John Linton
.......two completely different things that bear no relationship to each other.
I don't know whether its the result of month of talking only to real people while on holidays in rural England or the jaundiced eye with which I have had to look at so many situations in the week or so I have been back in Australia but the award for most lies in a single brief newspaper article must go to Internode's spokesmen in this particular article (assuming they were reported correctly):
http://www.pcauthority.com.au/News/157579,undersea-cable-ushers-in-hope-for-new-era-of-bigger-data-allowances-for-internet-users.aspx
Now the head line of the article describes the actuality correctly -"bigger data allowances" - but this is the final result of months/years of hype about the 'new' Pipe cable signaling the era of lower ADSL plan prices. Fair enough - there was never any chance of lower ADSL plan prices from ISPs such as Internode and iinet (let alone Telstra or Optus) but for almost two years that has been the claims by at least iinet and Internode. It doesn't really matter because, of course, the assumption is that no-one who reads statements from such people ever remember what they previously said.
But how stupid must they think their customers and other readers of their statements are to think they can get away with the nonsense quoted in this article? Why do I say such an unkind thing? Well.....:
"Internode spokesperson John Harris told PC Authority
that the move is "mostly about value for customers" and not solely a
cost cutting exercise, even though the PPC-1 has the potential to
greatly reduce the price paid per megabit for wholesale data."
Why not? It is very obviously a "cost cutting exercise". Why has it been trumpeted for two years as a way of obtaining cheaper international IP transit if it isn't a cost cutting exercise? Why do it if it doesn't provide cost benefits? Why the attempt to disguise the fact that Internode (and iinet et alia) have constantly been saying in the press for two years that it will "massively reduce costs of IP" and will result in lower prices to the end user? The there's another equally silly statement:
"Internode's
Managing director Simon Hackett is more than happy to pass on the
savings to his customers. "We're passing on the PIPE benefits to
customers by increasing download quotas across the board", Hackett said."
and:
"Michael
Malone, Managing director of Australia's third largest ISP, iiNet said
that they were already one step ahead of Internode. "We increased
quotas on many retail and business plans", Malone told PC Authority."
You just have to laugh out loud at this total misrepresentation of the truth. How is increasing someone's quota by up to 20 gigabytes a month delivering them any better value? The simple answer is that - it doesn't deliver better value in any way......unless you think that on this particular day everyone of Internode's and iinet's customers suddenly found a need to download what for the majority of them would be more than double what they downloaded previously it is not delivering value it is simply a totally cynical way of saying :
"hey, we just reduced our operating costs by millions of dollars a year but you get none of the benefits of that"
Or you could look at it another way if you wanted to take the view that most ADSL users want to increase their internet usage by more than double (or at least by 20 gigabytes a month as claimed by Internode). Exetel, a much smaller company than either iinet or Internode of course, now pays around 30 cents a gigabyte for international IP traffic and expects that to fall to less than 25 cents per gigabyte by Christmas. If Internode was genuine in passing on the wind fall cost savings it claims it has just made it would simply reduce its plan costs to provide downloads at a 100% mark up on its new, claimed much lower, IP costs - which in the case of its current "30 gb plans" would be reduction of a minimum of $A5.00 a month. The 'justification' not to expressed as:
"And
while Internode isn't jumping to cut prices, they're just as keen to
improve broadband value. The cost of running an ISP still costs as
much, as John Harris explained, but with a high speed international
data cable getting things done more efficiently, the game shifts to
providing extra data value, rather than reducing the costs of running
an ISP.
"It doesn't reduce your helpdesk, your DSLAMS, etc. The real benefit was the extra data for the same price", Harris said."
No sh** - but it very much does decrease your IP costs so what relevance does introducing other costs have on the issues? (Presumably those other costs continue to fall as greater economies of scale are reached?). None whatsoever unless you are trying to hide the fact that you are desperate to take a windfall cost gain for reasons undisclosed. There is NO benefit from increasing the included download in a plan by a large amount unless there is a range of plans that allows a user to DOWNgrade to a lower priced plan for the same amount of data he/she actually used in a month. There is no problem at all in a commercial company improving its monthly/yearly profit by buying from its suppliers at lower prices. Trying to explain why the promised customer lower plan prices haven't happened by lying flim flam isn't an appropriate thing to do.
So the actions of Internode and iinet will make this claim by Pipe a nonsense:
"PIPE International chairman Bevan Slattery hailed the new cable as sufficient motivation to cut ISP costs throughout Australia,"
Nothing to see here in terms of lower ADSL pricing.....perhaps the reason is........ that SX IP bandwidth is already offered at a lower price than the vaunted for years Pipe price?