This map evaluates how New Zealand meets the ITU’s broadband affordability target. Addresses on the map are shaded from green to red in 1% steps. The darkest green dots show addresses where a median income household would pay up to 1% of their income for broadband. Red dots show addresses where a median income household would pay 5% or more. Hovering over a dot will indicate what broadband products are available at that address.

A  paper on broadband affordability is available from Telco2 discussing the methodology and providing summary results.

Electromagnetic radiation, which can be invisible like radio waves, visible like light, or felt like infrared heat, is subject to a law of physics called inverse-square. The quantity or intensity of any radiation is inversely proportional to the square of the distance from its source. The diagram below illustrates this principle.

Just like when sitting around a fire, the closer a person is to the source of some radiation, the more exposure they will receive. The further away, the less exposure.

Levels of radiation from devices as absorbed by the body are measured with a standard called the “Specific Absorption Rate”, or SAR, which is a calculation of the energy absorbed by a person in watts per kilogram. In New Zealand, NZS 2772.1:1999 regulates a maximum permitted exposure of 2W/kg. (updated link 5 Jan 2014)

Online news provider CNet tests the SAR of mobile phones on a regular basis and stores the results in a database, which was last updated in July 2013. The mean score of their top 20 lowest radiation phones is .32, and the mean of their top 20 highest radiation phones is 1.43.

While cellular towers emit much higher power levels than cell phones, due to the inverse square law the amount of energy a person can absorb from them can be quite low. At ten meters, about as close as a person can get to a cellular antenna, the SAR of a 50 Watt GSM transmitter is .365, or just around the level of one of the lowest radiation cell phones on the market.

Such cellular tower radiation levels have been judged by the Environment Court (Shirley Primary School v Christchurch City Council C136/98) to be so low that the risk of radiation to students from a cell tower to cause sleep disorders or learning disabilities would be “in the order of one in a million”, and that “there was so little evidence for an adverse health effect from RF emissions that it cannot be scientifically calculated as a percentage probability in small fractions of a percent”.

Wi-Fi devices operate on power levels far lower than cell phone towers or Smartphones. While a cellular tower may emit 50 watts, a Wi-Fi router is restricted to 4 Watts or 1 Watt, depending on the frequency band in use. A recent study by the UK National Radiological Protection Board found that for a child in good signal range of a wireless router, the SAR at head level was 0.0057W/kg.

One of the key indicators reported is how much traffic home users consume in a month, and this year it was a surprise.

The amount of traffic used by a residential broadband subscriber in a month can be used to compare New Zealand’s participation in the Internet against that of other countries. It can also be used to determine whether broadband plans and penalties in the market are meeting the demand of the average user. It’s especially important this year, as we enter into a review of the Telecommunications Service Obligations, which may well see Universal Access for broadband replace older obligations such as unlimited local calling and the right to a phone line that supports fax and dial-up Internet.

For the 2010-2011 reporting period, the Commission reported “the average fixed line broadband subscriber is using around 10GB of data per month”, and that this was an increase from the previous year’s report of 7.5GB. This shows a 33.3% increase, which is coincidentally close to the 34% Compound Annual Growth Rate seen across the world as reported by Cisco’s Visual Networking Index.

The growth rate was further reinforced by Cisco’s Dr. Brian Pepper, who in a Commission sponsored conference reported that at the end of 2011 the average New Zealander was using 12GB/month of traffic – a 17% increase over the six months from the end of June 2011.

Given the data points and international trends, we would expect to see figures like this (reported figures in bold, others extrapolated):

The expectation given these trends is that by June of 2012 we’d be up to nearly 14GB/month – not far off from the 16GB/month estimated by Statistics New Zealand and based on reports from end users on their own consumption.

The Commission however in the executive summary of their 2012 report states “Fixed broadband data use also doubled in the last year with the average amount of data traffic per user now at 19GB.” That’s a huge jump, and a dubious claim. Nothing significant occurred in the market to bring about a doubling in traffic utilisation.

Later in the report, footnote 8 on page 24 states “The Commission moved from collecting an average broadband data use figure from respondents to collecting total data broadband data sold by respondents, which was used to calculate an average.” And there’s our answer. Nothing significant did occur – just a major change in reporting.

