As reported in Computerworld, ISPs were asked to sign a contract that required all ISPs to agree not to seek a regulated alternative from the Commerce Commission, reduced the aggregate traffic cap for users from 10GB per month to only 4GB and included a number of other changes to the existing CUBS offer.

Chris Dyhrberg, Telecom's head of wholesale marketing, says providers now have a choice of staying on the existing pricing model for CUBS backhaul, or moving to the new one. He says that some providers whose customers were getting close towards 10GB a month data usage on average were not ready for such a big change so soon.

However, Dyhrberg points out that the new backhaul charging is cheaper for providers whose customers use large amounts of data. Under the existing pricing, up to 10GB is provisioned per customer, with NZ$2.85 (US$1.90) per GB levied for data usage over that limit; the new model has a lower cap, 4GB, but also lower excess charging at NZ$0.50/GB.

The cut-off point at which the new model becomes cheaper is 11.2GB average usage per month. With 20GB average usage, the provider pays would pay NZ$28.50 a month per customer if on the old scheme, but only NZ$8 on the new charging. Should the average usage reach 40GB/month, the figures are NZ$85.50 and NZ$18 respectively for the different charging methods.

Dyhrberg says it costs Telecom money to provide backhaul circuits, and that the charging is to recoup the costs. The new method is an effort to spread the costs fairly amongst providers, so that those with customers who use a lot of data pay more.