Marketroids look to a tiered Internet

Discussion in 'NZ Computing' started by Philip, Jan 13, 2006.

  1. Philip

    Philip Guest

    It's been a while coming, but the mad marketroids in the US are active
    again - and this time they want to create a tiered internet, where you
    have to pay more to make it work properly.

    http://arstechnica.com/news.ars/post/20060112-5965.html

    We're lucky in NZ that because we don't have proper broadband anyway, we
    won't notice it happening right away.

    Unless Telecom decides to get even further into the act by screwing us
    for connections it thinks we ought to have to pay more to receive.

    How about a 120 second delay on Google searches unless you pay the
    Telecom Tax?

    Anyone here care to guarantee they wouldn't do that?

    Philip
    Philip, Jan 13, 2006
    #1
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  2. Philip

    steve Guest

    Philip wrote:

    > It's been a while coming, but the mad marketroids in the US are active
    > again - and this time they want to create a tiered internet, where you
    > have to pay more to make it work properly.
    >
    > http://arstechnica.com/news.ars/post/20060112-5965.html
    >
    > We're lucky in NZ that because we don't have proper broadband anyway, we
    > won't notice it happening right away.
    >
    > Unless Telecom decides to get even further into the act by screwing us
    > for connections it thinks we ought to have to pay more to receive.
    >
    > How about a 120 second delay on Google searches unless you pay the
    > Telecom Tax?
    >
    > Anyone here care to guarantee they wouldn't do that?
    >
    > Philip


    This sounds like the classic "wedge" approach to introducing new products.

    When the roll-out of new services is in an early phase, but the hype is
    high, you charge the early adopters heaps extra.

    As the rollout proceeds and competitive pressures appear, you gradually cut
    the prices as you extend the reach...

    .....until one day it's a commodity and everyone has it.

    The only problem in NZ is the general lack of any competitive
    pressure.....mainly due to Richard Prebble and the 4th Labour government
    selling the telecoms infrastructure for a small fraction (10%?) of what it
    would have cost to build a competitive one or replace the existing one.

    From that day to this, it was inevitable there could be no serious
    competition to Telecom NZ on fixed-line connectivity services. Maybe that
    was the real intention.....
    steve, Jan 14, 2006
    #2
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  3. Philip

    AD. Guest

    On Fri, 13 Jan 2006 23:00:48 +1300, Philip wrote:

    > We're lucky in NZ that because we don't have proper broadband anyway, we
    > won't notice it happening right away.


    It's already happening. When Telstra and Telecom depeered they used the
    same bogus justification about content providers using their pipes for
    free that the AT&T CEO used.

    --
    Cheers
    Anton
    AD., Jan 15, 2006
    #3
  4. Philip

    steve Guest

    AD. wrote:

    > On Fri, 13 Jan 2006 23:00:48 +1300, Philip wrote:
    >
    >> We're lucky in NZ that because we don't have proper broadband anyway, we
    >> won't notice it happening right away.

    >
    > It's already happening. When Telstra and Telecom depeered they used the
    > same bogus justification about content providers using their pipes for
    > free that the AT&T CEO used.


    True...and they likely got the idea from AT&T.....as AT&T refused to peer
    with NZ Telecom in the US unless little, tiny Telecom paid great big AT&T a
    pile of money....with none going the other way.

    In the US, Tier 1 network companies generally only peer with each
    other.....and while you could make a network-based argument for it, it just
    also happens to have the potential to function like a cartel.
    steve, Jan 16, 2006
    #4
  5. Philip

    Rob J Guest

    In article <>,
    says...
    > Philip wrote:
    >
    > > It's been a while coming, but the mad marketroids in the US are active
    > > again - and this time they want to create a tiered internet, where you
    > > have to pay more to make it work properly.
    > >
    > > http://arstechnica.com/news.ars/post/20060112-5965.html
    > >
    > > We're lucky in NZ that because we don't have proper broadband anyway, we
    > > won't notice it happening right away.
    > >
    > > Unless Telecom decides to get even further into the act by screwing us
    > > for connections it thinks we ought to have to pay more to receive.
    > >
    > > How about a 120 second delay on Google searches unless you pay the
    > > Telecom Tax?
    > >
    > > Anyone here care to guarantee they wouldn't do that?
    > >
    > > Philip

