ISPs see pay as you go broadband as solution to bandwidth hogging

[tamarisk]

http://www.pcpro.co.uk/?http://www.pcpro.co.uk/news/news_story.php?id=54300

ISPs see pay as you go broadband as solution to bandwidth hogging
[PC Pro] 11:49

NTL is playing down talks that it is testing pay-as-you-go broadband services.

Various newsgroups, including hthell:world, are claiming that the cable provider is testing two potential services: pay-as-you-go (PAYG) and pre-pay. However an NTL spokesperson told us that it is merely an 'infrastructure and technology trial'.

Although you won't find a big-name ISP that will admit to it, PAYG has become something of a buzz-phrase in broadband circles as an alternative to bandwidth capping. Unlike the dial-up equivalent, which charges for time connected to the Internet, PAYG charges for bandwidth used. Thus, activities that suck up large amounts of bandwidth, such as P2P file sharing, will cost more.

Curtailing bandwidth-hogging is an increasing concern for ISPs. As broadband take-up accelerates - the number of ADSL connections has doubled to two million since June 2003 - increased pressure is being placed on the 50:1 contention ratio of most services. Some users have complained that during busy periods their broadband connection is no quicker than dial-up.

Some of this pressure will be relieved as exchanges are upgraded to prepare for 1Mbit services and beyond. However, the ISPs we spoke to were sceptical and are currently more interested in local loop unbundling, which appeared to have been all-but-forgotten. At last week's ISPA awards, industry-regulator Ofcom's promise to push forward with LLU drew the biggest cheer of the night.

The signs are promising. The number of unbundled loops grew by 240 per cent between January and November last year and Freeserve recently announced its intention to re-investigate it. The success of Bulldog, which has unbundled some 400 exchanges and is preparing a 20Mbit service - something BT-reliant ISPs can only dream of, has not gone unnoticed. Of course, none of this affects cable providers such as NTL. But the pressures on its network - when it can scarcely afford to invest - are just the same.

Simon Aughton

[aboi]

golly sounds like a nice idea but i'll stick to sbc

[kiwibank]

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Telecom Corporation of New Zealand Limited (NS)

Telecom's golden egg secure

24.12.2003
By PETER GRIFFIN telecoms writer

Telecom has been spared the full impact of deregulation, thanks to a shock recommendation from the Commerce Commission not to open the network operator's copper line network to competitors such as TelstraClear.

Telecommunications Commissioner Douglas Webb yesterday backtracked on a draft proposal released in September which recommended that the Government unbundle Telecom's "local loop" - effectively allowing competitors to piggyback on its vast network to deliver their own high-speed internet and local call services.

The commission had estimated a gain to consumers and businesses of $204 million over five years from full unbundling.

Intensive lobbying from Telecom and allies such as Broadcast Communications, the Business Roundtable and Federated Farmers has since stressed the dangers of unbundling, notably that it would deter new infrastructure investment.

A watered-down final decision sees competitors gain "bitstream access" for digital subscriber line (DSL) services, which deliver Telecom's Jetstream high-speed internet to home users and small- and medium-sized businesses.

Bitstream access is a win for internet providers struggling to make a living reselling Jetstream, but it is of limited use without other components of unbundling, notably access to copper lines.

The prospect of a provider such as TelstraClear entering the local calling market nationwide in competition with Telecom is now unlikely.

The decision means Telecom's competitors do not have to install their own equipment in Telecom's exchanges, but bitstream access is little more than a jazzed-up wholesaling deal.

TelstraClear chief executive Rosemary Howard said the report was "very disappointing" and would do little to "cure New Zealand's broadband problem".

Webb said that when costs were weighed up, unbundling was considered too expensive and technically difficult for Telecom to implement.

Unbundling had proved to be a disaster overseas and a last-minute wholesaling deal tabled by Telecom last month had effectively removed the need for it.

That well-timed offer was aimed at granting competitors a wholesale deal for Telecom circuits, allowing them to service corporate customers beyond the reach of their own networks.

At the time, TelstraClear scoffed at Telecom's offer, which was subsequently fleshed out in letters to the commission.

Telecom's head of regulatory affairs, Bruce Parkes, said the company was not offering anything new, but improving pricing and technical configuration.

"TelstraClear has always been able to fill in the gaps. That's why they have customers like the BNZ."

Telecom had undertaken to provide the service from July and it would be monitored by the commission to ensure it was effective.

Sydney-based telecoms analyst Paul Budde said TelstraClear might have to revive plans for serious investment in networks, which would not be received "with much enthusiasm by the mother company in Australia".

"The big loser is TelstraClear. They'll have to rethink their position in the New Zealand market," he said.

Budde doubted that DSL bitstream access alone would generate much new competition on a large scale as voice calling was still the big earner in the telco business and Telecom's monopoly remained undented.

Telecom earned more than $1 billion in line access charges alone in the year to June 30, showing just how lucrative voice services are. By comparison, DSL revenue was just $56 million.

Webb envisaged significant competition in the broadband market, though he declined to outline any growth projections.

While the scrapped plan for full unbundling would have stimulated competition in local calling, the priority for Webb was generating broadband competition.

"[Local calling competition] we saw as a benefit of full local loop unbundling, but it wasn't the primary focus for doing it," he said.

"Competing voice services fade into the background."

Communications Minister Paul Swain will now review the commission's recommendation and has promised to come out with a final decision by May, after opening his office door to another wave of telco lobbyists.

Webb said the bitstream access plan, if approved, could take effect six months after that.

Telecom's share price closed up 5c at $5.25 yesterday.

Local loop recommendations

Rejected

* Full unbundling - giving other phone companies access to the copper lines linking Telecom's customers with the telephone exchange, and allowing them to use those lines as they wish.

* Alternative of allowing competitors to share Telecom-provided services on those lines also rejected.

* Full unbundling would allow competitors to provide new calling and internet services, with less reliance on Telecom - but at higher cost.

Recommended

* High-speed data or "bitstream" system used by Telecom to deliver Jetstream services should be opened to competitors.

* Competitors also gain access to other parts of Telecom's network needed to allow bitstream access.


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on zeropaid, it pays to be "flame resistant". it`s a matter of survival.

[jimmy90]

So they are saying that broadband sucks because we all use it for broadband applications.

I'm going back to dial-up.

[Class316]

If that happens that would really suck :(

[que-em]

Couldn't we buy our own servers and put them in the neighborhoods? Just a question that I don't know the answer to. We definately need to get rid of the middleman. Looking at Howard Deans' campaign we definately could raise the money.