It might be a slave to regulators, and working at the behest of rivals as much its parent company. But Telecom’s Chorus division is turning out to be a model broadband citizen, with its roadside cabinet project bringing fibre to an increasing number of streets.

To quickly recap, the previous government organisationally separated Telecom, from March 2008, into three divisions: Chorus, in charge of building and maintaining network infrastructure; the less excitingly-named Telecom Wholesale, which sells access to said network, and Telecom Retail, responsible for everything else.

A key concept behind organisational separation is that Chorus and Telecom Wholesale serve all internet service providers on an equal footing. Telecom Broadband (formerly Xtra), should be just another customer, with no special pricing, or other privileges.

Chorus has acquitted itself well from the get-go, helping Orcon, TelstraClear and Vodafone move their own DSL gear into most Auckland exchanges by the end of last year, as required by local loop bundling legislation. It’s now beginning to open the doors to Telecom exchanges in Wellington (where Telecom Broadband rival Actrix has already moved in).

The division’s staff have also gone beyond the promotional and partying cause of duty. One of most surreal sights of the new, unbundled era, and one of the most emblematic, was Chorus staff donning Vodafone shirts for drinks to celebrate the launch of the rival telco’s RED network (Vodafone’s name for its unbundled DSL service).

Worse (from a Telecom shareholder's point of view), Chorus’s work has help Vodafone set itself up as a wholesale provider of DSL service, too. This is a radical change. CallPlus, for example – one of our five largest ISPs – is now buying some of its wholesale broadband from Vodafone. Previously, Telecom was the only game in town.

Now comes the sexier bit.

Chorus has started to deploy 3600 roadside cabinets as part of its Telecommunications Act-mandated mission to bring 10Mbit/sec to 20Mbit/s broadband connections to 80% of New Zealanders by 2011 (the green slodge in the above graphic is a cabinet; the tall thing a telephone exchange; how happier life would be - at least for the broadband nut - if they were that tall in real-life. The blue stripy bit is fibre, the thin red bits copper).

The idea is that it’s all very well for Telecom (and Orcon and Vodafone) to install flash new ADSL2+ and VDSL gear in unbundled phone exchanges, but if the cable running from the exchange to people’s homes is lousy, then most of the effect is lost.

Each roadside cabinet extends the reach of fibre optic cable from the exchange to within at least 2km o your house, minimising the distance a packet of broadband data has to travel over older, slower copper cable, or so-called “legacy” (older, bodgier) fibre.

So far, 500 cabinets have been constructed.

INSIDE A WHISPER CABINET: The top half of the D-Slam area (left-side of the cabinet) is taken by Telecom Wholesale hardware, creating a wholesale feed for any ISP that wants to buy it. The bottom half - is it half? You be the judge - is left vacant for ISPs to install their own ADSL2+, VDSL2 or G/Pon (fibre-to-the-home connection) hardware.

Some fascinating cabinet facts: built by robotic gear imported from our friends in China, the cabinets are made in Christchurch by a company called Eaton Power Quality. Each weighs 240kg, and is anchored with 2 tonnes of concrete. To protect the Alcatel-Lucent gear inside each $145,000 cabinet from thieves, citizens with broadband rage or the weather, each is made from marine grade aluminium – Chorus now accounts for more than half that material sold in New Zealand.

The marine cladding also deadens the hum of the cabinets (which is why they’re called Whisper Cabinets in Chorus’s official guff).

Each cabinet also has its own power supply, plus a plug for a generator. Chorus says these features are necessary precautions against a power companies and power line operators who oversaw “8000” outages last year (a Chorus rep remained straight-faced when I asked if this was a dig at Vector, and other lines companies who are mooted as potential alternatives to Telecom Chorus to lay cable for the government’s proposed fibre to the home network).

Of the 500 cabinets built 303 have been deployed to date, bang on the schedule dictated by the act, and enforced by the Commerce Commission. Have of Chorus’s 210 staff are dedicated to the project.

Early reviews are good: one user I spoke to said he was clocking download speeds of up to 24Mbit/s.

Chorus itself is aiming for an average speed of 13Mbit/s to 15Mbit/s, and says it’s achieving that. Variables include your homes distance from the nearest cabinet, the quality of your street’s copper cabling, whether you’ve got an up-to-date PC and modem and, particularly, the state of your house’s phone wiring.

In political terms, things are also running smoothly. After Chorus finishes installing each cabinet, Telecom Wholesale installs a D-SLAM, then approaches local customers to let them know they can upgrade to a faster plan – and not just Telecom Broadband customers, but Orcon, Vodafone or any ISP service in the area by Telecom Wholesale.

For each house, the upgrade process takes just minutes, and merely involves tweaking a jumper at the cabinet. That’s thanks to the cabinets being brand new, and well-designed. By contrast, enabling a new broadband connection at one of Telecom’s tangled exchanges can, famously, take days or weeks.

Around half of each cabinet is also empty, ready for rival ISPs to install their own D-SLAMs if they want to bypass Telecom Wholesale (one hitch, there’s only room for three ISPs to install their gear in each cabinet. So if all the major ISPs decided to install their own gear in each cabinet, some would be guaranteed to miss out, and have no choice but to take a feed from Telecom Wholesale. Telecommunications Commissioner Ross Patterson – currently on leave – told NBR the relatively modest size of each cabinet can be explained by restrictions imposed by the Resource Management Act restrictions rather than any cunning plan by Chorus. The Commerce Commission is due to formally release its verdict on this so-called “sub-loop bundling” controversy during March. Another key element will be how much Telecom Wholesale is allowed to charge for access).

When Telecom Wholesale upgrades all cabinets to faster VDSL2 D-SLAMs as scheduled later this year, again the upgrade will be available to customers of all ISPs – or, alternatively the ISPs could move their own VDSL2 gear in.

And each cabinet is also equipped to take a G/Pon card – that is, fibre-to-the-home connection. Again, anybody should be able to install a G/Pon card: Telecom Wholesale, another ISP, or a power line company. Chorus says it will happily work with any of them.

So, by all appearances Chorus is executing perfectly, and on time.

That’s good news for broadband users, but less palatable for Telecom, whose earnings this year, and next, will be heavily weighed down by the $1.4 billion it’s mandated to spend on the cabinet project.

Cruelly (for Telecom shareholders) the better Chorus and Telecom Wholesale do their job, the more market share Telecom Broadband stands to lose (and indeed, in the Commerce Commission’s latest stats record a fall in Telecom’s retail DSL market share from 76% in June 2006 to 66% in September 2008).

If you’re curious when a roadside cabinet is coming to your street or neighbourhood, a detailed schedule is regularly updated on Chorus’s website.