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Mitchell is spearheading the government’s $1.5 billion Ultra Fast Broadband network, which is set to smash the business model of most New Zealand ISPs. “We have data caps in this country which the ISPs have to all customers. They make quite good margin out of that; they probably make more margin out of that than they do out of offering the underlying access on the broadband,” he says.
As ISPs don’t make the distinction between national and international bandwidth, it costs the same to send a large file from Auckland to Wellington as it does from Auckland to London. This is in part due to the dysfunctional peering system in New Zealand which means a large majority of domestic internet traffic travels via Los Angeles in order to avoid paying high national interconnection rates.
Mitchell, who was the Group General Manager Business and Wholesale at Telecom’s Australian subsidiary AAPT 2001-2003 says this construct is unique to New Zealand. “As a service provider in Australia we’d price the bandwidth significantly lower than international. A lot of traffic that should be held within New Zealand actually goes offshore and that drives cost to the end consumer, which shouldn’t actually happen.”
He says the ISPs’ business model is likely to be obsolete with the new fibre network. “We’re working with industry bodies, but at the end of the day we don’t want to replicate what the currently industry is, when deploying this new technology.”
You can find out more about what Mitchell has to say about the data caps and the industry’s response in the March edition of Telecommunications Review. In addition Mitchell discusses the role of Crown Fibre Holdings, and provides some insights into how it is likely to assess the 33 proposals from 18 respondents wishing to partner with the government in the Executive Q and A.
We also profile Labour’s ICT spokesperson Clare Curran, find out from the TCF why numbering administration needs to change and check out Chorus’s prototype hybrid cabinet which is designed to deliver fibre to the door.
This month’s indepth feature is a user’s guide to videoconferencing and the sector focus this month is hotel broadband – what it’s like running a network in the hospitality industry. In the contact centre section we look at how speech recognition may actually head off the threat of offshoring.
The March edition will be out early next week, if you wish to subscribe now hit this link.
