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UPDATED: Data caps are evil and must be destroyed

[Guest contributor Paul Brislen is chief executive of the Telecommunications Users Association (Tuanz), a consumer advocate group representing large telecommunications customers. He spent the past two days at the Commerce Commission's Future Broadband conference in Auckland, the first day of which was overshadowed by Stephen Fry's Twitter volleys at NZ's internet limits.

A recent StatisticsNZ survey of internet service providers found that data caps have been rising - and a good thing too, given (street-legal) movie download services like iTunes, and the likes of Dropbox business file sharing and videoconferencing make it easy to chew through 3GB a day. Yet 99% of New Zealand ISP accounts are still subject to monthly data caps, by StatisticsNZ's count. Overseas, all-you-can-eat plans are the norm  - Chris Keall]

UPDATE: The latest OECD data has been released. It shows 13 countries with data caps, not four as it was in previously. [Arrgh, it reflects the trend in the mobile data market, where other countries are joining New Zealand's long-time practice of capping data as smartphone usage explodes - CK].

Either way, we are one of only a handful of countries that has data caps and I don't know of any others that have only one ISP (CallPlus/Slingshot) offering an unlimited plan.

So is New Zealand’s broadband “third world”? Are we no better off than nations just emerging from civil war or with famine sweeping the country?

No, of course not. Our broadband as it stands today is middling – we sit in with the bulk of OECD nations and in some instances we are in the “aspirational” quadrant, according to Cisco’s Robert Pepper, who showed us some astonishing numbers at this week’s Commerce Commission conference on the future of broadband.

However, we suffer from incredibly low data caps and as one of only a handful of countries to enforce such things (alongside those broadband giants, Canada, Australia and Iceland) we end up hiding the true cost of our monthly broadband plans.

Partly this is because of the way the ISPs structure their businesses and the way they buy bandwidth, but partly it’s because of the Commerce Commission itself, which doesn’t let the ISPs sell services based on speed they can’t guarantee. And because most of our broadband is DSL, and DSL gets slower the further you are from cabinet or exchange, there’s no way an ISP can put its hand on its corporate heart and say “You’re going to get a 10Mbit/s service” . So they differentiate on data limits instead.

We’ve had unlimited data plans in the past, and CallPlus/Slingshot has one in the market today, but internationally the experience hasn’t been great for many users. Throttling, soft caps that aren’t well defined, unexpected speed decreases, packet loss, shaping, excessive contention – all these and more are brought to bear on the customer, all under the guise of ensuring quality of service for customers.

As we move to the UFB world where we’re all on fibre that’s going to change. The UFB prices are set and sold on the basis of speed – 30Mbit/s down and 10Mbit/s up, 50/50 and 100/50 and so on. These speeds are set, but of course they’re only part of the equation – there’s contention. There’s international capacity. There’s national backhaul. These factors will need to be spelled out clearly and cleanly for customers – and yes, we’ll have to train our customers to talk about contention and committed information rates and all the rest – otherwise customers will be mislead as to what they’re buying.

And as we move to that fibre world we need to drop these ridiculously low caps. 5GB a month is hopeless, 10GB barely any better. Remember, these days it’s not one user per household but all users per household who are online. My house is online even when we’re not around – downloading patches and updates for a plethora of devices. When I first got broadband in 1999 I had a monthly limit of 600MB (that’s right, megabytes) of data and I stuck to it, even while I was working from home. Today I have a 120GB plan (oddly for a similar amount of spend) and we occasionally hit the ceiling. I blame Club Penguin – those Puffles must be quite the bandwidth hog – but this is the way of the future . More data at faster speeds. 100GB won’t cut it next year for us and when the UFB arrives I imagine we as a household will be looking for a lot more.

Data caps as an issue needs to be sorted out now, before we start promising an exciting new world of speed that we can’t sustain. The good news is that the UFB will be truly world class and we’ll be ahead of countries like the UK and the rest of Europe as they struggle to deliver 30Mbit/s. We need to make sure there is no bad news to go with that.

More by Paul Brislen

Comments and questions

Telecom must hold the NZ record for the biggest pack of thickos this side of the black stump. Gave me both Go Large & Big time and neither of which did our household abuse. Always had in the back of mind that there was a "fair use" policy but never having to worry about surprise charges or throttling back to less than stone age service was peace of mind. Then some idiot decides both times to mess with a good thing and put us at war. Telecom became the focus whereby I was acutely aware of what all my kiwi mates were getting all over the planet and what I experienced in my many international work trips. Telecom is an odious company ridden with deceit and spin, a corporate bully that deserves to be held to account. Why stick with them?, simply because they manipulate and control all the others anyway. What a farce.