    >
    > This sounds like the classic "wedge" approach to introducing new products.
    >
    > When the roll-out of new services is in an early phase, but the hype is
    > high, you charge the early adopters heaps extra.
    >
    > As the rollout proceeds and competitive pressures appear, you gradually cut
    > the prices as you extend the reach...
    >
    > ....until one day it's a commodity and everyone has it.
    >
    > The only problem in NZ is the general lack of any competitive
    > pressure.....mainly due to Richard Prebble and the 4th Labour government
    > selling the telecoms infrastructure for a small fraction (10%?) of what it
    > would have cost to build a competitive one or replace the existing one.
    >
    > From that day to this, it was inevitable there could be no serious
    > competition to Telecom NZ on fixed-line connectivity services. Maybe that
    > was the real intention.....


    It didn't stop Saturn...you used their services, as do many people
    today.

    Then Saturn got taken over by Telstra, who figured they could make a
    bigger profit by taking some of Telecom's.
    Rob J, Jan 16, 2006
    #5
  6. Philip

    Rob J Guest

    In article <>,
    says...

    > The only problem in NZ is the general lack of any competitive
    > pressure.....mainly due to Richard Prebble and the 4th Labour government
    > selling the telecoms infrastructure for a small fraction (10%?) of what it
    > would have cost to build a competitive one or replace the existing one.
    >
    > From that day to this, it was inevitable there could be no serious
    > competition to Telecom NZ on fixed-line connectivity services. Maybe that
    > was the real intention.....


    The value of those lines for telephone services, which at the time
    constituted most of Telecom's business, is relatively little.

    Where the money comes from today is all the added value stuff.

    Do you see any other company building a network just for phone calls?
    Everyone is into data and added value.
    Rob J, Jan 16, 2006
    #6
  7. Philip

    steve Guest

    Rob J wrote:

    > In article <>,
    > says...
    >> Philip wrote:
    >>
    >> > It's been a while coming, but the mad marketroids in the US are active
    >> > again - and this time they want to create a tiered internet, where you
    >> > have to pay more to make it work properly.
    >> >
    >> > http://arstechnica.com/news.ars/post/20060112-5965.html
    >> >
    >> > We're lucky in NZ that because we don't have proper broadband anyway,
    >> > we won't notice it happening right away.
    >> >
    >> > Unless Telecom decides to get even further into the act by screwing us
    >> > for connections it thinks we ought to have to pay more to receive.
    >> >
    >> > How about a 120 second delay on Google searches unless you pay the
    >> > Telecom Tax?
    >> >
    >> > Anyone here care to guarantee they wouldn't do that?
    >> >
    >> > Philip

    >>
    >> This sounds like the classic "wedge" approach to introducing new
    >> products.
    >>
    >> When the roll-out of new services is in an early phase, but the hype is
    >> high, you charge the early adopters heaps extra.
    >>
    >> As the rollout proceeds and competitive pressures appear, you gradually
    >> cut the prices as you extend the reach...
    >>
    >> ....until one day it's a commodity and everyone has it.
    >>
    >> The only problem in NZ is the general lack of any competitive
    >> pressure.....mainly due to Richard Prebble and the 4th Labour government
    >> selling the telecoms infrastructure for a small fraction (10%?) of what
    >> it would have cost to build a competitive one or replace the existing
    >> one.
    >>
    >> From that day to this, it was inevitable there could be no serious
    >> competition to Telecom NZ on fixed-line connectivity services. Maybe that
    >> was the real intention.....

    >
    > It didn't stop Saturn...you used their services, as do many people
    > today.


    It DID stop Saturn.

    They spent hundreds and hundreds of millions of dollars and managed to cover
    only Kapiti, parts of Wellington and a bit of Christchurch. They had to
    sell up because the banks backing them were close to refusing to grant them
    any more loans.

    Telstra bought them and promptly stopped investing in new residential
    coverage, focussing instead on business services and a campaign directed at
    government to alter the regulatory regime to allow them more and cheaper
    access to Telecom's infrastructure.....as TelstraSaturn (then) was NOT
    going to be investing any more money in residential infrastructure.

    > Then Saturn got taken over by Telstra, who figured they could make a
    > bigger profit by taking some of Telecom's.


