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All our broadband eggs still in one basket

Labour’s Trevor Mallard called Wednesday’s connection numbers “hopeless.”

Latest figures from Chorus, charged by the government to rollout ultra-fast broadband to New Zealand, show that the progress is still slow. The news release is a masterful piece of spin. However, when you start to analyse the underlying numbers, it shows we are a really long way off fast broadband delivered by UFB.

The National Business Review reported that:

“The latest numbers released by ICT Minister Amy Adams, for the December quarter, show Chorus [NZX: CNU] and other UFB contract holders have now rolled fibre past 363,109 potential customers – an increase of 40,630 over the September quarter.

Of those, 19,915 or 5.49% have signed up for a UFB account with a retail ISP. During the quarter, 5667 new UFB customers signed up.” – Source

Let’s analyse these numbers a little more.

The key words here are “rolled fibre past.” In other words, ran UFB past potential customers, didn’t actually connect them. Good luck with getting a connection, with anecdotal reports showing that getting plugged into UFB can be a huge challenge. A good example is in the comments of the article linked above. It shows a typical story of a customer attempting to negotiate a UFB connection and the comical process that occurs. So far, its taken three months, despite the fact that the fibre runs within 30cm of his house.

“An increase of 40,630 over the previous quarter”.

Side by side in a sentence those numbers look good. However, when you consider that there are around 1.6 million households in New Zealand, it starts to look less impressive. Let’s say we’ve now got cable running past 400,000 households. That leaves 1.2 million to go. If Chorus “rolls past” 40,000 households a quarter, then we’ll have UFB 100% available by 2022. Now, I couldn’t find statistics on how many business premises there are. However we know that there are just under 600,000 registered companies in New Zealand. If half of those have a physical premise, then full “roll past” isn’t complete until 2023 or later.

So nine years before roll past is finished.

Let’s have a look at connecting to UFB.

“Of those, 19,915 or 5.49% have signed up for a UFB account with a retail ISP. During the quarter, 5667 new UFB customers signed up.”

This is called spin. It could be read that 5.49% of people have signed up. The reality is that the percentage relates to the total number of properties rolled past. This means that the actual uptake is somewhere near 1%.

“During the quarter, 5667 new UFB customers signed up.”

So by that rate then by the year 2099 everyone will be connected.

Now, I’ve mangled the figures a bit, I’m not a statistician and I don’t have time to get completely accurate but you get the picture. It’s too slow. This is what happens when we put all our eggs in one basket and have inefficient, old, business processes trying to deploy what is new technology. It’s like employing one company to build motorways with no off or on ramps and then employing several companies to try and build those entry and exit points.

Why do we need it faster? Because demand is going to outstrip supply, that means that in the next few short years, even UFB by today’s standards will not be quick enough. So not only do we need that bandwidth now, we need to be doubling it every two or three years.

4K televisions are now very affordable. A new generation are going past the current High Definition (HD) to Ultra HD. Now, one of the biggest drivers of growth on the internet is video content. I can buy a 4K TV today and start to watch Ultra HD movies via the net. As long as I only want to watch two or three a month (if have a data cap of 500GB), I’m prepared to wait for the download. Because, an HD movie is 160GB on average. Those figures are going to drive a large increase in data usage. But wait, there’s more: 8K will be here in a few short years. (As an aside, 8K video streaming requires a connection of 48Gbps, 48 times faster than current UFB.)

The number of devices attaching to the internet is almost growing exponentially. From smart phones, to smart devices, smart houses, to the internet of things, all of these endpoints require bandwidth in various sizes. It is estimated that in the next two years the number of devices attached to the internet will increase to around 18 to 20 billion. My household has a dozen devices that attach to the internet. Now, I’m a technologist but you get the picture.

To cater for that growth, you need to increase speed and bandwidth between 50-100% a year, per household. That means 100Mbs last year, 200Mbs this year, 400Mbs in 2015, and so on. Yet UFB is only currently delivering 100Mbs (if you can get a connection).

I’ve commented before on how we need to get broadband right. Putting all our eggs in a single basket is going to leave us with motorways that no one can use and traffic congestion of the highest order. For a country that is heavily reliant on the Internet given our location and ICT industry, banking on the slowest fibre rollout on the planet is just dumb.

We can only hope that this year political parties get the message, change the policies, and start making some smart choices about how we deploy bandwidth better, faster, cheaper, and using whatever technology can provide, not just fibre. We need new plans and less spin.