Telecom has to desist in paying endless homage to Theresa Gattung. Forthwith!!!

Would be nice to get back the $30-mil we pissed away on her incompetence and deceit.....from her own mouth....too.

I would love to see a competitive landscape where I could sign up for a CIR of (let's say) 20 Mb/s. Whether that was upstream or downstream or whether I filled the pipe 24/7 or not would be immaterial.

Canada does have uncapped plans available & the Govt. is against the idea of capping.

They aren't Gorons (rhymes with...) either. So they won't be paying those great 'environmentalists', the Harvard Pension Fund, $300-mil (sick) from their ETS....oh, they aren't stupid enough to do that either.
What a price we pay for good climate.

Absolutely in full agreement!
Recently returned from Italy - we had Unlimited Mobile Broadband for 10 Euros a month. Back in NZ it cost me $50 for 2Gb which I can easily use in a day! Telecom's monopoly is holding back New Zealand!

Yes but subsequently we found Italians & Greeks, Irish & Portuguese had services that they could not afford hence they are all borrowing from the Germans!

Just a correction - someone's pointed out the newest figures from the OECD (released in December) have 13 countries capping data, not just four.

The full survey can be found at:,3746,en_2649_34225_38690102_1_1_1_1,00.html

Either way, it's very unusual to have only one unlimited plan on offer in the country and I would say NZ is alone in that regard. Happy to be corrected though.



Good point Paul
Of those countries that have caps they are invariably super cheap budget plans and mainly used to attract the old granny that goes on for a few minutes to check email etc. Gotta watch the telco pr spinners trying to paint apples orange.

Whether other countries have data capping is not the issue. The fact is in NZ we are paying premium prices for middling service with pathetic data caps and all because Telecom have been allowed to rape the NZ public for far too long. Shame!

Gattung! Gattung! This is a message from Telecom. Piss off and pay up .. or else!

I wonder what Telstraclear is doing after trialling the unlimited broadband over a weekend.

Canada is not such a good example and only a couple of weeks back the Vancouver Sun published reference to a report that claims the OECD figures as wrong. The earlier poster is quite correct insofar as their govt takes a dim view of any telco trying to manipulate or cap the IT user base.

Who said we are not Third World.

I have been living in NZ for 9 years now and I have never signed up for the telecom land line number purely because of ridiculously high price for the service and + cost of internet plan! was a little relieved once naked DSL came about but that is also stupidly expensive!!! Internet in Russian province, for example, is UNLIMITED and costs $30 NZD per month and the speed is DSL speed! Natural or unnatural monopolies do shape the market. it is obvious.

I have been living in NZ for 9 years now and I have never signed up for the telecom land line number purely because of ridiculously high price for the service and + cost of internet plan! was a little relieved once naked DSL came about but that is also stupidly expensive!!! Internet in Russian province, for example, is UNLIMITED and costs $30 NZD per month and the speed is DSL speed! Natural or unnatural monopolies do shape the market. it is obvious.

telecom you bunch of pirates! You better act this time cause last time the Govt caught you with fingers in the till they broke up the company - the Govt will act if you dont and I hope you get what you deserve!

Time for the Commerce Commission to take proper definate action against monopolies such as Telecom and Sky TV who are abusing their position, ripping us off so they can pay themselves obscene salaries and bonuses, and holding back the economic advance of New Zealand.

Lets just hope that UFB eventuates nationally and that we all have quality affordable access to it as it will increase our GDP. I've been holding my breath for a long time.
Then lets talk about mobile data. How are we going to be able to enjoy Spotify, Location Based applications, social media and all the other things we will take for granted in 10 years time at the prices we are paying today.
How can Kiwi developers and entrepreneurs develop and test solutions in a market where people can't afford to use their apps because of the mobile data costs? I have an answer to this, but I don't like it: They go overseas and develop there centers of excellence elsewhere and come back to see their friends and families every year or two.

im waiting for the new pasific line to kick in and only then will i buy broardband the rest of the country should do the same or at least get away from the big robbing teleco/s

So is charging for news content

Ach-gattung! Ach-gattung! Don't mention the war !

