UPDATED: Data caps are evil and must be destroyed

[Guest contributor Paul Brislen is chief executive of the Telecommunications Users Association (Tuanz), a consumer advocate group representing large telecommunications customers. He spent the past two days at the Commerce Commission's Future Broadband conference in Auckland, the first day of which was overshadowed by Stephen Fry's Twitter volleys at NZ's internet limits.

A recent StatisticsNZ survey of internet service providers found that data caps have been rising - and a good thing too, given (street-legal) movie download services like iTunes, and the likes of Dropbox business file sharing and videoconferencing make it easy to chew through 3GB a day. Yet 99% of New Zealand ISP accounts are still subject to monthly data caps, by StatisticsNZ's count. Overseas, all-you-can-eat plans are the norm  - Chris Keall]

UPDATE: The latest OECD data has been released. It shows 13 countries with data caps, not four as it was in previously. [Arrgh, it reflects the trend in the mobile data market, where other countries are joining New Zealand's long-time practice of capping data as smartphone usage explodes - CK].

Either way, we are one of only a handful of countries that has data caps and I don't know of any others that have only one ISP (CallPlus/Slingshot) offering an unlimited plan.

So is New Zealand’s broadband “third world”? Are we no better off than nations just emerging from civil war or with famine sweeping the country?

No, of course not. Our broadband as it stands today is middling – we sit in with the bulk of OECD nations and in some instances we are in the “aspirational” quadrant, according to Cisco’s Robert Pepper, who showed us some astonishing numbers at this week’s Commerce Commission conference on the future of broadband.

However, we suffer from incredibly low data caps and as one of only a handful of countries to enforce such things (alongside those broadband giants, Canada, Australia and Iceland) we end up hiding the true cost of our monthly broadband plans.

Partly this is because of the way the ISPs structure their businesses and the way they buy bandwidth, but partly it’s because of the Commerce Commission itself, which doesn’t let the ISPs sell services based on speed they can’t guarantee. And because most of our broadband is DSL, and DSL gets slower the further you are from cabinet or exchange, there’s no way an ISP can put its hand on its corporate heart and say “You’re going to get a 10Mbit/s service” . So they differentiate on data limits instead.

We’ve had unlimited data plans in the past, and CallPlus/Slingshot has one in the market today, but internationally the experience hasn’t been great for many users. Throttling, soft caps that aren’t well defined, unexpected speed decreases, packet loss, shaping, excessive contention – all these and more are brought to bear on the customer, all under the guise of ensuring quality of service for customers.

As we move to the UFB world where we’re all on fibre that’s going to change. The UFB prices are set and sold on the basis of speed – 30Mbit/s down and 10Mbit/s up, 50/50 and 100/50 and so on. These speeds are set, but of course they’re only part of the equation – there’s contention. There’s international capacity. There’s national backhaul. These factors will need to be spelled out clearly and cleanly for customers – and yes, we’ll have to train our customers to talk about contention and committed information rates and all the rest – otherwise customers will be mislead as to what they’re buying.

And as we move to that fibre world we need to drop these ridiculously low caps. 5GB a month is hopeless, 10GB barely any better. Remember, these days it’s not one user per household but all users per household who are online. My house is online even when we’re not around – downloading patches and updates for a plethora of devices. When I first got broadband in 1999 I had a monthly limit of 600MB (that’s right, megabytes) of data and I stuck to it, even while I was working from home. Today I have a 120GB plan (oddly for a similar amount of spend) and we occasionally hit the ceiling. I blame Club Penguin – those Puffles must be quite the bandwidth hog – but this is the way of the future . More data at faster speeds. 100GB won’t cut it next year for us and when the UFB arrives I imagine we as a household will be looking for a lot more.

Data caps as an issue needs to be sorted out now, before we start promising an exciting new world of speed that we can’t sustain. The good news is that the UFB will be truly world class and we’ll be ahead of countries like the UK and the rest of Europe as they struggle to deliver 30Mbit/s. We need to make sure there is no bad news to go with that.