Why would the Commission move away from using a recognised figure to a measure of how much data is sold by carriers?

I call on the Commerce Commission to publish actual use figures as at the end of June 2012 and to return to publishing actual use figures in future reports, so that the industry and users can have a consistent and realistic benchmark to work with.

In a report published in April, Statistics New Zealand estimated that 331,000 households don’t have broadband Internet access. A third of those households cite cost as the main reason. More troubling is that 63,000 households with dependent children don’t have access to the Internet because of cost.

Statistics also noted that 215,000 households don’t have landlines, but didn’t break down the reasons behind this. In Australia, 40% of mobile only households cited cost as the reason for not maintaining a fixed line. Going mobile only can be a huge cost saver if all you want to do is call and text. If New Zealand follows the lead of the European Union, soon up to 27% of households will be mobile only, and for many of those households cost will be the reason.

Prepay mobile and text are an amazing, inexpensive enabler of communications, and they’re easy to understand. Text messages and minutes have a cost. Sometimes in-network minutes cost less, but there’s a finite set of variables at play. On a monthly basis, prepay is usually cheaper than keeping up payments on a fixed line – and unlike fixed lines, prepay mobiles still receive calls and texts for months when you’re out of credit.

Prepay mobile data is an entirely different beast. It is far more expensive than fixed-line data, and comes in far smaller allocations. It’s allocated in bytes, not minutes, and it can be hard even for technical users to understand how bytes are getting spent. A simple mistake like allowing Windows Update to run over mobile data could see a data cap meant to last a month gone in minutes.

It’s true that mobile data is more expensive to provide than fixed-line data, though in New Zealand some of this expense comes from government policies around the sale of radio spectrum and carriers’ abilities to build radio towers. Other factors include New Zealand’s low population density. The end result is that prepay mobile data on Telecom’s and Vodafone’s national networks can be 50x more expensive than data on their fixed line networks.

It’s also true that the amount of mobile data required to perform most day to day tasks on the Internet is vanishingly small, and using the mobile web can be surprisingly inexpensive. For less than the standard cost of a prepay text message, you could check your balance on a mobile-optimised online banking website, download a Charles Dickens novel from Project Gutenberg, and have an entire conversation via Facebook Messenger.

The cost of optimised mobile data is so small that when Amazon sell a 3G-enabled Kindle, they include free 3G data for life, worldwide. Take your Kindle anywhere and the cost of browsing their store or downloading a new book is zero. Want to Tweet that you’ve finished a book? That’s free too. Similarly, Facebook have launched a product in many countries called “Facebook Zero”, where all mobile data traffic associated with viewing and posting status updates (but not watching movies) on a special Facebook page is free.

Even though only a small amount of data is required for many important Internet tasks, if you’ve blown your data cap watching a YouTube video or listening to streaming music, you’re out of luck until you can afford to top up your account again – and if your child needs the Internet for schoolwork, they’re out of luck too. Such situations result in the worst kind of social exclusion, and only serve to widen the digital divide.

This is a solvable problem, and a solution can be had without new legislation or regulation of the telecommunications industry. Amazon and Kindle have shown us that there is a market mechanism for providing free mobile data to end users: Sending Party Pays.

The idea of Sending Party Pays (SPP) has been around since the days of the Penny Post, and was the standard medium of business communication for the hundreds of years before the advent of the Internet. It allows businesses and government to directly pay carriers to communicate with customers or constituents who might not otherwise have the desire or means to pay for such communications. It further provides an incentive for senders to be concise and efficient with communications, both in terms of quality and quantity. It’s a proven model that needs to be extended into the digital age.

I call on government to commit to offering mobile-optimised versions of all government, social services, National Library, and Network4Learning resources in a Sending Party Pays arrangement with mobile carriers. Every New Zealander with a working SIM card should be able to access such services no matter their financial situations. Given the low transactional costs possible with 3G data, for a few million dollars a year we could make sure no one is excluded from a digital revolution that should be raising up all members of our society.

