UFB Services through Chrous

We have signed the wholesale services agreement with Chorus and expect to have our first UFB services online by March. Over the next few weeks we will be finalising both P2P (layer 2 Ethernet) and Bitstream2 pricing and service levels which will then be available via our sales team.                                                                                                   

What will be next?

Enable are currently finalising their WSA and expect to have that to us shortly, and presuming it does not alter too much from the draft versions we have seen, we expect to have that signed and returned to them in fairly short order.

We will also get a chance to check out the new testing facility deployed by Enable and Ultra-Fast on the 13th February when they have their official opening in Auckland.

Non-UFB Related Stuff:

We are currently wrapping up a project that has looked into upgrade options for our traffic management platform. We are looking to incorporate some great new features in the upgraded version that will allow for new services to be added to our Internet plans. I can’t go into too much detail just yet but suffice to say, we are looking at another NZ first. The upgrade will also allow for an easier understanding of where traffic is being generated and what trends exist for your data profile.

We have a number of staff off to a range of conferences in the coming weeks. Tim is off to NZNOG tomorrow, Daniel is attending the IPv6 for Government workshop on the 23rd February, and I am off to India for APNIC33/APRICOT2012 that same day. Details on the session I am speaking in can be found here: http://www.apricot2012.net/program/ipv6

Cheers,

Brendan Ritchie

We noted with interest the application made to ICANN by Dot Kiwi Limited for the .kiwi gTLD string. Dot Kiwi’s press release can be found here. We also noted, once it was pointed out to us by @kiwibrew, that Dot Kiwi looks to have a majority of it’s owners based overseas, which raises some concerns.

Any new entity holding rights for a gTLD will find it tough to win over Australian and New Zealand ICT communities that have been so well served by Internet NZ and .AUDA  for so long, these two organisations have operated with a level of integrity and transparency that would be hard to match, yet alone surpass. Our worry is that when you have a privately owned and overseas based company enter the market with the primary aim of recouping a substantial investment, and then turning a profit, how can we be sure that the standards set by Internet NZ and .AUDA will be maintained?

We currently enjoy transparency in operation and world leading shared registry services which allow guaranteed rights to transfer domains between registrars, but these systems were not developed overnight. Compared to international TLD’s like .com and .net, we currently operate in a far more efficient space, what safeguards or industry standards will exist to ensure that any new TLD’s operate in the same manner?

A more fundamental question is why are we creating these new TLD’s? Some believe that TLD’s such as .aussi or .kiwi serve no purpose other than to extort money out of existing .nz or .au name holders to protect their brands. These people would ask who the individual is that wants desperately to buy a .kiwi or .aussie domain but doesn’t otherwise own a .nz or .au equivalent? Personally, where a company has missed out on a .com name and operates in multiple countries, I can see some value, but these companies will be in the minority. Certain new TLD’s may also fit better within a brand structure and represent value, examples such as .internet for companies like DTS comes to mind.

How much will new TLD’s cost businesses?

Two factors will decide the cost this innovation has to your business:

• How big is your business?
• Where do you operate?

The bigger your business the higher profile your brand is likely to be, and the higher the profile, the more value your brand – and any associated domain including your brand – holds. Therefore, the bigger you are, the greater the likelihood of someone trying to acquire the domain and use it to either direct people to their site, or to sell to the highest bidder. But if your company really is of a sufficient size to make this scenario likely, then you will have no issue buying each domain as it becomes available, but of course this doesn’t take away from the fact that it is a still a new and unnecessary cost. The spate of .xxx domains brought up by universities and high profile brands is clear evidence of this phenomenon.

If you operate in a market that is big enough to create demand for a large number of domains to a point where acquiring the rights to those domain suffixes becomes profitable for a TLD registrar, then you will see a lot of variations enter the market. Australia will likely see a lot more domains suffixes appear than NZ will simply due to population and market size.

keen to hear everyone’s thoughts on this topic.

Brendan (with a lot of help from Tim).

I am sure the Christmas/New year break didn’t help, but the stated Timelines for UFB wholesale service agreements seem to be sliding further back by the day. You will have noticed we intended to be the first ISP to sign with Enable for UFB services late last year, well, that still hasn’t happened as there is a hold up in the release of the WSA due to a pre-launch audit being conducted by Crown Fibre having not yet concluded. Just a side note here, we weren’t going to be the first RSP to sign due to any special treatment from Enable, but rather we were just the most eager to push forward, and still are.