    See above.....the WHY is important.
    steve, Jan 16, 2006
    #7
  8. Philip

    steve Guest

    Rob J wrote:

    > In article <>,
    > says...
    >
    >> The only problem in NZ is the general lack of any competitive
    >> pressure.....mainly due to Richard Prebble and the 4th Labour government
    >> selling the telecoms infrastructure for a small fraction (10%?) of what
    >> it would have cost to build a competitive one or replace the existing
    >> one.
    >>
    >> From that day to this, it was inevitable there could be no serious
    >> competition to Telecom NZ on fixed-line connectivity services. Maybe that
    >> was the real intention.....

    >
    > The value of those lines for telephone services, which at the time
    > constituted most of Telecom's business, is relatively little.


    Compared to what?

    > Where the money comes from today is all the added value stuff.


    Yeeeees.

    > Do you see any other company building a network just for phone calls?
    > Everyone is into data and added value.


    Do you see any other company building a fixed-line network to every home for
    ANY purpose?

    No.

    It's not economic.....but telecom owns just such a network - paid for by
    taxpayers and sold in 1990 for a LOT less than what it would have cost in
    1990 to rebuild it from scratch in 1990 - or today.

    The proof?

    No one else has - for ANY reason, purpose or service.

    Not economic. But Telecom owns one.

    You starting to see the light on this one, Rob?

    How did Telecom get such a network when it isn't economic to profitably
    build it - in 1990 or now?

    They got it for a lot less than it cost to build - or rebuild.
    steve, Jan 16, 2006
    #8
  9. Philip

    Rob J Guest

    In article <>,
    says...
    > Rob J wrote:
    >
    > > In article <>,
    > > says...
    > >
    > >> The only problem in NZ is the general lack of any competitive
    > >> pressure.....mainly due to Richard Prebble and the 4th Labour government
    > >> selling the telecoms infrastructure for a small fraction (10%?) of what
    > >> it would have cost to build a competitive one or replace the existing
    > >> one.
    > >>
    > >> From that day to this, it was inevitable there could be no serious
    > >> competition to Telecom NZ on fixed-line connectivity services. Maybe that
    > >> was the real intention.....

    > >
    > > The value of those lines for telephone services, which at the time
    > > constituted most of Telecom's business, is relatively little.

    >
    > Compared to what?


    Compared to the cost of building and maintaining the network, I guess.


    > > Where the money comes from today is all the added value stuff.

    >
    > Yeeeees.
    >
    > > Do you see any other company building a network just for phone calls?
    > > Everyone is into data and added value.

    >
    > Do you see any other company building a fixed-line network to every home for
    > ANY purpose?
    >
    > No.
    >
    > It's not economic.....but telecom owns just such a network - paid for by
    > taxpayers and sold in 1990 for a LOT less than what it would have cost in
    > 1990 to rebuild it from scratch in 1990 - or today.


    But to run it for more than phones, you have to invest money in it. And
    that's what Telecom is about to do - rolling out a new IP based network
    across NZ.

    And then, that current network includes all the lines to places where it
    cost more to install than any telco would ever receive in revenue.


    >
    > The proof?
    >
    > No one else has - for ANY reason, purpose or service.
    >
    > Not economic. But Telecom owns one.
    >
    > You starting to see the light on this one, Rob?
    >
    > How did Telecom get such a network when it isn't economic to profitably
    > build it - in 1990 or now?
    >
    > They got it for a lot less than it cost to build - or rebuild.


    They got it for what it was worth at the time.
    Rob J, Jan 16, 2006
    #9
  10. Philip

    Philip Guest

    Rob J wrote:
    > In article <>,
    > says...
    >> Rob J wrote:
    >>
    >>> In article <>,
    >>> says...
    >>>
    >>>> The only problem in NZ is the general lack of any competitive
    >>>> pressure.....mainly due to Richard Prebble and the 4th Labour government
    >>>> selling the telecoms infrastructure for a small fraction (10%?) of what
    >>>> it would have cost to build a competitive one or replace the existing
    >>>> one.
    >>>>
    >>>> From that day to this, it was inevitable there could be no serious
    >>>> competition to Telecom NZ on fixed-line connectivity services. Maybe that
    >>>> was the real intention.....
    >>> The value of those lines for telephone services, which at the time
    >>> constituted most of Telecom's business, is relatively little.