There will always be a place for requester pays content. In the present business model, all mobile web content is the equivalent of an 0900 call on a landline. When it comes to socially beneficially information, that’s not right. Uploading party pictures or watching the latest viral video shouldn’t be free, but everyone should be able to access education, health care, social services, and government resources for free, and as a society we should be providing this access in the easiest, most efficient manner possible.

If you want to discuss the policies, commercial mechanics, or the technologies that would enable a broad move to the provision of Sending Party Pays 3G data, come to NetHui in Wellington this July and let’s get on with ensuring Internet services are accessible for all New Zealanders.

In 2007 when the sale of this broadband spectrum on both sides of the public band was contemplated, the Government of the day was worried about competition and the efficient use of the spectrum.

“Cabinet has indicated a preference for strict acquisition limits and use-it-or-lose it provisions, in order to prevent spectrum hoarding and to facilitate the development over time of strong competitive conditions.” (Discussion Paper)

40MHz was set aside for regional providers while around 200MHz was put up for auction as national rights – with individual acquisition caps of 40MHz. Lots were sold at an average of $23k/MHz across the band, to a small list of New Zealand companies and one overseas investor – a subsidiary of Canada’s Craig Wireless.

Coming up on six years later, none of the national spectrum rights are in widespread use. CallPlus subsidiary Blue Reach deployed a small WiMAX system in Auckland around the time of the Rugby World Cup, but has since swapped spectrum with Vodafone, necessitating a change in technology. Vodafone has not publicly expressed interest in using the spectrum, however a business case exists.

Meanwhile, the small bits of regional spectrum are in huge demand by operators who actually use it, but didn’t have the cash up front to participate in the auction process. In some parts of the country fights over use of that regional spectrum have become underhanded and acrimonious.

In 2011 a struggling Woosh was sold to Craig Wireless, erasing more than $100M in shareholder value. With government approval, that deal allowed Craig to take control of Woosh spectrum, bringing their holdings in the 2.3-2.5GHz band up to 70MHz.

This week the landscape changed again, with government-owned Kordia selling its 2.3GHz rights to Woosh owner Craig, concentrating 45% of the national rights in the hands of Craig Wireless – a company unlikely to build in New Zealand as it struggles with a cash haemorrhaging local subsidiary and against a forceable de-listing from the Toronto Stock Exchange.

The government’s policy of treating radio spectrum as a tradable property right has once again failed to bring a benefit to New Zealand. In the manner of Esau, the government has sold its birthright for a bowl of lentils. Now while homegrown providers like Araneo, Inspire, and Netsmart fight over regional crumbs yet deliver astounding benefits to rural New Zealand, an opportunist Jacob in the form of Craig Wireless has accumulated more and more unnecessarily fallow national spectrum.

Without significant change in radio spectrum management policy, New Zealand is destined to see the story above played out again and again, to the detriment of its people and industries.

Dear Minister,

I agree with the government’s goal of growing New Zealand’s economy and I am glad a link between effective radio spectrum management and New Zealand’s prosperity has been made in the introduction to MBIE’s Radio Spectrum Five Year Outlook 2012-2016.

Five years is a long time in the world of technology. In June of 2007, just five years ago, the first iPhone was released. The iPhone and its competitors have changed forever the way people interact with their phones and mobile data. This year, 3G smartphones are used by 50% of New Zealanders. Smartphones are poised to have a tremendous impact on New Zealand’s economy, with huge potential to streamline communications in the agriculture and tourism sectors.

In 2007 the most recent IEEE standards for 802.11 Wi-Fi allowed speeds up to 54mbps. This year the first 802.11ac Wi-Fi chipsets shipped to customers, at 867mbps. Due to light regulations and scarcity of spectrum, Wi-Fi devices are best in class when it comes to spectral efficiency and interference rejection, while having a lower cost per chipset than 3g/4g competitors. Wi-Fi is a part of almost every mobile device on the market, and is used daily at home and across all key industries. In the last five years, Wi-Fi has had an unquestionable impact on New Zealand’s economy.

