Regulation

Government and regulatory issues surrounding telecommunications in New Zealand

Broadband Affordability in New Zealand

kiwibrew Broadband, Regulation

The ITU/UNESCO Broadband Commission for Digital Development finds that in many economies broadband access costs less than 2% of an average household’s income. In 2011 they set a “global broadband affordability target” to encourage ITU members to bring the cost of broadband to under 5% of average income by 2015.

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.

map-cap

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

Cell Phones, Wi-Fi, and Electromagnetic Radiation

kiwibrew 3G, Cellular, Radio, Regulation

All radio devices like cellphones, radios, televisions, and Wi-Fi devices communicate via electromagnetic radiation. These man-made devices are not the only source of such radiation – the Earth’s magnetic field, the Ionosphere, the sun, and the universe in general all emit similar electromagnetic radiation, over an extremely broad range of frequencies.

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.

Creative Commons licensed Image courtesy of Wikimedia user Borb

 

 

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.

The table below summarises the various data:

[table id=1 /]

With 5,407,000 mobile subscriptions as of 2012, New Zealand has more active cellular connections than people. Many of these connections, including all of Telecom’s nearly two million, are 3G connections that support data alongside voice. Smartphones were in the hands of 44% of subscribers by 2012, and most of those subscribers use data on them every day. Smartphones also make up 58% of all new phones sold today.

One of the most common features of Smartphones is the ability to use data on Wi-Fi networks. When using Wi-Fi, the power levels absorbed by a user of a smartphone will be far lower than if the device is using 3G.

From the research cited above, it’s clear that if you’re going to use a Smartphone or allow one to be used near you, the best way to minimise radiation levels is to ensure that Smartphone is using a Wi-Fi hotspot for its data. Calling for the elimination of Wi-Fi from public places or schools on the basis of a radiation hazard is entirely misguided and counterproductive to a goal of lessening absorbed radiation.

ComCom’s 19GB/Month Broadband Use Claim

kiwibrew Broadband, Regulation

The Commerce Commission has published an annual report on the state of the telecommunications industry since 2008. The report, which is issued each year in March or April, publishes data collected from operators from a period ending around a year before publication. The April 2013 report, for example, covers the period between July 1 2011 and June 30 2012.

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):

2009-06 2009-12 2010-06 2010-12 2011-06 2011-12 2012-06 2012-12 2013-06
5.5 6.5 7.5 9 10 12.0 14.0 16.5 19

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.

Sending Party Pays for Bridging the Digital Divide

kiwibrew 3G, Broadband, Regulation

While many New Zealanders are considering the jump from copper to fibre broadband, many more aren’t considering either. It’s not that they don’t want broadband for themselves or their children, it’s because they can’t afford it.

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.

Kordia Sale to Woosh: Spectrum Management Failure

kiwibrew Broadband, Cellular, Regulation

Radio spectrum in the 2.3-2.5GHz bands is best known for use with broadband. It is the 2.4GHz “Public Park” that millions of New Zealanders use on a daily basis for Wi-Fi, Bluetooth, and other wireless data applications.

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.

Screen Shot 2013-04-17 at 10.32.39 AM
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.

Screen Shot 2013-04-17 at 10.32.47 AM

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.

Screen Shot 2013-04-17 at 10.32.54 AM

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.

Cognitive Radio Should Be Priority #1 for RSM

kiwibrew Radio, Regulation

RE: Consultation Draft – Radio Spectrum Five Year Outlook 2012-2016

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 for Rural Wireless Broadband

kiwibrew Broadband, Radio, Regulation

This week Telco2 (publisher of NZTelco) has released an InternetNZ-funded study of the practical application of Television White Space Broadband for use in rural New Zealand communities.

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.