    >> Compared to what?

    >
    > Compared to the cost of building and maintaining the network, I guess.
    >
    >
    >>> Where the money comes from today is all the added value stuff.

    >> Yeeeees.
    >>
    >>> Do you see any other company building a network just for phone calls?
    >>> Everyone is into data and added value.

    >> Do you see any other company building a fixed-line network to every home for
    >> ANY purpose?
    >>
    >> No.
    >>
    >> It's not economic.....but telecom owns just such a network - paid for by
    >> taxpayers and sold in 1990 for a LOT less than what it would have cost in
    >> 1990 to rebuild it from scratch in 1990 - or today.

    >
    > But to run it for more than phones, you have to invest money in it. And
    > that's what Telecom is about to do - rolling out a new IP based network
    > across NZ.
    >
    > And then, that current network includes all the lines to places where it
    > cost more to install than any telco would ever receive in revenue.
    >
    >
    >> The proof?
    >>
    >> No one else has - for ANY reason, purpose or service.
    >>
    >> Not economic. But Telecom owns one.
    >>
    >> You starting to see the light on this one, Rob?
    >>
    >> How did Telecom get such a network when it isn't economic to profitably
    >> build it - in 1990 or now?
    >>
    >> They got it for a lot less than it cost to build - or rebuild.

    >
    > They got it for what it was worth at the time.


    Nope. They got it, and the other stuff that nobody recognised had value
    like the numbering system and all those wayleaves and the copyrights in
    the directory listings, for about a tenth or its true value. Richard
    Prebble and his political mates really screwed the taxpayers that had
    paid over the years to create the phone system and suddenly found their
    investment was being sold from under then.

    This was the privatisation that really shafted the taxpayer - worse even
    than the Fay, Richwhite railway rip-off.

    Since then, Telecom have run a moderately competent POTS system, and
    have routinely shafted the customers on call charges, tolls (why charge
    by distance when the system is indifferent to distance?) and. most
    notoriously, broadband, where Telecom continues to offer one of the
    worst-value "broadband" services in the OECD. It's so feeble that ITU
    doesn't even recognise it as true broadband.

    And each year, Telecom takes a from 800 million to a billion dollars
    away from New Zealand customers and distributes it to its mainly foreign
    shareholders.

    How is this better than the previous arrangements?

    Philip
    Philip, Jan 16, 2006
    #10
  11. Philip

    shannon Guest

    On Mon, 16 Jan 2006 23:18:46 +1300, Philip wrote:

    > Rob J wrote:
    >> In article <>,
    >> says...
    >>> Rob J wrote:
    >>>
    >>>> In article <>,
    >>>> says...
    >>>>
    >>>>> The only problem in NZ is the general lack of any competitive
    >>>>> pressure.....mainly due to Richard Prebble and the 4th Labour government
    >>>>> selling the telecoms infrastructure for a small fraction (10%?) of what
    >>>>> it would have cost to build a competitive one or replace the existing
    >>>>> one.
    >>>>>
    >>>>> From that day to this, it was inevitable there could be no serious
    >>>>> competition to Telecom NZ on fixed-line connectivity services. Maybe that
    >>>>> was the real intention.....
    >>>> The value of those lines for telephone services, which at the time
    >>>> constituted most of Telecom's business, is relatively little.
    >>> Compared to what?

    >>
    >> Compared to the cost of building and maintaining the network, I guess.
    >>
    >>
    >>>> Where the money comes from today is all the added value stuff.
    >>> Yeeeees.
    >>>
    >>>> Do you see any other company building a network just for phone calls?
    >>>> Everyone is into data and added value.
    >>> Do you see any other company building a fixed-line network to every home for
    >>> ANY purpose?
    >>>
    >>> No.
    >>>
    >>> It's not economic.....but telecom owns just such a network - paid for by
    >>> taxpayers and sold in 1990 for a LOT less than what it would have cost in
    >>> 1990 to rebuild it from scratch in 1990 - or today.

