High-speed chase for customers

By PAUL BRISLEN

The world of high-speed internet access is to become more competitive next week when a group of internet providers starts new deals aimed at luring users away from Telecom.

But what's in it for the users? Will there be huge variation and a good range of choices in broadband or will each provider merely offer variations on what Telecom's pitching?

To some degree, each provider is limited in what it can provide.

That is because the new services from ihug, Maxnet and Orcon are based on a "wholesale broadband" service Telecom has been forced by regulation to provide.

Problem One is that the download speed of the regulated service is set at 256kbps (kilobits per second) and the upload speed is limited to half that, 128kbps.

Telecom's Jetstream services are already giving those speeds to thousands of New Zealanders.

Problem Two is that Telecom's competitors cannot change those speeds, so don't expect to see faster products until next year when Telecom will begin wholesaling a wider range of services.

Telecom's existing JetStream Surf plans are a useful benchmark for the new services.

JetStream Surf 1GB (gigabyte) costs $49.95 a month with a $10 a month discount for users who make toll calls through Telecom as well. The JetStream Surf Flat-rate plan, with a 10GB download cap, sells for $79.95.

Auckland internet provider Orcon was first out of the blocks with a flat rate service, meaning no download limits.

Telecom has imposed a 10 gigabyte a user download limit each month.

Strictly speaking, individuals can exceed the 10GB limit, but overall all users collectively must average less than 10GB of traffic a month. Orcon will continue to offer a no-limits service. Its boss, Seeby Woodhouse, said he was unhappy about the 10GB limit but would work with it.

"We'd like to be able to offer streaming media, like internet radio or video, but with a limit like that it's not an option," he said.

As the typical Orcon user sends and receives only around 3GB of data, Woodhouse said most users would still be able to treat their connection as unlimited without too much concern.

But users listening to internet radio in the background could run afoul of the limit.

Orcon Flat Rate costs $59.95 a month.

Maxnet is another provider that will offer a flat-rate plan in conjunction with its policy of being family-friendly.

Maxnet managing director Brett Herkt hopes to have more filtering and security options for customers who use the broadband service.

Because of the high level of security concerns in the community about issues such as viruses, spyware and pornography, Maxnet's approach is to offer parents and community groups, including churches and schools, a managed internet connection.

Consequently, Maxnet reserves the right to restrict bandwidth for users of file sharing software such as Napster or KaZaA, and filters websites based on categories such as "anarchy", "drugs" and "hate and discrimination".

MaxSurf 256, costs $54.95 a month, and an extra $9.95 a month for the Net Guardian service. Users who pay by direct debit receive a discount of $5 a month.

Slingshot has gone for a more traditional cap with extra usage charges, although at a low rate.

Slingshot's JetBuster Express plans offer 2GB of traffic for $39.95 a month, and 5GB for $49.95 a month.

Excess use is charged at half a cent a megabyte, against Telecom's 5 cents per megabyte.

Slingshot also has a flat-rate plan for $59.95 a month.

Ihug, now owned by Australian internet provider iiNet, has adopted its on peak/off peak approach to providing broadband.

Ihug's "bliink" plans have a peak time from 8am to midnight, and an off-peak period from midnight until 8am.

This means that if you want to download a large amount of traffic, say a new operating system or a software upgrade, you're better off using your off-peak traffic allowance so as not to eat into your day allowance.

It's an interesting approach to managing demand on a network and should mean ihug customers aren't all affected by heavy users during peak hours.

Ihug has two Bliink plans for residential customers. bliink 256 costs $59.95 and includes 10GB of peak and 10GB of off-peak traffic. bliink lite at $49.95 a month gives 1GB of peak and 1 GB of off-peak traffic.

Users who exceed their traffic limit could potentially find their connection speed cut to 64kbps, although Telecom's problems introducing the service mean this may not happen until the full UBS service becomes operational.

Telecom's wholesale service includes a fish hook in the form of a $100 fee for changing provider.

If a customer moves from one wholesale provider to another, the new provider must pay the original provider the fee.

Telecom's aim is to stop providers targeting each other's customers and go after new customers instead.

Providers have expressed concern at the charge, and seem likely to pass it on to customers.

All the providers are busy signing up users before the service starts so as to minimise the risk of upsetting customers with the fee.

Telecom has to have 250,000 residential broadband users by the end of next year or face the possibility of the Government looking again at opening its copper-line network to competitors. This "unbundling" would give Telecom's competitors direct access to Telecom's network to install their own equipment.

In Australia, Optus is finalising plans to install its own equipment on Telstra's network to offer a new grade of service to users.