Five years has brought New Zealand a new mobile carrier, but one who operates with a fraction of the spectrum tied up by incumbent carriers, not all of whom use their spectrum. As a result of the entry of 2Degrees, the cost of mobile services has dropped precipitously, and New Zealand consumers and businesses are reaping the advantages of affordable mobility.

Smartphones, Wi-Fi, and a third cellular carrier have emerged notwithstanding Radio Spectrum Management policies, legislation or changes to those over the past five years. They have developed within the bounds of very small blocks of radio spectrum when compared to traditional uses such as radio and television uses. They have shown that they are extremely efficient users of the spectrum, but all would benefit from access to more spectrum, and more effective spectrum management.

Measurements taken by University of Auckland researchers Chiang, Rowe, & Sowerby (2007) showed that in Auckland, arguably New Zealand’s busiest radio spectrum environment, real spectrum use in 806-2750MHz was only 6.2%. These measurements included all of the cellular and most popular broadband bands. Almost 94% of the New Zealand’s most valuable radio spectrum was quiet it its largest market. This is hardly effective management.

Taken in isolation, the UoA study might seem fantastic or flawed. Viewed in the context of studies around the world including the US and Singapore, some funded by the United States Defence Advanced Research Projects Agency, these measurements are unsurprising. It has been conclusively proven that traditional management techniques do not result in effective use of the radio spectrum.

Tradition, unfortunately, originates from New Zealand.

New Zealand’s pioneering approach to treat spectrum as a property right (based on the Torrens land title system) was based on a 1988 report by London consultancy NERA. Their work in turn was highly influenced by the ideas of Ronald Coase, who in a 1959 paper equated spectrum use to land use, and considered that users who would pay the most for exclusive rights to spectrum would put that spectrum to the best use.

It is unlikely that Coase or Charles Jackson, a key NERA consultant involved in writing the report, envisioned that treating spectrum as a property right would result in the massive inefficiencies we see in New Zealand today.

It has however happened. For a sum of money enough to block smaller competitors, some companies have locked up radio spectrum for years that would have a far greater impact on New Zealand’s economy if in use than the price they paid at auction. As a result of locking up the spectrum, these companies have been able to create an artificial scarcity. They have been able to use a limited amount of spectrum and equipment to provide services, while guaranteeing they were the only game in town. Resulting services and pricing, when compared to Australia or other OECD peers, has been poor for New Zealand.

The best result for the owner of the property has not aligned with growing New Zealand’s economy.

In the Five Year Outlook document, it’s stated that “the key operational objectives of spectrum management in New Zealand are to enable productive radio applications and minimise harmful interference between uses.” If this is the case, Radio Spectrum Management should be investigating ways of enabling productive radio applications as its highest priority – above asset management, documentation reviews, compliance projects, fee reviews, and above any legislative change that would further entrench the existing system of spectrum as an exclusive property right.

Section 4.1.3 of the Outlook document holds the key to efficient, productive, and full use of the radio spectrum. Cognitive radio technologies were created to take advantage of unused radio spectrum. They end the possibility of gaming the telecommunications market by purchasing and then not using radio spectrum. And while the Outlook assumes the technology is unlikely to develop within the next five years, the reality is cognitive radio is here and available today. Chipset manufacturers including Texas Instruments already offer DSP products capable of implementing cognitive radio (including IEEE 802 standards) and commercial cognitive radio networks are in use in the United States today.

The Outlook states of cognitive radio that “facilitation of the technology may require a radical departure from existing methods of spectrum regulation”. The time for a radical departure is now, and the concept that must be introduced to radio spectrum legislative and management frameworks is that of Primary and Secondary Use.

Primary Users have existing spectrum licenses which commonly allow for the right to transmit on a frequency and the right to have no harmful interference on that frequency. A primary user with a national management right could install transmitters around the country have interference-free operation everywhere they transmitted and everywhere their radio signals could reach. Their rights to offer a service would not be impeded upon.

Secondary Users are those with rights to transmit on frequencies only when their transmission would not affect a primary user, and with no protection from harmful interference on a particular frequency. Secondary Users can exist and thrive in areas where Primary Users cannot or will not, for either economic or technical reasons, use the spectrum they have licensed. Secondary use is an extremely good way of ensuring radio spectrum is used effectively.