    >>
    >> But to run it for more than phones, you have to invest money in it. And
    >> that's what Telecom is about to do - rolling out a new IP based network
    >> across NZ.
    >>
    >> And then, that current network includes all the lines to places where it
    >> cost more to install than any telco would ever receive in revenue.
    >>
    >>
    >>> The proof?
    >>>
    >>> No one else has - for ANY reason, purpose or service.
    >>>
    >>> Not economic. But Telecom owns one.
    >>>
    >>> You starting to see the light on this one, Rob?
    >>>
    >>> How did Telecom get such a network when it isn't economic to profitably
    >>> build it - in 1990 or now?
    >>>
    >>> They got it for a lot less than it cost to build - or rebuild.

    >>
    >> They got it for what it was worth at the time.

    >
    > Nope. They got it, and the other stuff that nobody recognised had value
    > like the numbering system and all those wayleaves and the copyrights in
    > the directory listings, for about a tenth or its true value. Richard
    > Prebble and his political mates really screwed the taxpayers that had
    > paid over the years to create the phone system and suddenly found their
    > investment was being sold from under then.
    >
    > This was the privatisation that really shafted the taxpayer - worse even
    > than the Fay, Richwhite railway rip-off.
    >
    > Since then, Telecom have run a moderately competent POTS system, and
    > have routinely shafted the customers on call charges, tolls (why charge
    > by distance when the system is indifferent to distance?) and. most
    > notoriously, broadband, where Telecom continues to offer one of the
    > worst-value "broadband" services in the OECD. It's so feeble that ITU
    > doesn't even recognise it as true broadband.
    >



    That's a bit of a half truth isn't it given that Telecom offers ADSL at
    256k/s, 1Mb/s and 2Mb/s

    http://en.wikipedia.org/wiki/Broadband_internet

    Broadband is often called high-speed Internet, because it usually has a
    high rate of data. In general, any connection to the customer of 256
    kbit/s (0.256 Mbit/s) or more is considered broadband Internet. The
    International Telecommunication Union Standardization Sector (ITU-T)
    recommendation I.113 has defined broadband as a transmission capacity that
    is faster than primary rate ISDN, at 1.5 to 2 Mbit/s. The FCC definition
    of broadband is 200 kbit/s (0.2 Mbit/s) in one direction, and advanced
    broadband is at least 200 kbit/s in both directions. The OECD has defined
    broadband as 256 kbit/s in at least one direction and this bit rate is the
    most common baseline that is marketed as "broadband" around the world.
    There is no specific bitrate defined by the industry, however, and
    "broadband" can mean lower-bitrate transmission methods. Some Internet
    Service Providers (ISPs) use this to advantage, in marketing lower-bitrate
    connections as broadband.
    shannon, Jan 16, 2006
    #11
  12. Philip

    steve Guest

    Philip wrote:

    > And each year, Telecom takes a from 800 million to a billion dollars
    > away from New Zealand customers and distributes it to its mainly foreign
    > shareholders.
    >
    > How is this better than the previous arrangements?


    It isn't.

    Most of the improvements people attribute to privatisation actually got
    underway while Peter Troughton was leading Telecom as an SOE.

    NZ Post is an example of what Telecom might have been had it remained in
    public ownership.

    An SOE that understands how to make money AND operate an important public
    service in a way that shows some understanding of the public good.
    steve, Jan 17, 2006
    #12
  13. Philip

    steve Guest

    shannon wrote:

    > That's a bit of a half truth isn't it given that Telecom offers ADSL at
    > 256k/s, 1Mb/s and 2Mb/s
    >
    > http://en.wikipedia.org/wiki/Broadband_internet


    I thought it was the 128k upstream that made the offering sub-standard in
    the eyes of others.

    I could be wrong. It's happened before. :)
    steve, Jan 17, 2006
    #13
  14. Philip

    Rob J Guest

    In article <>,
    says...
    > Philip wrote:
    >
    > > And each year, Telecom takes a from 800 million to a billion dollars
    > > away from New Zealand customers and distributes it to its mainly foreign
    > > shareholders.
    > >
    > > How is this better than the previous arrangements?

    >
    > It isn't.
    >
    > Most of the improvements people attribute to privatisation actually got
    > underway while Peter Troughton was leading Telecom as an SOE.
    >
    > NZ Post is an example of what Telecom might have been had it remained in
    > public ownership.
    >
    > An SOE that understands how to make money AND operate an important public
    > service in a way that shows some understanding of the public good.


