Glossary

Telecommunications Service Obligations (TSO) Regulatory Framework: Discussion Document

[ Last Updated 23 August 2007 ]

ADSL (Asymmetric Digital Subscriber Line): A common variant of xDSL technology that allows the use of copper wires to send high-speed data (e.g. high speed Internet service downloads) in a downstream direction and lower-speed data (e.g. uploading data to a Website) in the other. Lower frequency POTS signals can use the same copper line simultaneously. While ADSL was originally developed for distributing television signals to residential customers it has proved to be very popular for residential users who generally spend most of their Internet time downloading information as opposed to uploading.
Allocative Efficiency: Occurs where resources are allocated to their highest value usage. An important condition for allocative efficiency is that those who value a product more than the additional cost of producing it are provided with it, and those who value a product less than the additional cost of producing it are not provided with it.
Asynchronous Transfer Mode (ATM): A high performance switching and multiplexing (sharing) technology that utilises fixed-length packets to carry different types of traffic. ATM technology can carry multiple classes of services such as high speed local area network (LAN) interconnection, voice video and future multi-media business applications. It is widely used because of its flexibility and ability to streamline network operations with its underlying packet architecture. For example, network operators can centrally configure an ATM service to meet the bandwidth and quality of service characteristics selected by the customer. ATM systems typically operate at speeds of 2 to 155 megabits per second (Mbps).
Backbone: High-capacity system that provides connectivity for users of distributed network elements. Includes the network infrastructure.
Backhaul: The transport of signals from a point of interconnect with a service provider to an access seeker's point of presence, often over a backbone network.
Bandwidth: The physical characteristic of a telecommunications system that determines the speed at which information can be transferred. In digital systems it is measured in binary bits per second (bps) or bytes per second (Bps). A byte usually contains eight bits.
Bitstream: Refers to a stream of bits transmitted over a communications line between two devices. A bit is the smallest element of information in the digital system.
Broadband: The term broadband is generally used to refer to high bandwidth data services. The OECD defines higher bandwidth services as greater than 256kbps downstream. However, broadband is commonly understood as services from 2Mbps-10Mbps.
Broadband Access Server (BRAS): In an Internet Protocol (IP) network the broadband access server's basic function is to provide a traffic aggregation point for customer traffic to a network or applications service provider. It is also the injection point for policy management and IP Quality of Service (QoS). The BRAS is fundamental to supporting many-to-many access sessions.
Bundling: The packaging of a number of services together such that the price of the bundle is less than the price of the individual services or smaller bundled packages of those services.
Co-Location: Use of an existing site owned by another service provider for the purpose of facilitating network build out.
Constant Bit Rate (CBR): CBR is an ATM quality of service category. It is used for applications that require low loss and delay guarantees, such as full-motion video and voice where delays cannot be tolerated. In a CBR connection a constant amount of bandwidth is reserved allowing for no statistical multiplexing (sharing) gains.
Consumer Surplus: Measure of consumer welfare defined as the excess of valuation of product over the price actually paid. It is measured by the area of a triangle below a demand curve and above the observed price.
Customer premises equipment: Telecommunications devices situated in the premises of a customer.
Data Tail: The originating or terminating segment of a leased line; A service that provides an access seeker the ability to transmit data to a customer by accessing the access provider's (Telecom's) data network at any point that is technically feasible (other than at the physical level, i.e. the copper circuit). Also referred to as Partial Private Circuit.
Downstream: A transmission from a server to an end user.
DSLAM (Digital Subscriber Line Access Multiplexer): The DSLAM is located in the telephone exchange building and separates the telephone and data signals and feeds them into the appropriate networks. The low frequency band of a copper wire is used for ordinary telephone signals (POTS) and the high frequency band is used for the data signals. The DSLAM also provides aggregation capabilities between the access network and the core network. It is at the first point in the network where traffic from multiple customers is aggregated into a single network.
Digital Services Transport Network (DSTN): A national network of dedicated lines developed for the transmission of digital data between two or more sites. For example, Telecom's local data tails are generally provided via the DSTN.
Dynamic Efficiency: Achieving an efficient allocation of resources over time. Occurs where firms have the appropriate incentives to invest, innovate, improved the range and quality of services, increase productivity and lower costs through time.