The cognitive radio technologies now standardised by IEEE are advanced technologies that are capable of allowing safe coexistence of Primary and Secondary Users. They are likely to be adopted across all forms of radiocommunications, as innovative users meet with artificial spectrum shortages created by property rights based management and adapt to effectively communicate. In five years, cognitive radio products will not be an emerging technology, they will be a commonplace one.

The growth of New Zealand’s economy is linked to its ability to effectively communicate – not just with existing technologies, but with what’s next. Radio technology is changing faster than we can forecast on a five year time scale. We can’t reliably predict the next iPhone, Wi-Fi, or entrant into the New Zealand telecommunications market. We can predict that with so much of the world’s radio spectrum sold off but under-utilised, what’s next is likely to include cognitive radio.

The greatest impact Radio Spectrum Management could have on the economy is by ensuring management frameworks are ready for cognitive radio products. Such products will lead to greater, more efficient, lower cost communications, benefiting New Zealand in innumerable ways.

I thank you for this opportunity to comment on Radio Spectrum Management’s Consultation Draft – Radio Spectrum Five Year Outlook 2012-2016 and invite you to contact me if you have any questions regarding my submission.

Regards,

Jonathan Brewer

Television White Space Broadband (TVWS) is an inexpensive, light weight technology – priced closer to wireless broadband equipment than it is to the cellular equipment typically used to cover rural and remote communities. Through its use of television spectrum TVWS can allow broadband coverage far more effectively than technologies like Wi-Fi while emitting just four watts of power – orders of magnitude less than a typical cellular tower.

Using the technology, wireless broadband providers are now able to take advantage of unused television spectrum, while the rights of broadcasters are preserved. In the most straightforward example of TVWS use, if a television broadcaster isn’t using their spectrum in a particular area, and if its use for broadband wouldn’t compromise a broadcast elsewhere, that spectrum is available for use delivering wireless broadband in a dynamic yet controlled way.

To evaluate the potential utility of TVWS in New Zealand, three rural communities that will be missed by the RBI were identified and evaluated. Radio coverage models were constructed simulating common, off the shelf Wi-Fi technology and new TVWS equipment. The models were then compared for coverage potential of each technology – with TVWS broadband showing a clear advantage in some situations.

The full report is available online: http://tinyurl.com/bph5amf from InternetNZ.

Not All Contracts Are Equal

The sharp negotiators at Chorus managed to strike a last mile UFB deal with the Ministry of Economic Development that’s twice as good for suburban areas as the Local Fibre Companies Ultrafast Fibre, Enable, or Northpower received. This has implications for uptake, as retail Internet Service Providers marketing UFB products who will have a higher upfront cost for adding UFB subscribers to the Chorus network than they will for other networks.

How Are The Contracts Different?

The contract differences are in the “Installation Services” section of each contract, and have to do with how much fibre the providers will supply between their networks and subscriber houses, and how much fibre will be run inside each house. The table below shows the terms.

Aerial Drop Leads

Aerial Drop Leads are the spans of cable in an overhead network that connect a house to a utility pole. While the three smaller fibre providers are required to connect houses with up to two spans of cable, Chorus is only required to supply one span. Additional spans will attract an additional charge, to be advised on installation.

The photo below the illustration shows an example on Killarney Ave in Torbay, North Shore, and is one of many two-span installations on the street.

Buried Lead-Ins

Buried Lead-Ins are where the UFB provider digs from their roadside junction to the subscriber’s house. In the case of the smaller three UFB providers, they will dig and install up to 30 meters of underground cable. Chorus will only install fifteen.

While 15 meters may work well in new suburbs, it will be inadequate for half the houses in any urban housing area. The diagram below shows an example on Killarney Ave in Torbay, North Shore. Red boxed houses would attract a surcharge under either provider. Orange boxed houses would be covered free by the three smaller LFCs, but not by Chorus. Green boxed houses would be covered by all UFB providers. The “Chorus Points” here are an estimate, but any real world placement will be no closer to the houses in this example.

