Chris Barton: Telecoms competition has left the country

Oh competition, Competition! Wherefore art thou, Competition?

Excuse the lament, but I despair that my beloved competition has deserted the telecommunications market in New Zealand. My disillusionment stems from a Consumers Institute (www.consumer.org.nz) survey on so-called low-cost broadband that shows a dismal range of offerings costing between $30 and $45 a month.

It's dismal because most of them were barely broadband at 256Kbps, and all were limited by "download caps" - most of which were just 1GB a month.

From a consumer point of view, this is akin to having a huge concrete culvert gushing oodles of water to your home, but choking it back to a pitiful trickle through a drinking straw. And then, after you've used your 10-bucket quota, having the supply shut off completely. This utterly defeats the whole purpose of broadband, which is about delivering more, faster, not less, slower.

Ideally, broadband should be unlimited - allowing the consumer to gorge to his or her heart's content on video, animation, audio, music, graphics and photos.

But it's an ideal we seem to have given up on in New Zealand, apparently because the cost of unlimited gorging is prohibitive because of our remoteness.

Puhlease! That tyranny-of-distance argument went out with the ark, when we discovered - thanks to the phone, TV and airline travel - that the world is actually a small place. Today, with communicating bits whizzing round the globe in the blink of an eye and getting cheaper by the nanosecond, the idea that we can't have an always-flowing pipe to our homes is a crock.

It's a crock, too, that in the age of convergence, when everything is reduced to digital bits and bytes, we should be paying separately for each piece of telecommunications service. The high cost of slow broadband is bad enough, but when you add about $39 for a Telecom line rental, and about $12 a month for voice mail, call waiting and caller ID, monthly costs total about $93.

It doesn't help much if you switch from Telecom to a competing provider - you'll save about $5 a month. Which is why I'm so miffed. The sad truth is that about $87 a month is as good as it gets for a phone with few smart services plus slow, restricted broadband. Competition has left the country.

I feel particularly aggrieved because I have taken the bold - some would say foolhardy - step of cutting my Telecom line. All my telecommunications arrive and depart my home courtesy of Wired Country and ihug. It's true that the service does deliver much cheaper tolls and land-to-mobile calls, but you can get that component from others - such as WorldxChange (www.wxc.co.nz) and Callplus (www.callplus.co.nz).

It's true, too, that when I first signed up nine months ago with Wired Country-ihug I was saving about $30 a month on my fixed monthly charges. But since then Telecom has dropped the price of its broadband offerings and the difference for the bundle of services is a slight $5 a month.

Competition in action, you say - so stop complaining. Be patient and more price cuts will come. Unfortunately, no. Talk to Wired Country and ihug and you'll find neither willing to take on Telecom. There are no cheaper or faster services coming. Competition is dead in its tracks and $87 a month for a 256Kbps-broadband-plus-phone bundle is indeed as good as it gets.

The sort of price customers ought to be seeing - and a few brave pioneering types might be getting right now - is $55 a month for a smart phone and 256Kbps internet access service with a healthier 10GB cap. How? By adding Wired Country's 256Kbps service at $45 a month to iTalk's (www.italk.co.nz) broadband phone at $10 a month - a service that offers some of the best toll and land-to-mobile rates in town.

The reality of such a package is you have to be a bit of geek to make it work. And be prepared to put up with one or two glitches. But it does show the promise of cheaper converged communications. Maybe competition isn't dead, it's just hibernating.