Ian Apperley is the director at Isis Group and blogs at Whatisitwellington

Comments and questions
26

How about some disclosure here. What sort of internet connection do you have Mr. Apperley? Is it the best you can have? Have you got UFB in your street, or can you get VDSL? Or are you just like all the others. Happy to chuck rocks from the sidelines

The 4th wave of the internet, The Internet of Things (IOT), which has already commenced overseas, will drive the uptake of UFB by households in New Zealand, whether they like it or not. (They'll like it)

So I'm sad to say those who think that we or they don't need UFB, or that VDSL will do, are horribly out of touch.

My actual worry is that the capacity of the current UFB network roll out that is being done in NZ may not be anywhere near enough.

Meanwhile, back in the real world, the Commerce Commission is severely regulating the price that Chorus can charge for old copper, putting the fibre rollout and the viability of Chorus at risk.

Kiwis dont want fast internet. They want cheap internet.

I think I have some time yet before my fridge needs to download movies (which seems to be what you are implying with your unrealistic growth predictions)

Chorus is only one of the companies building the fibre network. But it is the only one that has a copper network and wants to avoid the regulation that has been in place since before Chorus won the UFB contract.

So let's look at the other LFCs - electricity companies all. Do you really think they haven't been affecfted by regulation? They are required to fund the UFB deployment from funds gathered under a far more heavily regulated environment than Chorus's copper lines operates under.

Kiwis do indeed want faster broadband. It's the number one topic I'm contacted about on a daily basis.

What's not happening is any attempt by the parties to educate small business about the benefits of it, nor any attempt to address the real elephant in the room - access to legal content.

[Paul Brislen is CEO of Tuanz, the Telecommunications Users Association of NZ - CK]

The uptake stats are well in line with expectations, as well as comparable rollouts of FTTH overseas.

Anybody who says otherwise either hasn't done the research, OR has a political point to make and so cares nothing for actual facts.

I beg to differ. In Eindhoven in the Netherlands, the municipally-funded fibre network achieved subscription rates in the region of around 70% of broadband households - albeit that the first year's subscription was subsidised so that it cost less than ADSL. The difference? The municipality marketed and sold the the connections on behalf of retailers. Likewise, in Japan, around 50% of broadband households nationwide have fibre connections. the difference here? Vertically integrated network ownership and retailing.
In both cases, the one firm deals with all the to-ing and fro-ing between the cable layer and the householder - none of the communication complications arising from structural separation between network operator and retailers in NZ, and retailers who have negligible incentives to market to their already pepper-potted ADSL customers in any given locality.

The numbers you are quoting are not the result of 1-2 years of rollout, they are after many years. Chorus and other lfcs have been rolling out for only 1-2 years, and the uptake after that period is very much in line with other countries after 1-2 years of rollout.

Try again.

MDUs are the main problem. Single dwellings are being rolled out in the timeframe. Complex installs, MDUs and right-of-way are the bottlenecks.

"Good luck with getting a connection, with anecdotal reports showing that getting plugged into UFB can be a huge challenge."

That's rhetoric from somebody who clearly doesn't have a clue and is simply relying on the word of others to write a story, rather than facts. I call on you to back your claim with some facts, or retract it.

Yes there are delays with some people. If you're in a MDU or shared driveway there are consent issues that have to be worked through and there are still major problems with this process and the timeframes.

For the vast majority of residential premises in NZ there are no such issues and the hundreds of connections that are currently being completed every week. Most of these people are receiving connections within 1-2 weeks of service orders being submitted. It's probably safe to say that out of the premises passed so far by the UFB rollout that somewhere in the vicinity of 90% could have UFB within this timeframe if they were to submit a UFB order with their RSP.

UFB is also *not* only delivering 100Mbps connections. Chorus Right Performing network upgrade is delivering 200Mbps offering to Chorus UFB customers, and right now there are growing number of people (mostly with Snap!) who are on this product.

If you're going to write an opinion piece please stick to facts, not rhetoric. You simply end up looking like a fool.

Every day I hear from customers (ISPs and their customers alike) about delays in getting connected to UFB fibre.

There are some serious delays (60 days in many cases) particularly in the design phase of the build - that is, before the clock officially starts.

These delays go under-reported yet hamper the roll out in a major way.

On top of that, I'm told of problems with multi-dwelling units (apartment blocks and also business parks) and if you're renting I'm told they will also reject your order on the basis that it's too complicated because they'll need two signatures, not one.

All of this coupled with ridiculous requirements from the Resource Management side of things (I'm told costs are double what they should be because of the red tape) mean the rollout might pass plenty of properties but getting signed up and connected is still hit and miss.

