The building of new infrastructure across the country and an imminent move to challenge Telecom’s control of the cable between the exchange and homes and businesses is expected to create a much more competitive environment for fast internet services.

A key catalyst for closing the gap between fast internet ‘haves and have nots’ is local loop unbundling (LLU), giving Telecom’s competitors access to the last mile of copper network and exchanges from about mid-2004.

That’ll open the way for TelstraClear and others to create their own digital subscriber line (DSL) offerings – a service Telecom has had to itself for five years. It has been estimated unbundling could bring savings of up to $67.5 million to users – not including Auckland and Wellington metropolitan areas where competition is allegedly alive and well.

Unbundling key to future

The Telecommunications Commissioner’s has recommended unbundling go ahead but that’ll depend on a final report, taking into account public submissions, which will be handed to government by December 20.

Telecom remains unhappy about the proposed sharing arrangement saying it removes any incentive for it to make continued investment in its infrastructure and broadband products or further lower pricing.

Currently the most widespread high-speed service is Telecom’s Jetstream digital subscriber line (DSL) available to 83 per cent of the country, giving users an always-on internet connection and phone service on the same copper cable. Bandwidth can be shared through the modem/hub, to 10/100Mbit/sec Ethernet cards in other computers or via a wireless network set-up.

Speeds from 2- 8Mbit/sec are available through the fully-fledged service or at the low end between 128-256kbit/sec for between $40-$80 per month depending on speed and use. Other carriers and internet service providers are reselling Telecoms service which they purchase at wholesale rates but most say the margin’s aren’t enough for them.

Definition questioned

Telecom’s goal is not ambitious – it wants 100,000 broadband connections by the end of 2004, and already claims 50,000 residential connections. However it’s alleged only 13,000 of those are using 2Mbit/sec plus connection.

According to international experts broadband is any reliable connection able to deliver real time video, defined as 2Mbit/sec and beyond. Anything below that benchmark might be considered narrowband. That’s had critics claiming Telecom’s 128-256kbit/sec customers don’t actually qualify, placing us even further behind the rest of the OECD line up - last count we rated 21^st out of 28 OECD nations in broadband uptake.

Meanwhile the government-led Project Probe is also putting the pressure on carriers to deliver a higher speed, better quality service to 14 outlying regions. Consortiums of wireless and wired carriers were given the change to bid for the business. The plan is not only to bring broadband to schools but open the way for entire communities get a better deal on bandwidth.

Probe has served as an adrenaline shot for some regions who’ve had to put up with less than acceptable dial up internet access. Within a year most will have between 256kbit/sec and 1Mbit/sec services enabling high-speed web surfing.

Smart new services

It’ll also open the way for the use of specialised services including interactive learning, video conferencing, moving X-rays between health services and more rapid access to essential market information for the farming community.

All up about $100 million in state funding will subsidise the building of additional infrastructure to ensure remote areas get an equivalent broadband service to their city cousins before the end of 2004.

Previously the only alternative to Telecom’s DSL has been ihug’s Ultra satellite-based service which delivers 128kbit/sec – 1Mbit/sec speeds (with a data cap) for $35-$45 a month or its 1Mbit/sec flat rate account at $60 a month.

However access to fast internet is now rapidly changing with power companies and others including state-owned Broadcast Communications (BCL) and Whoosh Wireless (formerly Walker Wireless) responding to the need for speed.

BCL is offering subscribers a two-way wireless broadband service, which it claims can reach at least 90,000 households and businesses. Its partners Telecom, Ihug and Iconz will initially offer 256 or 512 kbit/sec downloads, with a return path of 128kbit/sec within 50 kms of a base station.

BCL’s solution is based on a fixed wireless antennae attached to a building and can deliver traditional voice, IP telephony and video-conferencing using technology from Airspan.

Wireless broadband

In conjunction with Telecom, BCL has won a number of the Probe contracts and will also deliver high-speed connections to 90-95 per cent of dairy farmers as part of Fonterra’s project to get closer to its customers.

Meanwhile Whoosh claims it’s high-speed wideband CDMA network will service 70 per cent of Auckland within by January, and its looking to extend into other regions. It too has several Project Probe contracts in conjunction with Vodafone. Rural customers with entry level 128kbit/sec data rate get two telephone lines, regional toll free dialling, flat rate national calls for $80-$90 a month compared with the $195-$200 they previously paid for one telephone line, an internet connection and toll calls.

Whoosh technology lets the user roam and hand off between cellsites using a wireless modem. In Auckland Whoosh offers 250kbit/sec two-way connections for $65 per month and 500kbps two-way connections for $404 per month. Telephony is currently being trialled.

As compression techniques improves and technology companies deliver smarter more attractive interactive services the demand for broadband will grow exponentially.

Games need speed

Telecom’s technology partner Alcatel, a major player in the DSL modem market, has high hopes of making video delivery over copper lines a reality here. That will really test the mettle of what is considered broadband. It’s likely 2Mbit/sec, will remain entry level for most serious users.

In fact the games industry already says that’s the bare minimum for the generation of on-line gaming now being delivered on PlayStation 2 and X-Box machines. Increasingly multiplayer on-line experience that will not operate with traditional dial up bandwidths – in fact even 128kbit/sec is considered minimal for some of the new games says Microsoft games marketing manager Bob Glancy.