Sponsor's Message

Those with a good memory will recall that at this time last year I made a very bold prediction that has yet to come true -- but I still believe it will. Certainly Microsoft's willingness to release some of its own source code to various governments indicates they're starting to sway a little.

This year I expect to see Microsoft perhaps branching out into a little more of the media distribution/player marketplace -- mainly through its Xbox platform.

The Xbox will get a makeover, turning it into a PVR and media-player system that will be pushed hard as a platform for the downloading and playing of music and video content over the internet.

Thanks to some strategic deal-making on the part of Microsoft, Xbox owners will be able to download music, video and new games for their machines over the Net. And, because all the DRM will be onboard, they'll also provide Xbox users with the ability to transfer their downloaded music to WMA-compatible portable players. Look also for an Xbox with a DVD or CDR burner option so that downloaded material can be kept on the shelf rather than in the box.

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Of course we can also expect backers to work very hard at breaking the DRM and turning the new Xbox into a cheap "universal" media player.

Unfortunately for Kiwis, none of this wonderful online functionality will be of much use to us because I'm betting that a weak-knee'd government will follow the Commerce Commission's recommendations not to unbundle the local loop.

In their naivety, they'll believe that Telecom will play fair and offer to wholesale their DSL network at a rate that will allow our broadband prices to come into line with the rest of the western world. Unfortunately, that's not going to happen!

I mean, just look at how Telecom celebrated the CC's recommendation just before Christmas not to unbundle the local loop -- they put up phone rentals by as much as 55 cents, the maximum amount they're legally allowed to.

But hang on -- that's only fair right? After all, they have a responsibility to earn a profit for shareholders and the Kiwi-Share gives them the legal right to raise rentals by the rate of inflation -- correct?

Yes, that's true of course -- but if you need proof that Telecom continues to exploit its local-loop monopoly, just ask why the increase was only 55 cents in areas where the company faces no competition for local-loop services. Why was the increase less in the very few areas where they're competing with TelstraClear's local-loop?

Nothing could demonstrate more, just how skewed the government's priorities are, than to see the PM's infatuation with The Arts exercised to its maximum degree in the disproportionate representation of her "friends" in the New Year's honours list, while hi-tech industries were, at the same time, softened up for the bad news that the government probably won't be going to bat for our Knowledge Economy against the might and monopoly of Telecom.

Our ridiculously expensive DSL pricing was really brought home over the holiday break when I had a Canadian documentary maker here filming a piece on my cruise missile. They pay just 40 Canadian dollars a month for an uncapped 512Kbps DSL connection and couldn't believe how much we're being ripped off.

Another US TV producer asked me to send them a couple of gigs of video footage and I had to tell them "sorry, I'm close to my DSL cap so I can't send it until next month."

How absolutely bloody ridiculous -- and hardly the sort of thing that encourages the belief NZ is a first-world country.

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