This isn't just a problem in the UFB programme - Chorus had promised to connect rural folk who were on the path of the RBI fibre build. It has since renegged on that promise and now won't connect farms that are on the route. Apparently it's too expensive, even when the farmers dig their own trenches.

[Paul Brislen is CEO of Tuanz, the Telecommunications Users Association of NZ - CK]

Uh, pretty sure Chorus has launched their fibre to the farm service...

http://www.chorus.co.nz/rural-broadband-initiative/fibre-in-rural-community/fibre-to-rural-communities-1

Sorry to let the facts get in the way of yet another Chorus beat up

Chorus promised farmers that if the RBI fibre ran past the entrance to their farms, and if they dug a trench to the front gate, that Chorus would connect them up.

That's the project you refer to.

That hasn't happened and at last year's rural event in Whanganui, Chorus's head of industry relations, Craig Young, told the audience that despite the promise, it wouldn't be happening at all.

Fibre will run to the school, and from there farmers can get either copper (if available) or fixed wireless delivered by Vodafone, but no fibre.

Did you even follow the link in my post? Sounds like a rural fibre service for households and businesses en route to me, subject to the right ducting being in place. Unless I'm missing something?

I did follow the link and did read your post. As I said, Craig Young from Chorus has said the company won't be connecting any farm via fibre because the cost of digging the pit, splitting off the fibre etc is too high. Farmers can still access RBI copper and fixed wireless services where available but not the fibre.

The website has not been updated.

Hi there Rural Fibre.

Looking at the web page you indicate, it seems that the service being offered by Chorus is extremely limited, especially here in Golden Bay.

Chorus have done a lot of work over the past year or so, rolling out a new fibre optic cable from Motueka to Takaka, and then from Takaka out to Collingwood, all for the RBI. This involved digging in (or ploughing in) brand new cables under pavements and driveways in Takaka town, all the way along SH60, past many farms and communities on the way. There were what looked like large concrete man-hole dig in every kilometre or so. A great deal of civil engineering.

And yet, if you search for "Takaka" on the map on the page you indicate (http://www.chorus.co.nz/rural-broadband-initiative/fibre-in-rural-community/fibre-to-rural-communities-1), there are only two, very short sections where "rural communities" are shown to be able to access this RBI fibre neither of which are actually anywhere near rural communities nor farms..

I'm hoping that map is wildly inaccurate, because otherwise it would be an immense joke, right?

You can blame the government for that, the UFB build only covers 75% of the population. This was set out by the government. Therefore smaller towns miss-out.

8K video requires 48gbps uncompressed. All broadcast video is always compressed.

Using the new hevc codec (h.265) this would require somewhere in the vicinity of 200mbps - 300mbps to broadcast.

Chorus has just set the expectation that Gigatown connections will be $75-100 retail. Does this mean that Chorus thinks that current UFB plans are overpriced? There are a few in that price range, but I doubt anybody is making any money from them...

What a poor article. Poorly researched, and make illogical and incorrect conclusions.
Just as an example, let's look at the "why do we need more speed" question.
You need around 2mbit for standard def.
5-10 for HD
10-20 for 3D
Estimates are around 15mbit (minimum) for 4k.

8K still seems quite a way away at this point. But I'll humour you. 8k has 4x the number of pixels as 4k, so this should not be more than 60mbit. Either way a far cry from 48 gigabits.

Do your research sir, and stop this sensationalist nonsense.

RURAL FIBRE IS VERY DEFINITELY AVAILABLE

Paul,

Not sure which event you were at, but at TechEx in Wanganui where Craig Young talked about Rural Fibre, he discussed how rural fibre would work and where it would be available.

He put up a slide that gave an example of where rural fibre service would be available i.e. it must be where Chorus has built *new fibre* funded by RBI that can be used as *access network* (where we have built or are in the process of building GPON infrastructure). Without GPON in the local network, there is no way of delivering a service.

Not all fibre built by Chorus is access network, not all fibre bulit by Chorus is funded by RBI, so not every property passed by our fibre is eligible for RBI fibre service.

The link provides a map which indicates those properties that benefit from the access fibre laid under the RBI programme.

As the website states, an eligible property owner just needs to contact their ISP to get the ball rolling.

Perhaps a reasonable measure of uptake rate might be made by reporting the uptake rate of people migrating from dial-up to ADSL in the mid 90's to early 2000's. I expect the migration rate started as a trickle, but then as content became more bandwidth intensive people were driven to the permanently connected ADSL in droves. I think we'll see the same with UFB. Give it 2-3 years and the advent of online media delivery services in NZ that will present serious competition that breaks the monopoly of SkyTV, and the uptake rate will begin to curve dramatically upward.