Chorus were initially full of gusto and seemed very keen to push forward in our talks with them, but since meeting with them a month ago they have also experienced delays related to the development of the required agreements. I have just received the relevant documents from Chorus, so hopefully we can movement forward and sign them before the end of February.

While these are not exactly heartening developments, I must say that the Enable team come across as a well drilled unit and seem extremely well versed on the new suite of products that most of New Zealand is about to have become available to them, so once Crown Fibre finishes their audit, I think they will do a great job in rolling out and promoting the new services. And while I would like to see more progress, the truth is that GPON services won’t be available any sooner than mid 2012 at best, and if current progress is anything to go by, late 2012 is more likely for the initial deployment areas. And in the mean time, Ethernet services from existing providers have reduced in price to a point where they are at or below UFB P2P pricing anyway, just on longer contract terms.

Let’s hope that as we travel further into 2012 these teething pains dissipate and we start to see some progress that gets closer to matching publicly stated aims and timelines.

Brendan Ritchie

Hi All,

as a large number of us here at DTS are very close to signing off and going on our well earned breaks, I just wanted to say thanks to our clients, industry partners and suppliers for making 2011 the most successful year in our 10 year history. We have seen huge growth, won a major award, successfully launched Chapter (our managed WAN service), and have had some amazing people (and pets) join our team. 2012 looks set to be an amazing year for us, and as the UFB rollout intensifies, we will be kept busier than ever.

We will be available if you need us over the break via the usual channels – the office will remain open throughout – but if we don’t talk to you until the new year we wish you and your families a happy and safe Christmas.

I will leave you with a photo taken from our office earlier in the year that seems to suit the season, just not in our hemisphere…

Merry Christmas,

Brendan Ritchie

Yesterday a report written by Donald Clark for the NZ IPv6 Task Force was released that sought to outline the status of v6 adoption in the state sector and the barriers that exist to prevent further uptake at the present time. I thought it would be interesting to look at what it represented in terms of progress over the past year.

In 2010 the IPv6 task force released another document that is covered in the video below by Hurricane Electric.

Key points from the 2010 report were that:

• 74% of respondents came from the public sector.
• More CIO’s felt they were adequately or “very well” informed about IPv6 (74% of respondents, compared with 54% in 2009).
• 91% of the CIO’s said they are aware that old-style IPv4 addresses were running out, up from 70% in 2009.
• No respondents had v6 capable external facing services.
• More than half the organisations surveyed were planning to implement IPv6 on their websites, email and other public internet services, with most of those (24% of total respondents) planning to make the move within a year. However, 46% (down from 54% in 2009) still said they had no such plans.

Direct comparison between the 2010 and 2011 reports is hard because of the difference in the sample populations and also because of the reporting formats used, but as the executive summary in the most recent report states, the public sector now has the majority of departments tackling, or about to tackle, IPv6 migration, and it seems a policy thrust is emerging that will lead to a spurt of adaptation in 2012. But the same barriers exist as last year, and seemingly at similar levels. Outdated hardware presents a cost, and on larger networks a real headache to forklift out. The required skills to see through v6 roll-out are sparse, and many just don’t think v4 is going away fast enough to make it a priority as yet.

Here is what has changed. ISP’s have made real progress in 2011. This isn’t a self serving rant, DTS is not alone in being natively IPv6 capable (although we have won an industry award for our efforts), FX are very good in this space as well, and as you can see from the growing list of service suppliers on the task forces website, other companies are following suit. In 2010 the question for government and business was “can I become IPv6 capable?” now it is “do I want to become IPv6 capable?” So we have removed barriers in 2010/2011, we now need to removed obstacles in 2012.

I agree with Donald’s assertion that suppliers need to be engaging end users and providing as much insight as possible in this field, and as he knows, we have been actively helping clients through the process in recent times, and will be doing so on a greater scale in the months ahead. From our perspective, this means (among other things) physically being on site and providing technical assistance and providing peer-review on design work.

It seems no one is talking about the other value add components of IPv6. These include removing NAT related complexity, simplified header format (6 of 12 v4 fields removed), embedded security through mandatory IPsec implementation, and introduction of ICMPv6 which allows auto configuration, neighbour discovery and multicasting. It may well be that these are not widely understood, but it is also likely that they do not offer a payback in their own right against the cost of v6 adaptation, but surely they form part of a bigger picture?

It is mentioned fairly often, but I will say it again, rather than simply focus on v4 running out to motivate an end user, the key is to talk about the emerging technologies that will have to be launched via v6, as these will be inaccessible for those who have not taken the plunge, and I think this will represent the first opportunity cost to business of not proceeding with IPv6 capability. Fear or greed will motivate, this point targets both. the fear of missing out, or the “greed” (probably overstated) to utilise emerging technologies for further monetary gain.

