Cable blocks fast internet access

By RICHARD WOOD

New residential subdivisions are missing out on high-speed internet services - ironically because of Telecom's use of high-speed fibre-optic cabling.

An Auckland developer told the Herald he lost a property deal because Telecom's asymmetric digital subscriber line (ADSL) Jetstream service was not available in his subdivision on the Hibiscus Coast.

Lloyd Barker, project manager of Cabra Holdings, says up to 10 per cent of sales inquiries at The Grange in Orewa have included questions about ADSL.

"It seems to be ludicrous that you've got the modern fibre technology into your subdivision but they can't provide the latest technology in terms of Jetstream," said Barker.

"If we were just on copper they could have put Jetstream in."

Telecom is installing fibre-optic infrastructure in new housing developments but ADSL services, such as its own Jetstart and Jetstream, do not run over fibre cable.

The telco is nevertheless reluctant to install ADSL equipment within Barker's subdivision to overcome the problem.

Barker said Telecom asked Cabra either to produce 25 to 30 definite customers or front up with money itself if it wanted ADSL connectivity.

"They said, 'It's going to cost $10,000. If you want to pay for it we'll put it in'.

"We're in the business of selling land, not funding infrastructure services for Telecom," Barker said.

Telecom chief technical officer Murray Milner told the Herald that Telecom did not put ADSL boxes into subdivisions.

He said the existing technology was not compact enough, used too much power and had not been thoroughly tested for maintenance requirements when in streetside cabinets. But it was a "short term aberration" and Telecom was testing three units in Auckland.

Asked about the $10,000 price, Milner said for that figure Telecom might well have been willing to put in a cabinet as part of its trial. He described asking for such funds as "demand risk mitigation", meaning it lowers the risk for Telecom.

Asked if developers in that situation would get their money back if the service was successful, Milner said developers should look to recoup their money in what they charge for the properties.

"We deploy where we believe we are going to get sufficient demand to cover the fixed cost."

Milner said Telecom typically required business from 30 regular users to justify installing ADSL equipment and this could be hard to achieve in a subdivision.

"Where you might put a box at the exchange and have access to 10,000 customers, when you put it in the cabinet you only get access to three or four hundred customers so the whole demand economic equation is not the same."

He said Telecom was looking for alternatives in fibre subdivisions such as fibre all the way to the home, but it was not yet cost-effective.

David Diprose of internet provider ihug said there was no problem in putting ADSL boxes in subdivisions. "That is standard technology. There is nothing abnormal about that at all and Telecom could easily choose to do that anywhere."

Diprose said the issue was economic - if it was the right decision to install fibre then the decision to install ADSL should be closely related.

"Also, you have to remember that they would have saved a lot of money by putting the fibre that far because these days fibre is a lot less cost than copper".

Barker said he thought the fibre was used for speed reasons and was unaware it cost less than fibre.

"If their model has such strict criteria that nobody can comply," he said, "then it is probably a bit of a stupid model."