The fact that the price of dead-end copper delivery is going to be forced down will cause at least a 2 year delay in that uptake, because most people will choose price over content for a while at least, assuming the ISPs pass 100% of the savings to the consumers, although that seems unlikely.

I still fail to understand why taxpayer subsidised UFB that the only case for is home entertainment (ie video on demand) is a going to lead to the great economic miracle for New Zealnd that donkey promised when he committed $1.5b of NZ'ers cash!!

How about free high definition video conferencing with rellies living on the other side of the planet? Unless they're on the other side of the planet in order to avoid seeing them at all.... ;-)

Anyway, it's not a great economic miracle, it's a replacement for a 100+ year old copper network which is becoming increasingly more expensive to maintain and run. Remember every single copper connection requires 50 volts DC all the time regardless of whether the line is being used by the customer. Fibre requires no power at all if it's not being used.

Yes you have “mangled” the figures and you clearly lack understanding of this subject:
1. Anyone with the slightest understanding of technology uptake would not expect UFB roll out and uptake to be directly correlated. Technology adoption usually forms an S curve with growth slow at first, accelerating as the masses uptake, and finally slowing. (Search Wikipedia for “technology adoption curves”.)
2. Your use of anecdote clearly leads you to overstate the luck required to obtain a fibre connection. I don’t deny that our system of property rights clearly creates pain for wanting to connect MDU’s, but Statistics NZ data shows that these represented only 6.1% of the private housing stock in 2001. Ok the data is dated and will probably be higher now, but even if its doubled, most people ordering fibre live in housing that will not encounter such difficulties. (My anecdote was that I ordered fibre and it was delivered within a week.)
3. Your roll out calculations are wildly overestimated:
a) UFB is only intended to reach 75% of New Zealanders, not the 100% in your calcs.
b) There are way less than 300k businesses needing fibre: Stats NZ data which identifies 473k business enterprises, but 326k of these have zero employees (probably shell companies and LAQC’s used by property investors so they won’t need fibre). Of the 147k remaining enterprises 97k are smaller businesses employing 1 to 5 employees. We know that many small businesses operate from home or out of vans, so the actual number of business needing fibre will be way less than the 300k you use.
4. You incorrectly assume that catering for rapid bandwidth growth requires the peak speeds of fibre products to increase, when in fact average speeds achieved across the internet have a far greater impact on overall performance.
5. You incorrectly state that UFB is currently only delivering 100Mbps. The structure of UFB offers retailers a building block model which allows them to offer increased peak and committed speeds.

Yes you have “mangled” the figures and you clearly lack understanding of this subject:
1. Anyone with the slightest understanding of technology uptake would not expect UFB roll out and uptake to be directly correlated. Technology adoption usually forms an S curve with growth slow at first, accelerating as the masses uptake, and finally slowing. (Search Wikipedia for “technology adoption curves”.)
2. Your use of anecdote clearly leads you to overstate the luck required to obtain a fibre connection. I don’t deny that our system of property rights clearly creates pain for wanting to connect MDU’s, but Statistics NZ data shows that these represented only 6.1% of the private housing stock in 2001. Ok the data is dated and will probably be higher now, but even if its doubled, most people ordering fibre live in housing that will not encounter such difficulties. (My anecdote was that I ordered fibre and it was delivered within a week.)
3. Your roll out calculations are wildly overestimated:
a) UFB is only intended to reach 75% of New Zealanders, not the 100% in your calcs.
b) There are way less than 300k businesses needing fibre: Stats NZ data which identifies 473k business enterprises, but 326k of these have zero employees (probably shell companies and LAQC’s used by property investors so they won’t need fibre). Of the 147k remaining enterprises 97k are smaller businesses employing 1 to 5 employees. We know that many small businesses operate from home or out of vans, so the actual number of business needing fibre will be way less than the 300k you use.
4. You incorrectly assume that catering for rapid bandwidth growth requires the peak speeds of fibre products to increase, when in fact average speeds achieved across the internet have a far greater impact on overall performance.
5. You incorrectly state that UFB is currently only delivering 100Mbps. The structure of UFB allows retailers to create products which operate at different peak and committed speeds, yet none so far have chosen to offer anything different from the standard templates.

I'd love to sign up the UFB today. We suffer terrible congestion on our aging ADSL1 BUBA exchange (peak time 10-15% off peak speeds), more families and business utilising the internet the way it should be has congested the service bad. But alas we can't, don't know when/if cause all layers on the Chorus map don't show where we sit.