In summary, leading suppliers of services to business and government are natively capable and ready to provide services on demand,  and CIO’s are increasingly aware of the issues at play and are factoring potential costs into budgets for 2012. I think the latest report shows that we are heading in the right direction.

This is going to sound like an advertisement pitch, but honestly, if you are running a business that you believe does not need speeds in excess of 100Mbps download and 50Mbps upload, then GPON/Bitstream2 is going to be the product for you.

Let me take a step back and clarify what the Bitstream2 service is.

Crown Fibre first classified service types, Chorus then came out with Bitstream, but they will soon announce other product names while the other LFC’s look set to stick with Bitstream as a theme.  And in this fashion we have got to a stage where we almost have three names for the same services.

CIR is inexpensive to add with wholesalers able to add 2.5Mbps additional CIR upload/download as needed. So basically, you can set the CIR, or dedicated access speed, at whatever your business needs, tailoring an individualised solution to fit.

P2P services start as a best effort access speed, and CIR need to be purchased over and above that for the end user to have any speed guarantees.

While we are not ready to announce pricing for these services yet, I can tell you that Bitstream2 has a buy price that is less than 1/6 of the buy price of the slowest P2P service. So I was thinking to myself that for the P2P services to command such a hefty pricing premium it must surely have some important service differentials worth noting? Nope. P2P services can handle jumbo frames, allow more MAC addresses, and can scale to greater speeds. The last point will be crucial to some enterprises, but with the same uptime SLA’s, SME’s will be looking hard at Bitstream2 in 2012 as it is rolled out across NZ.

So it seems that for businesses that require greater than 100Mbps/50Mbps CIR there is still a place in the market for the fibre companies that did not get a Crown Fibre contract. The recent moves made by those companies to lower both one-off and recurring charges have ensured they remain relevant for the higher end of the NZ business market.

These points are all made based on meetings I have had with Chorus and Enable over the last week, if I have got anything wrong, I am always happy to be corrected.

Cheers,

Brendan Ritchie

The register of Chorus non-retail users is designed to ensure that companies are not purchasing services at a wholesale rate primarily for their own use, as this would by definition make them a retail client that should be getting their services from an RSP. Having seen the list of 30 or so companies already listed at http://www.comcom.govt.nz/register-of-chorus-non-retail-users/ I was surprised to be told by the Commerce Commission that we are the first company to actually submit the paperwork required for an RSP to be added. This is because all of the other companies listed were formerly clients of Telecom Wholesale or the “old Chorus” and were therefore simply assumed to fit the bill and were added without needing to submit any new forms. DTS has not previously worked with Telecom Wholesale or Chorus, and are apparently pretty rare in that regard, so we are first up to try out the submission process. Forms were submitted Friday the 2^nd December, and all going to plan, we will be listed in two weeks.

In other news, I met with Chorus yesterday and was very impressed with their general approach and how keen they were to work with DTS going forward, certainly a huge improvement on past experiences with Telecom Wholesale. We are on track to sign the Chorus UFB WSA in the coming weeks but I need some clarification on terminations methods for the various bitstream services, CIR SLA’s and geographical limitations, and one or two other niggly points.

Cheers,

Brendan Ritchie

Donald Clark (@donaldsclark) made a comment in relation to my recent post on the trends coming our way in 2012. His point was that CPE, namely the edge router, will need to be very carefully selected as faster circuit speeds make a large number of existing routers obsolete.

Recent reductions in pricing by a number of fibre providers have allowed us to now go through the process of offering clients upgrades in circuit speeds, usually at the same or lower cost. I told our sales team at our meeting on Wednesday that when we process these upgrades we must be very careful to take notice of the router being used currently and advise the client as to whether it will allow them to fully utilise their upgraded circuit.

Where we have a managed router deployed at the clients premises we need to ensure that the model in place will continue to meet their needs. A common example of this is where we have a Cisco 881 deployed to cater for a 30Mbps service, and that service is upgraded to 50Mbps for the same price. We would then strongly recommend a Cisco 1921 or better to ensure the full 50Mbps speeds can be attained.

Further to this, if a client is running any combination or number of VPN’s or QoS, this will also create additional work for the router and require a more robust model to be deployed.

Failure to gain a shared understanding between the supplier and consumer on suitable CPE, in both the residential and business markets, will result in more support cases being raised and more post sales disputes.

