Telecom pays after speed shortfall

Telecom will pay out hundreds of thousands of dollars of compensation to its wholesale customers after a study on the state of its network showed that 23 per cent of its broadband wholesale and retail customers are not achieving the maximum promised download speed.

Telecom commissioned Alcatel to conduct the study of its broadband network to get a better picture of its line capability as it opened up its network to wholesale customers under the Government's new regulatory regime.

At the start of April, many retail and wholesale customers were upgraded to 2 megabits a second and 3.5 megabits per second from 256 kbps at no cost but have not been able to achieve the maximum speeds.

"Most of the speeds are only slightly below the maximum speeds, and we are developing a spectrum management plan with the industry to address these problems," said Telecom spokesman John Goulter.

Telecom is providing its wholesale customers with lists of end users unable to achieve peak speeds and have offered compensation to competitors.

Competitors, including Orcon and Callplus, said they were pleased that Telecom had provided the credit.

In October, Telecom will move to deliver plans of unconstrained speeds - faster than the 2 megabits per second and 3.5 megabits per second plan.

But instead of marketing according to specific maximum line rates, it would deliver whatever the network was capable of delivering at that time, Telecom said.

Telecom has also offered options to its retail customers to move to the best plan their line is capable of achieving at no extra cost.

The company intended to establish a line checker in October giving customers the ability to see what peak speeds their lines were capable of delivering.

Telecom estimated that speeds would vary between households so that 4 per cent would achieve speeds between 8-10 megabits per second, 51 per cent would get speeds of 6-8 megabits per second, 20 per cent would get speeds between 4-6 megabits per second, and 16 per cent would achieve speeds between 2-4 megabits per second.

Telecom said to achieve the unconstrained speeds, it would invest in network upgrades-shorter copper loops through placing equipment in street cabinets rather than telephone exchanges, and would target Auckland, Hamilton, Wellington, Christchurch and Dunedin first.

The problems were occurring because of copper loop performance, modem behaviour, external noise services, and concentration of ADSL services within a cable binder.

Telecom would continue to provide quarterly updates on its website on the performance of its network and its future plans.

The study also found that the introduction of unconstrained ADSL lines would affect the performance of some DSL services. The report says further investigation is required to understand the nature of those cross-impacts within Telecom's copper loop network and the effects on business services.