Monday, 9 November 2009

I, for one, welcome the Commerce Commission's protection

Isn't it wonderful that the Commerce Commission, in protecting us from a $20 surcharge for premium VDSL2 offerings that could boost speeds from about 8 MB to about 40MB, has ensured that nobody except Telecom's CEO has VDSL2?
Unfortutunately, there's no current timetable to roll-out VDSL2.

There are no technical hold-ups, but Telecom Wholesale is locking horns with the Commerce Commission over whether it can charge an extra $20 a month for this premium service (Orcon, Vodafone and other interpret regulations as saying DSL is DSL, and there can only be one price. Both also want better terms to put their own ADSL2+ or VDSL2 gear into Telecom's roadside cabinets.)


  1. Jerry Hausman has argued that FCC dithering in the 1970s delayed the arrival of mobile phones by 10 years into the US, and roughly estimated a cost of US$50 billion in lost consumer surplus (back when that was a lot of money). I don't know much about the Commission's thinking, or how much we should believe what Telecom says, but one would hope the Commission is explicitly considering whether their regulation is delaying the introduction of higher quality service, and not limiting their thinking to a few percentage points of price and and there. It's missing markets that drain surplus much more quickly than excess pricing. Unfortunately static welfare models do not capture quality.

  2. Not to mention that introduction of this service would likely drive down prices and/or increase service for the inferior-subsitutes. For example : my 10MB Telstraclear cable connection, which hasn't changed much in price or service for about 3 years now...