    The primary goal in forming the SOEs was as the precursor to full
    privatisation and many were. There was and has been no other incentive
    to reform inefficient government bureacracy. Labour has returned several
    SOEs to a more bureacratic inefficient model of operation.
    Rob J, Jan 17, 2006
    #14
  15. Philip

    Mutlley Guest

    steve <> wrote:

    >Philip wrote:
    >
    >> And each year, Telecom takes a from 800 million to a billion dollars
    >> away from New Zealand customers and distributes it to its mainly foreign
    >> shareholders.
    >>
    >> How is this better than the previous arrangements?

    >
    >It isn't.
    >
    >Most of the improvements people attribute to privatisation actually got
    >underway while Peter Troughton was leading Telecom as an SOE.
    >
    >NZ Post is an example of what Telecom might have been had it remained in
    >public ownership.
    >


    You mean Books and More. NZ Post these days is nothing but a book
    shop..
    Mutlley, Jan 17, 2006
    #15
  16. Philip

    steve Guest

    Mutlley wrote:

    > steve <> wrote:
    >
    >>Philip wrote:
    >>
    >>> And each year, Telecom takes a from 800 million to a billion dollars
    >>> away from New Zealand customers and distributes it to its mainly foreign
    >>> shareholders.
    >>>
    >>> How is this better than the previous arrangements?

    >>
    >>It isn't.
    >>
    >>Most of the improvements people attribute to privatisation actually got
    >>underway while Peter Troughton was leading Telecom as an SOE.
    >>
    >>NZ Post is an example of what Telecom might have been had it remained in
    >>public ownership.
    >>

    >
    > You mean Books and More. NZ Post these days is nothing but a book
    > shop..


    That delivers mail to my house?

    I don't think so.
    steve, Jan 18, 2006
    #16
  17. Philip

    steve Guest

    Mutlley wrote:

    > You mean Books and More. NZ Post these days is nothing but a book
    > shop..


    ....and you forgot Kiwibank.
    steve, Jan 18, 2006
    #17
  18. Philip

    Mutlley Guest

    steve <> wrote:

    >Mutlley wrote:
    >
    >> steve <> wrote:
    >>
    >>>Philip wrote:
    >>>
    >>>> And each year, Telecom takes a from 800 million to a billion dollars
    >>>> away from New Zealand customers and distributes it to its mainly foreign
    >>>> shareholders.
    >>>>
    >>>> How is this better than the previous arrangements?
    >>>
    >>>It isn't.
    >>>
    >>>Most of the improvements people attribute to privatisation actually got
    >>>underway while Peter Troughton was leading Telecom as an SOE.
    >>>
    >>>NZ Post is an example of what Telecom might have been had it remained in
    >>>public ownership.
    >>>

    >>
    >> You mean Books and More. NZ Post these days is nothing but a book
    >> shop..

    >
    >That delivers mail to my house?
    >
    >I don't think so.

    Telecom still delivers a phone to my house..
    Mutlley, Jan 18, 2006
    #18
  19. Philip

    Mutlley Guest

    steve <> wrote:

    >Mutlley wrote:
    >
    >> You mean Books and More. NZ Post these days is nothing but a book
    >> shop..

    >
    >...and you forgot Kiwibank.
    >

    You mean the bank that the tax payer props up all the time??
    Mutlley, Jan 18, 2006
    #19
  20. In article <>, Mutlley <> wrote:
    >steve <> wrote:
    >
    >>Mutlley wrote:
    >>
    >>> You mean Books and More. NZ Post these days is nothing but a book
    >>> shop..

    >>
    >>...and you forgot Kiwibank.
    >>

    >You mean the bank that the tax payer props up all the time??


    Currently, yes ... and yet it is still ahead of market forecasts ? :)

    Bruce

    ----------------------------------------
    I believe you find life such a problem because you think there are the good
    people and the bad people. You're wrong, of course. There are, always and
    only, the bad people, but some of them are on opposite sides.

    Lord Vetinari in Guards ! Guards ! - Terry Pratchett

    Caution ===== followups may have been changed to relevant groups
    (if there were any)
    Bruce Sinclair, Jan 19, 2006
    #20
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