Inside Premises Wiring 

When a UFB provider brings new fibre to a house, it enters the house at an “External Termination Point”. It’s not necessary for the fibre to be broken there, it could extend in to the house for termination. In the case of an installation done by the three smaller LFCs, this can be a ten meter span of fibre inside. In the case of Chorus, it’s a five meter span. Those meters are cable meters, not lateral meters. That means if a cable can’t be run along the floor, at least two meters are lost as soon as the cable enters the house.

The diagram of a State House below shows how in a typical Chorus installation, fibre can run out in the foyer, while in an installation done by one of the other LFCs the fibre can make it all the way to the center of a house.

The differences in potential costs for installation across regions and providers are likely to cause huge problems for retail Internet Service Providers. The lack of clarity on the process for determining excess charges for retail subscribers is also disappointing. It’s no wonder that almost a year in to the UFB build, not a single standard retail connection has been sold on the new Chorus UFB network.

Universal Service and Universal Access

Universal Service is the concept of universal availability of connections for individual households to public telecommunications networks. (ITU)

Universal Access is the concept of providing every person a reasonable means of access to publicly available telecommunications. (ITU) This could be by payphones, community centers, computer rooms at schools, or free wifi hotspots.

Universal Service: We’re doing it wrong

The European Commission and the United Kingdom’s Ofcom take a broad view of Universal Service.

Ofcom requires “telecommunications services which are used by the majority, and are essential to full social and economic inclusion, are made available to everybody on reasonable request and in an appropriate fashion and at an affordable price”.

The EC takes a similar view, defining the scope of Universal Service to include voice and data with functional access to the Internet, provided by either fixed or wireless.

In New Zealand, Universal Service is considered access to a copper land line and free local calling at reasonable price. The Kiwi Share Obligations and later the Telecommunications Service Obligations are strictly focused on provision of voice communications, and guaranteeing price equality between urban and rural users.

Universal Access: We’re doing it wrong

Around the world, governments regulate services and subsidize both carriers and individual users to ensure Universal Access. The underlying social objectives met by Universal Access are well recognized: access to telecommunications services is a prerequisite for education and employment.

In South Africa, local telecommunications centers are established, supplied, and staffed on an ongoing basis by a Universal Service and Access Agency. In the United States, Comcast offers and Internet plan providing unlimited low-speed broadband at $10/month for families on a common federal subsidy program.

In New Zealand, Universal Access is rarely discussed, and when it is, the idea is seldom seen in a positive light. Neither the UFB nor the RBI take into account the concept. The Telecommunications Carriers Forum, lobbying against Universal Access, rubbishes the social inclusion factors cited in the policies of many countries. In the eyes of the TCF, a Universal Access policy would be like a policy helping everyone to own a television or a car.

Who is getting left behind?

The urban poor in New Zealand, many having abandoned fixed lines and the associated monthly charges and surprise usage blow-outs, are left with numerous mobile broadband options, but few with reasonable cost structures. Programs like 2020’s Computers in Homes initiative provide limited-term broadband subsidies to low income families, but only subsidize ADSL connections – which require land line subscriptions. A full 67% of their constituency doesn’t have a land line.

The rural middle class is waking up to the reality that the RBI has them paying huge setup charges for wireless or satellite, then suffering speeds a fraction of those available in the cities while paying three times as much for traffic. While dairy farm owners might not notice, their staff and support networks certainly do.

What should we do in the cities?

Building new, low-cost wireless networks in cities has been suggested by a number of community groups. InternetNZ recently funded such a group in Cannons Creek, Porirua. They’ve been asked to subsidize a far bigger but similar project in Christchurch – to stand alongside seven existing broadband infrastructure networks. It’s not the right answer.

In the cities, existing network operators have the scale and systems to deliver reliable services to large amounts of users at a lower cost than any new entrant can be expected to match. Getting that service to the most needy without upsetting the market is a problem of establishing coherent policy and long-term programs, not more infrastructure.

What should we do in the country?