@Breslin ... $30m? ... take the sale price of the old Telecom then substract the many billions in profit offshored since then and we are talking world class corruption. NZ was, is and will be taken for a ride by fancy boys dressed up as free marketeers.

Not sure where this tirade against Telecom is coming from. If you don't like them - go somewhere else. Simple. That's what competition and choice are all about.

I 100% agree - NZ's datacaps are a joke.

120gb? pssht. The average netflix user in the US uses 1Tb per month. If you used that much here you'd be looking at something like a $2000 per month bill! Not that our connections are really fast enough for netflix anyway.

The biggest problem is that companies are already overlooking NZ for products and services purely because of our internet, and NZ tech startups are going overseas because of exactly that problem.

Fibre may be great and all, but it's still years off and plenty of damage has already been done. The government and incumbents are very, very late to the party.

the 1TB claimhas been thoroughly refuted too. The average netflix user in reality uses 40GB of data per month - well within datacaps in NZ which go up to 100GB or more for all the main providers

To use 1TB of data on netflix would require 16 hours PER DAY of watching HD streaming content, possible for a few extremesmaybe,but not the average. no way.
Nobody who understood the internet even slightly would ever believe that number as it is so ludicrous.

I think this argument is moot. There is no such thing as a free lunch. Everyone wants free unlimited internet.. Well not everyone does, only about an average of 5% of a ISPs customer base actually need over and above their cap... So the question is should the 95% of customers be subsiding the 5% who want high speed internet, but aren't prepaired to pay for it. And in regards to NetFlix or similar services, yes customers use that much but most often they are zero-rated as they have local content servers within the ISPs Datacenter. Much like TelstraClear currently do with Steam and other ISPs have zero-rated data too.

How to solve this problem, live in a country with more than 4 mil people in a size greater than the UK.

There is no issue with the data speed here in NZ as you can get blindling fast internet, it's all up to where you live, and how much you want to pay for it.

User Pays.. Who's ever talked about that?

Spoken like a man with a vested interest.

If water was unlimited thr would be no reason to turn off the tap. Limits to some degree are good to discourage wastage.

[Arrgh, it reflects the trend in the mobile data market, where other countries are joining New Zealand's long-time practice of capping data as smartphone usage explodes - CK].

nothing to do with mobile market since the OECD data is referring only to fixed line data caps

13 out of 33 countries have datacaps - nearly 50%

You are only telling half the story. 12 of the 13 countries you say have caps have a plethora of uncapped plans all much cheaper than anything the poor kiwi can get.
Its a total fib to say the worlds going back to caps and I have to ask who and why some like to perpetuate the lie.

No, they don't read the OCED data. 4 countries have no unlimited plans at all, not 1, but actually that is out of date because NZ does have at least one unlimited plan.
Furthermore, many of the countries who were listed as having only unlimited plans now have them.
To claim otherwise is to run in the face of facts clearly presented in the report, so it makes me wonder who YOU are when you are either lying or ignorant.

I don't get why everyone says it is all Telecoms fault when there are many compeditors. Boring really when arguements so lack substance! One of the other ISPs (or more than one) need to come up with a cheaper plan and create competition - I dare you.

Well after Labour announced they were going to intervene in and meddle with the telcoms market all investment decisions and planning went on hold .... FOR 5 YEARS!

Thanks for nothing David Cunliffe and you incompetent predecessor who i can't be bothered to remember.

Saying that, National has been only marginally quicker and we are probably now 8-10 years behind by my reckoning ... just cut it loose and get the free-for-all from the 90's going again that was clearly delivering ....

Paying for a service is fine but what I object to most is the overage charges and the fact that Telstra Clear do not send warnings until 80% of your data allowance has been reached - by which time of course it is too late - especially kids watching youtube files and having long video skype calls.
Sure there are usage meters but personal monitoring is not practical over, say, a weekend. My children are now well aware of it having used 20+Gb in a day previously.
Why can't notifications be based on average daily usage?
For example, operating a 60Gb plan approximates to 2 Gb per day. Notifications could be based on how far through the month you are relative to your plan. i.e if at day 15 and only used 10 Gb then using 5 Gb in a day wouldn't prompt a warning but being at day 2 would. At least you could then be the gate at the top of the cliff instead of the ambulance at the bottom and paying the telco through the nose for the privilege.

Telstra are filthy like this. They overcharged me once, where I could document how much data I had actually used (info found inside router) when I sent them a screenshot they conveniently decided to stop replying to my emails.