ISPs positive about Telecom’s Jetstream rejig

But churn fee seen as unfair

Telecom’s modified Unbundled Bitstream Service (UBS) has been received favourably by ISPs, who say it will make the wholesale DSL deal more profitable for them. However, the churn fee is still a point of contention, and seen as unfair.

Matthew Hobbs, director of Auckland ISP Quicksilver, says “lowering [the churn fee] is OK, but we think it either shouldn’t be there at all, or should be consistent across all ISPs. At the moment, there is still the ability for Xtra to aggressively acquire customers from other ISPs, while the reverse is not possible without incurring significant cost.” Hobbs says that the actual amount is less of a concern for Quicksilver than the iniquity of the churn fee itself.

“The pricing structure we didn’t completely agree with, but it has been reduced a little which is positive”, says Hobbs. Despite the churn fee remaining, Hobbs thinks that “the UBS concept will be very positive for the industry and consumers”.

Hobbs is also pleased that a 256kbit/s business service will be available sooner rather than later.

Hobbs’ sentiments were echoed by Seeby Woodhouse, who runs Orcon, another Auckland-based ISP. “The UBS offering is not too bad – with volume it is possible to make the pricing work and compete with Telecom”, says Woodhouse. Woodhouse too would like to see the churn fee go.

The dropped requirement for establishing handover points with two megabit/s circuits “doesn’t really work out much different for us but for smaller ISPs, it makes it much easier”, Woodhouse says.

Orcon is already promoting the UBS, with a $49.95 per month offer for residential customers who sign up before the official launch date. The cost will be $59.95 per month for customers who sign up after the launch, the date of which isn’t yet known.

In the wake of UBS, Telecom announced that the low-speed Jetstream Starter (also known as JetStart) will be phased out over the next five months. The low-speed DSL service runs at 128Kbit/s symmetrically, and isn’t classed as broadband but remains popular with customers thanks to its affordability.

Telecom’s head of broadband and Internet, Chris Thompson said in a media release that “with 256Kbit/s and flat rate plans now so affordable, there is little point in continuing with the slower product.”

Matthew Hobbs said of Jetstart’s demise that “to be honest we expected this to happen.” He added that Quicksilver feels the UBS structure of service is far superior to the current Jetstart system.

According to Telecom spokeswoman Helen Isbister, the key changes to the UBS proposal are:

  • The churn fee charged from ISPs when customers switch from existing services to new ones has been reduced by thirty per cent. It is now $101.75 for residential customers and $105.50 for business clients.

  • The points at which discounts kick in have been lowered to 150 and 500 new customers per month respectively.

  • Backhaul can now be purchased on a per-customer basis, instead of ISPs having to establish handover points and two megabit/s connections in each of the 33 customer areas.

  • Telecom will match marketing funds up to $15,000 for ISPs promoting the new service.

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