End User: Defined in the Telecommunications Act 2001 as "a person who is the ultimate recipient of that service or of another service whose provision is dependent on that service."
Exchange Serving Area (ESA): Area served by a particular Telecom Exchange Building. Telecom has approximately 350 ESAs in New Zealand.
Frame Relay: A connection that provides either a permanent or switched virtual connection between two points. Uses a packet or cell based technology and can accommodate variable bit rates. As some resources are shared, frame relay connections cost less to provide that the equivalent speed point-to-point leased circuits.
Fibre to the Node (FTTN): A telecommunications architecture based on fibre cables run to a cabinet servicing a neighbourhood. Customers connect to this Cabinet using traditional coaxial cable or twisted pair wiring. FTTN allows delivery of high speed broadband services. Speed varies according to how close the customer is to the cabinet.
Fixed Wireless Access (FWA): FWA or Wireless local loop (WLL) systems are point-to-point and point-to-multipoint radio-based systems that are used in place of the traditional copper and fibre cables to connect customers to fixed network services. Many of these systems use third generation cellular radio technologies. For example, Woosh Wireless.
Interconnection: The connection of two networks thereby allowing customers on one network to connect with customers on the other network, or to access facilities of another network.
Intermediate Service: A wholesaled service that is purchased for the primary purpose of combining with other components to produce a service offered for sale to retailers or consumers.
Internet Grade: Internet-grade is a term that is used to describe the quality of a particular digital connection. Internet connections use many shared resources that are provided on a best effort basis and are only suitable for services requiring low speed/quality data, e.g. email, web browsing and online transactions.
Internet Protocol (IP): The standard for sending the basic unit of data, an IP datagram, through the Internet. Internet Protocol technology is a connectionless, packet based technology that can power the multi-service network in an efficient low-cost way.
Internet Service Provider (ISP): Commercial organisation that provides Internet access to individuals and organisations; for example, Paradise or iHug.
LAN (Local Area Network): A data communications network covering a small area, usually within the confines of a building or floors within a building; a relatively high-speed computer communications network for in-building data transfer and applications. Common LAN protocols are Ethernet and Token Ring.
Leased Circuit (aka Dedicated Circuit): Fixed permanent telecommunications connections providing capacity between two points. Are dedicated to the user's exclusive use and enable the user to send voice and data messages between sites.
Line Sharing: The use of the non-voice (high-frequency) band spectrum of an unconditioned copper cable pair telephone line for transfer of data.
Local Loop: The line from a telephone customer's premises - usually a twisted pair of copper wires - to the telephone company's nearest local exchange. The local loop provides direct access to the customer for the provision of telecommunications services. 95% of Telecom's access lines are copper cables. The Telecommunications Act 2001 defines the local loop network as "all lines, including cables and aerial lines, between a residential or business telecommunications services user's distribution point where it enters the user's building (or, in the case of commercial buildings, the building distribution frames) and the local telephone exchange distribution frame or optical fibre distribution frame or equivalent facility.
Local Service TSO Provider: A telecommunications service provider appointed through a TSO instrument to supply local telephone service.
Main Distribution Frames (MDF): A cable rack that is used to terminate external cables from the customer and the cables to the telephone exchange and other co-located electronic equipment. Jumpers (short cables) are used to connect a particular external "cable pair" to the cable to a designated piece of equipment.
Next Generation Network (NGN): A term used to refer to emerging multi-services managed IP networks: i.e. one IP network which will support many applications, for example, Internet access, voice, EFTPOS, e-commerce, video, games, and archive. At present there are several IP networks serving various services.
Operational Support System (OSS): A computer system used by telecommunications companies to manage, monitor and control the telecommunications networks. Billing, customer care systems, directory services, network element and network management are all Operational Support Systems. Service management considerations include handling new customers, service activation with subsequent service assurance.
Private Automatic Branch eXchange (PABX): A telephone exchange operated within an organisation, used for switching calls between internal lines and between internal and PSTN lines.
Packet: A sub-unit of a data stream sent over a network; it contains a header consisting of control information such as sender, receiver, and error-control data, as well as the message itself. It may be fixed or variable in length.
Packet Switched Network: A network in which data is transmitted in units called packets. The packets can be routed individually over the best available network connection and reassembled to form a complete message at the destination.
