New Zealand-based bandwidth wholesaler Wired Country appears to have fallen victim of its own success in Auckland thanks to customer demand exceeding network capacity.

Earlier this year, Wired Country launched a wireless Internet access service operating in the 3.5GHz frequency band, which is resold through ISP partners like Iconz and Ihug. It is currently the only residential Internet access alternative to Telecom New Zealand Ltd. wholesale and retail DSL in Auckland, with citywide coverage for customers with line-of-sight to the Sky Tower.

The service also offers full VoIP on top of internet data, prompting some customers to cut their Telecom NZ land-line in favor of Wired Country?s telephony alternative.

However, an email from an ISP that is considering partnering with Wired Country says that peer-to-peer customers are currently saturating the network. Of the six sectors, the northern, southern and southwestern ones at the Sky Tower access point are currently overloaded, according to the email, which states that Wired Country has no capacity to expand the existing spectrum to increase the amount of bandwidth.

To deal with the overloading, Wired Country is proposing the introduction of a 256k bps (bits per second) upstream speed cap and limiting the downstream as well to an unknown amount, the email says. Wired Country is also planning to install traffic prioritization equipment that will deliberately drop packets on residential connections to improve latency for business and voice customers. The wireless service will also be re-targeted as a business product rather than a residential one, and Wired Country will endeavor to purchase more frequency spectrum to alleviate the network congestion over the next four months.

Questioned by Computerworld New Zealand about the proposed changes, Wired Country CEO Neil Simmonds denies residential customers will be abandoned. He also says Wired Country can add more capacity to all sectors at the Sky Tower access point. New plans are being looked at, Simmonds says, but there has been no decision on specific offerings.

Wired Country is also using all of the government-funded Project Probe money allocated to it to expand its network, Simmonds says. The government requires providers to keep the their share of the NZ$30 million (US$21.3 million) of Probe funding secret, so Wired Country can"t reveal how much it will use for the expansion.

Jenny Longhurst, manager of strategy and operations at Iconz, says the current problems with Wired Country?s network are ?not so much due to a large number of customers being expected to use a small amount of bandwidth, but rather a group of current users taking advantage of the unlimited access plans.?

According to Longhurst, one such Iconz customer on the 2M bps plan downloaded 220G bytes of ?international data? in his first month.

An irate Iconz customer called Computerworld this month to express his dissatisfaction at paying NZ$120 a month for the 2M bps Wired Country service, yet receiving ?slower than dialup? speeds for most of the time. The customer, speaking anonymously, says Iconz?s support staff read out a statement which said the Wired Country service was overloaded and that no improvement was expected for at least four months.

Simmonds responds ?this performance is not what we want to see? when told of the Iconz customer?s dissatisfaction, but won"t comment whether it?s fair to expect customers to pay NZ$120 monthly for a high-speed service that only delivers dial-up modem performance.

Asked if Iconz would drop the monthly charge or refund customers while the Wired Country problems persist, Longhurst says no. ?Wired Country has informed service providers that it will not be dropping the price per user,? Longhurst says, and adds that due to the low margins and Iconz?s international bandwidth requirements, the provider is not able to drop prices ?significantly, if at all?.

Longhurst says Iconz will remove the unlimited access plans from its EzySurf Wired Country product and may need to look at introducing data caps for present flat-rate customers.

However, she expresses doubts that the caps would resolve the network overloading issues. ?Wired Country does not have a cap on its wholesale solution, and the majority of its retail partners do not charge for national traffic,? she says. Therefore, savvy customers may be able to get around the caps by using national traffic instead of international, Longhurst adds.