to find fault it is a lot harder to come up with a better way of doing things.
x1 		prefect (6291)
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