Partial Private Circuit (PPC): Refer to Data Tail.
Public Data Network (PDN): Defined in the Telecommunications Act 2001 as "a data network used, or intended for use, in whole or in part, by the public". The Act defines a Fixed PDN as (a) means a PDN, or that part of a PDN, that connects an end-user's building (or, in the case of commercial buildings, the building distribution frames) to a data switch or equivalent facility; and (b) includes the data switch or equivalent facility and that part of the overall telecommunications link within the building that connects to the end-user's equipment.
POTS (Plain Old Telephone Service): Standard, analogue telephone service over the PSTN, with an analogue bandwidth of less than 4kHz.
Productive Efficiency: Occurs where each firm in the industry carries out its activities at minimum cost and when activities are distributed between firms such that industry-wide costs are minimised.
Public Switched Telephone Network (PSTN): The switched telephone networks of the major operators, on which calls can be made to all customers of all PSTNs. The Telecommunications Act 2001 defines a PSTN as a dial-up telephone network used, or intended for use, in whole or in part, by the public for the purposes of providing telecommunication between telephone devices.
Quality of Service (QoS): A collective measure of the level of service delivered to the customer. QoS can be characterised by several basic performance criteria, including availability (low downtime), error performance, response time and throughput, lost calls or transmissions due to network congestion, connection set-up time, and speed of fault detection and correction.
Resale Service: A wholesaled service that is purchased for the primary purpose of making the service available for sale again (without any significant changes to the service) to retailers or consumers.
Retail-Minus Pricing: Pricing principle where the price is set at the retail price less the avoidable cost. Avoidable costs are those which can be avoided by not providing a particular service.
Symmetrical Digital Subscriber Line (SDSL): A DSL connection that provides equivalent upstream and downstream transmission rates over one copper wire pair for business services up to approximately 2Mbps. Useful for business applications: the equal speeds make this good for LAN (local area network) access, distributed applications, video-conferencing, and for sites hosting their own Websites.
TSLRIC (Total Service Long-Run Incremental Cost): A cost-based pricing methodology reflecting "forward-looking costs" of an efficient operator, comprising direct costs, the cost of capital, and a share of common costs.
TSO (Telecommunications Service Obligations): A set of requirements for the supply of telecommunications services by a particular service provider to meet government social objectives. The obligations are agreed in a TSO instrument between the Crown and TSO Provider.
TSO Charge: The charge a TSO Provider receives for complying with TSO requirements that is calculated by the Commerce Commission and levied on the telecommunications industry. The TSO charge recovers the cost of subsidising the supply of TSO services.
Unspecified Bit Rate (UBR): UBR is an ATM quality of service category. It is used for applications that do not require loss and delay guarantees, such as Internet access and email where delays can be tolerated. In a UBR connection bandwidth is allocated after all other service requirements have been met.
UPC: Unbundled Partial Private Circuit (Refer to Data Tail).
Upstream: Typically refers to the transmission direction from the customer premises toward the exchange or ISP.
Variable Bit Rate (VBR): Real Time Variable Bit Rate (r-t VBR); r-t VBR is an ATM quality of service category. It is used for bursty applications that require a minimum guarantee on bandwidth, cell loss level and a guaranteed upper bound on delay. This service is the foundation for compressed voice and video services.; Non Real Time Variable Bit Rate; Is an ATM quality of service category intended for non-real-time applications which have bursty traffic characteristics. This category supports guaranteed bandwidth, low cell loss but does not give any commitment on delay. It is often used for LAN interconnection.
Virtual Circuit: A both-way connection between two devices that acts as though it is a direct connection between them even though it may use more than one real circuit configuration during a single period of communication. The term is used most frequently to describe connections between two terminal devices in a packet-switching network connection. In this case, the two devices can communicate as though they have a dedicated connection even though the packets might actually travel very different routes before arriving at their destination.
Virtual Private Network (VPN): A virtual private network provides a private communications network over a shared (public) network infrastructure. For example, an IP VPN can provide secure end-to-end connections through a public IP network.
Wholesale service: A service traded between service providers. There are two basic types of wholesale service – resale services and intermediate services.

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Printed: 25/11/2009