Sponsor's Message

But what am I talking about?

I refer of course, to the relatively short gap that separates New Zealand from its neighbour, Australia.

It has long been known that the cost of shipping freight across this little expanse of ocean is very high, by world standards. However, it seems that the advent of the Internet and a shift to the transfer of bits and bytes rather than boxes and bins has changed nothing.

We're talking about broadband charges again (of course).

Based on Telecom's pricing structure for DSL, I can only assume that traffic sent from here to Australia (or the other way) does not actually take the shortest route (that 2400Kms). It would appear that it must surely go the long way -- zipping past the tip of South America and weaving around the bottom of the African continent.

That's the only explanation I can come up with for justifying Telecom's over-cap DSL bandwidth between the two countries.

Readers Say Got something to say about today's column, or want to see what others think?  Visit The Forums Have Your Say

The reason I suggest this is due to Telstra's decision to remove data caps on many of its DSL services in Australia.

Now we know that Telecom keeps telling us that their 20c/MB is a fair and reasonable charge for international traffic (but what about the LOCAL traffic at speeds over 128bps????) -- justifying this claim with the reminder that we're so very far from the rest of the world and long data links are expensive.

Here's a question for Telecom then: Since Australia is only 2400Kms closer to "the rest of the world", how come Telstra's DSL users now get UNCAPPED broadband at 256Kbps download speeds for as little as A$69.95 and 512Kbps download speeds for just A$99.95?

Hands up all the NZers who'd jump at the chance for such a cost-effective uncapped service.

So, given that Telecom's 20c/MB over-cap data charges apply to traffic that goes to and from Australia, yet Aussies can get such a great deal on uncapped broadband to the rest of the world -- the only logical conclusion is that it's the short hop across the ditch that's the problem.

Perhaps Telecom could offer us uncapped broadband by simply blocking all the trans-Tasman traffic, you know -- that really expensive stuff.

Of course you know I'm just kidding.

The real difference between Australia and NZ is not that miniscule 2400Kms, it's the fact that Telstra has *competition* in the Australian DSL market so they have to be more realistic about their pricing.

And, as a final data-point, it's very interesting to note that despite the huge amount of money Telecom claims it's pouring into making its DSL services more accessible around the country -- they still made a very healthy profit from JetStream. In most other situations, rapid growth requires companies to operate at a loss as investment exceeds revenue. That this isn't the case with Telecom's DSL services surely indicates that they have a truly massive margin in place.

However, the most interesting time for Telecom will be February of next year.

Long after the tinsel has been taken down and the left-over ham consumed, parents all around the country will get a reminder of the festive season in the form of their Telecom bill. There, as a shining example of just how a capped DSL service can ruin your day (and your bank-balance), will be the results of little Johnny's all-day, all-night sessions using X-Box live through Telecom's 256Kbps DSL service. Owch!

I sure hope they're adding extra staff to the call centre for that one!

If any Aardvark readers want to share an opinion on today's column or add something, you're invited to chip in and have your say in The Aardvark Forums or, if you prefer, you can contact me directly.

Contacting Aardvark
I'm always happy to hear from readers, whether they're delivering brickbats, bouquets or news tip-offs. If you'd like to contact me directly, please this form. If you're happy for me to republish your comments then please be sure and select For Publication.

Other media organisations seeking more information or republication rights are also invited to contact me.

Just add a couple of lines of JavaScript to your pages and you can get a free summary of Aardvark's daily commentary -- automatically updated each and every week-day.

Aardvark also makes a summary of this daily column available via XML using the RSS format. More details can be found here.

Contact me if you decide to use either of these feeds and have any problems.

Linking Policy
Want to link to this site? Check out Aardvark's Linking Policy.

Did you tell someone else about Aardvark today? If not then do it now!