Building new, low-cost networks in rural areas may be a viable activity to reduce costs to rural users. Centering them around community halls, rural schools, or Marae could be a great way to start. Open-Access RBI towers have been deployed with poorly specified basic 3G service, but have physical space for new service providers. No funding exists for new rural service providers, but perhaps it should – provided they build open-access infrastructure, and they build it in to areas the RBI has missed.
Subsidizing the installation of and use RBI and satellite services is absolutely a step the government should consider. No shepherd, milker, or other low-salary rural worker should have to spend 2-3 times as much as someone in the city for the most basic of broadband connections.

What should we do in Wellington?

The UFB and the RBI now settled, it’s time now for a dialogue about Universal Service and Universal Access. Clear public policy objectives need to be established, and plans for meeting them made. If government doesn’t want to step up, InternetNZ or Ngā Pū Waea are two obvious choices for leading the way.

The new towers are required by contract to provide peak download speeds of up to 5mbps, and committed speeds (CIR) of at least 0.045mbps at all times. Vodafone has chosen to use their existing 950MHz 3G technology, and with three sectors employed, each tower has a peak download rate of 84mbps. An even distribution of customers near to and far from the tower with varying degrees of line of sight means that efficiency will be no greater than 60%, leading to real world traffic rates of about 50mbps per tower. While only 1.5 times the speed of a basic 30mbps home user UFB connection, it’s enough to meet contractual obligations.

A new RBI tower can support 1,120 simultaneous users at the 45kbps CIR.

The Commerce Commission published a paper in December 2011 on technical issues relating to demand for ultra-fast broadband. While the RBI service is by no means an “ultra-fast” service, the study presented a good overview of the current needs of New Zealand consumers, and cited some key facts and figures drawn from Statistics New Zealand. The amount of traffic used by the average New Zealand consumer from 2010-2011 was 9 gigabytes per month. As discussed below, times have moved on, and that figure has increased.

The average New Zealand consumer uses 12 gigabytes of traffic a month.

Unless they plan on downloading Blu-ray videos, the average Kiwi isn’t going to be using 12 gigabytes in a day. At 5mbps, they could eat their data cap in an evening, but realistically users are going to be downloading at a rate of 400mb/day, with their highest use between the hours of 8-10PM. Google’s Transparency Report allows one to see the surfing habits of users by country, and this week in New Zealand, surfing habits look like the image below.

With the above data it can be shown that on average Kiwis consume 18% of their monthly traffic between 8-10PM – at an average rate of 75kbps. This means that in order to provide average service to New Zealanders, during peak hours the RBI towers will need to deliver greater than the 45kbps CIR.

In 2012 a new RBI tower will support 671 simultaneous users between 8-10PM.

Nine gigabytes a month is cited by the Commerce Commission for 2010-2011, but today we’re using more. Accepting updated figures as detailed by Dr. Robert Pepper of Cisco during the Commerce Commission’s The Future with High Speed Broadband conference, the average New Zealander today should be just over 12 gigabytes a month. That utilization will increase over the next five years at a 34% compound annual growth rate (CAGR).

The chart above illustrates projected traffic growth in gigabytes per month.

In 2016 the average Kiwi will use 39 gigs/month – exactly what users in the US are doing right now.

With a 34% CAGR, the average bit rate per user required during peak hours will increase steadily, and the number of average users supported will decrease as a result. With the equipment being deployed today – both tower based and end user – in four years’ time each tower will only support 208 average Kiwi users.

In 2016 a new RBI tower will support 208 simultaneous users between 8-10PM.

LTE in 700MHz is touted by many as being the solution to adding capacity to these new Rural Towers. Unfortunately it requires new equipment at both the towers and the end user locations. Considering the 154 new towers, and 103,334 users they could support today, just to maintain average speeds to users each tower will need to be upgraded and two thirds of the end users will need new antennas and CPE. At $100k/tower and $300/user for CPE and antenna upgrades, the additional cost to maintain average service to rural users users will be in the order of thirty million dollars in the next few years.

A huge cash investment will be required just to maintain average levels of service.

While Vodafone is easily able to meet their contractual obligations with the RBI Fixed Wireless Service, the reality is that if any significant number of users take up the service, the quality they will experience will quickly fall below that of the average New Zealand user unless the RBI program receives a significant capital top-up.