It will be interesting to see what models are deployed in the residential space as circuits are advertised as being able to reach download speeds of 100Mbps (albeit CIR is less than 10Mbps, and as low as 2.5Mbps), installation costs may increase as more robust models are sought. In the business space, we need to be working with the clients IT liaison pre-sale to ensure we have a complete end to end solution mapped out.
Cheers,

Brendan Ritchie

DTS is a business focused ISP, and as such we have an unusual bandwidth usage pattern. When our clients go home for the day at 5pm, the percentage of our international bandwidth capacity being used drops to about 5% -10%, so we have a lot of resource available and no one using it. If possible, we would like to make a return of some sort on that resource, and in doing so, we would like to see what demand there is in the residential space for top shelf unlimited data plans.

So, we are going to offer 20 unlimited residential data plans on a first come/first serve basis.

Here is what we are offering:

• Naked ADSL2+ Ethernet or VDSL2 Ethernet connection (depending on what is available at your location)
• Unlimited traffic between 5pm-8am Monday to Friday and all weekend.
• Unlimited national traffic and international uploads all other times.
• 20GB of international downloads per month between 8am-5pm Monday to Friday.
• More international capacity than you can possibly use.
• IPv4 and IPv6 connectivity.
• 1 IPv4 static IP address, and /64 IPv6 subnet (if requested)
• SLA for circuit performance and resolution times.
• Dedicated Account Manager.

And this is what it will cost:

Now, we know this is going to be seen by some as expensive, and compared to many other residential plans in the market it is, but we are about quality in everything we do, and nothing else in the market offers what this plan does. If you have reason to do massive quantities of data and need fast speeds/low latency, then this is the best deal you will find.

We can’t vouch for the quality of the copper running into your home, and we can’t promise the local exchange won’t be running at capacity, but we can promise that we have so much international and national bandwidth available that contention on our network will in no way be a limiting factor when it comes to your speeds.

If you are interested in this offer, please email us at sales@dts.net.nz or call 0508 387 669.

Notes:

$00.02 per/MB over business hours cap. Early termination fees: Naked ADSL2+ (12 month term): $120 per month of remaining term, VDSL2 Service (24 month term): $170 per month of remaining term . Terms and conditions at http://dts.net.nz/terms-and-conditions/.

Here are my predictions for 2012 in the context of the ICT industry in New Zealand, and further limited to the part of it I feel I may have my head around…

So here we go:

• Transparent wholesale UFB pricing will result in business focused RSP’s looking to add value in ways other than simply low circuit prices. This will come in the form of enhanced support, data plan improvements, additional services and improved service reporting functionality.
• Older niche ISP’s that have not invested in their networks sufficiently in the past few years will disappear. The UFB products offer faster speeds at cheaper prices, Gbps circuits are going to be common place in the market ahead of us, so if an ISP can’t efficiently scale their network, they are gone.
• Open access fibre providers that did not win a UFB contract will start to see the market for their sub-100Mbps layer 2 fibre services dry up in place of GPON services. GPON services can be tailored to suit with CIR able to be added cheaply and effectively to give (as an example) 10Mbps symmetrical CIR bursting to 100Mbps down/50Mbps up for less than half the existing price of a 5Mbps layer 2 fibre.
• As the company’s mentioned above start to feel the pinch and look to create new revenue streams to counter the trend of increased competition and decreasing margins, we will see one or two enter new markets, either as providers of VISP services, or as fully fledged unapologetic ISP’s in their own right.
• As existing fibre services are made faster and cheaper and UFB services start to reach greater numbers of businesses, those selling cloud based applications and IP based telephony and video systems will flourish.
• International bandwidth pricing will decrease further (will this affect Pacific Fibres planned return on investment modelling? They will need to sell more capacity at a lower cost to be a viable alternative). Of course this means ISP’s will have access to cheaper international capacity, but with faster UFB circuit speeds supplied to end users, ISP’s will need to buy more bandwidth than ever. All in all, greater economies of scale should see business/enterprise grade data pricing reducing as the year rolls on.

In many ways I am really just saying that the trends I have seen ferment in the later part of 2011 will gain momentum through 2012.

With my DTS hat on, I have to say I am very excited about the prospects ahead in 2012, as more fibre is rolled out to businesses across the country, more and more businesses become potential DTS clients.  We are well down the path of developing additional services that will be firsts in the NZ market, and we are seeing a marked increase in sales of both Verse IP Telephony and managed services that I expect to gain further momentum next year.

I have no doubt missed some very obvious points, so will be keen to hear your thoughts on the year to come.

Cheers,

Brendan Ritchie