Chorus cabinet roll-out "a dry run for UFB"

Everyone has long-assumed that Telecom’s “non-compliant” bid for the government’s $1.5 billion ultrafast broadband (UFB) project involves its Chorus division taking charge of a nationwide fibre network.

At the CommsDay NZ Summit in Auckland on Tuesday, Chorus boss* Mark Ratcliffe publicly confirmed the suspicion for the first time, stating that Telecom is making a nationwide bid, and that he hopes Chorus will be at the UFB helm.

Cabinets: a "dry run for UFB"
Tellingly, Mr Ratcliffe called Chorus’ half-way complete $1.4 billion fibre-to-the-node project, which has so far seen roadside cabinets bring fibre to 1800 neighbourhoods a “dry run for UFB”.

With its union trouble safely behind it, Chorus also began a series of TV ads this week, featuring plucky engineers racing between Telecom service calls.

The subtext is that the Telecom has the chops for Crown fibre - though one has to wonder what the general public, unfamiliar with the arcanities of operational separation and the UFB process, makes of it all. Certainly, it lacks the blunt message of Vector’s “short straw” ads.

Another take: the ads could be boosting Chorus' profile ahead of a possible sale (as the price of Crown fibre entry). But it remains to be seen whether Telecom will want to let go of its most profitable division - even if it could offload a load of debt in the process, in the same manner that TVNZ dumped on Kordia as it was spin-off.

Springboard for VDSL
The roadside fibre cabinets popping up around urban New Zealand (which will number 3600 by the end of next year) will serve as a springboard for faster copper services, Mr Ratcliffe said.

Although the cabinets support fibre-to-the-home, Chorus sees VDSL copper connections as the prime attraction for internet junkies.

Speaking at the same event, Telecommunications Commissioner Ross Paterson said VDSL connections would initially be accessible to around 15% of broadband customers when Telecom Wholesale first offers the service around August, rising to 60% next year.

The first wave of customers who take VDSL accounts can expect a minimum guaranteed speed of 15Mbit/s for downloads and 5Mbit/s for uploads, Dr Paterson said.

In the near future, speeds of 40Mbit/s are likely, the commissioner told the conference.

People will have to be 2km or closer to their nearest phone exchange or cabinet to feel the full VDSL2 effect because - like ADSL2+ and other copper line technologies, but unlike fibre - VDSL2 bandwidth degrades rapidly with distance.

Market to decide price
The Commerce Commission has left Telecom Wholesale free to charge a market price for VDSL2, said Dr Paterson, as long as it offers a “premium service”, rather than hawking VDSL2’s raw speed boost alone, and offers the same terms to all ISPs.

It will be interesting to see what price the market will stand, the commissioner said - an extra $20 a month on your broadband bill has previously been bandied about by Telecom.

Hmmn - what's a "premium service"?
But Keallhauled is confused. If VDSL2’s speed is not enough (and it’s not, the Telecommunications Act says all forms of DSL must be priced the same), then what constitutes a “premium service”.

Could it be a bundled TV service?, Keallhauled inquired of the commissioner.

Dr Paterson would only say that it was up to Telecom to propose premium services.

The commission would then decide if they were valid. So far, Telecom is yet to put any before the watchdog.

* Technically, Mr Ratcliffe is not Chorus chief executive at present as he has stepped aside to focus exclusively on Telecom's Crown fibre bid.