Broadband

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The National Broadband Network is reviewing the pricing for Australia's $50 billion broadband network to address growing complaints by customers about internet speeds and quality.
The chief executive of NBN, Bill Morrow, said the company is facing an image problem. Telcos have complained that it was the NBN's pricing mode that was driving up their prices, while at the same time around 15 per cent of users were facing problems.
Morrow said he was reviewing the pricing model that could include measures to give disgruntled customers a better idea about the quality of the service they were paying for. 
He said a "land grab" by retail service providers chasing market share was misleading customers about the speeds they were paying for, The Australian Financial Review reported.
"We have to take it seriously, it is causing reputational damage and it does need to get fixed and we are committed to working with the industry to get it fixed," said Morrow.
A review of the pricing model could include introducing "minimum assurance" standards for certain products, such as media streaming, to ensure customers were receiving a certain level of service. He said NBN was looking at a restructuring of the pricing mechanism.
"I am sympathetic with the many smaller retailers, in particular, who say I am stuck in this price war and I can't step up and raise my price to the end users.
"So, we are thinking can we restructure the CVC (Connectivity Virtual Circuit charge) and the AVC (monthly access charge) to have a minimum assurance of a certain quality of product ... do we introduce a media streaming product?"
NBN Co is in initial talks with broadband providers.
The CVC charge is the price NBN charges service providers for the bandwidth they want for their customers. The NBN lowered its its CVC charge to $15.25 per megabit per second from $20 per megabit per second in December last year. Under a new pricing model announced earlier this year, they will be able to get discounts based on how much CVC they purchase per end-user. 
Morrow said most NBN problems were around two issues: slower-than-expected internet speeds reported by some customers and technical issues in connecting premises. About 15 per cent of NBN customers have complained about their connections.
Just a few days back, NBN Co’s chief network deployment officer Kathrine Dyer said no premises will be left unconnected by the time the rollout is completed in 2020.
Nearly 200,000 premises <a href="https://www.urban.com.au/expert-insights/73174-nbn-to-connect-everyone-by-2020-kathrine-dyer" target="_blank">faced lengthy delays</a> connecting to the network despite the fact that the NBN has been rolled out in their neighbourhoods.
Morrow said the number of complaints was rising as new network connections accelerated, but the overall percentage had fallen. It is activating about 40,000 to 50,000 new customers a week, which will increase even more as the project is targeted to be complete in 2020.
The NBN has been swamped with complaints from customers about speeds that they say are lower than what they used to get on ADSL. 
When asked if the NBN had an image problem, he said: "I do [agree]….it is partly our fault. It is partly taken out of context because 85 per cent [of customers] are fine with this. It is the 15 per cent that is a large number because of the volumes we are dealing with. It is not just a lightly dissatisfied but a seriously dissatisfied service."
Australian Competition and Consumer Commission chairman Rod Sims said last week Telstra, Optus, TPG and Vocus could face legal action if they were found to have misled consumers about their NBN speeds.
"Most of the marketing attention is on price, not what kind of speed you are going to get," Morrow said, adding that 75 per cent of customers did not know what speed they were on.
"There is a land grab phenomena where retailers are chasing market share and classically during a land grab phase you get more discussion on price and less discussion about quality."
He said NBN was working on installation problems, particularly issues around an existing provider cutting off a customers' service before they were connected to the NBN. 
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jonathanchancellor-7SQnKwU6yx

NBN chief admits to image problem, will review pricing

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Australian Competition and Consumer Commission (ACCC) chairman Rod Sims has questioned whether NBN genuinely dealt with complaints from internet retailers about over-charging for fast broadband.
Sims expressed surprise that NBN is not considering cuts to its pricing model months after a review was ordered by NBN Co boss Bill Morrow.
NBN chairman Ziggy Switkowski recently ruled out cuts to wholesale pricing on the national broadband network, saying it would only fuel a "land grab" and take value away from taxpayers and the government, transferring it to retail service providers (RSPs).
However, RSPs are not happy with the pricing model because they say the costs for NBN are much higher than traditional internet connections and are not purchasing large amounts of capacity, triggering slow internet speeds and consumer complaints.
"I did find the comments a bit surprising in the sense that we had understood that NBN was going through a consultation process with the access seekers on its pricing and we are wondering whether that consultation process is real or not real," Sims was quoted as saying by The Australian Financial Review.
In July, NBN chief executive Bill Morrow had announced a <a href="https://www.urban.com.au/expert-insights/investing/73504-nbn-chief-admits-to-image-problem-will-review-pricing" target="_blank">pricing review</a>, citing an image problem after complaints of poor speeds soared.
Sims said he would not make a decision on updating the NBN's special access undertaking, a key part of the way the competition watchdog regulates pricing, until NBN's pricing consultations made progress. 
The update needs to be made to accommodate new technologies as part of the rollout of the Coalition's model for the NBN, the AFR said.
"We certainly thought their shareholder [the federal government] was interested in there being genuine negotiations," Sims said. 
“We're still expecting genuine discussions, genuine consultation.
“Our definition of consultation is not one-way. Consultation means you listen, respond and react."
Meanwhile, complaints are on the rise as the NBN rolls out to metropolitan areas and RSPs refuse to buy more capacity because it hits their margins compared to DSL connections. 
Consumer frustration is rising because by the top speeds advertised by RSPs are not being achieved in peak times, and in some cases is worse than pre-NBN speeds.
In August, the ACCC gave RSPs three months to clean up their "terrible" NBN advertising. 
It will also begin publishing speeds achieved, versus advertised speeds, on plans from RSPs. 
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ACCC chairman sceptical of NBN efforts to deal with pricing complaints

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<img src="https://counter.theconversation.edu.au/content/81360/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Rod Sims, Chairman of the Australian Competition &amp; Consumers Commission (ACCC) has signalled that it is going to take a tougher stance against internet service providers like Telstra, Optus and Vocus about misleading consumers about NBN broadband speeds.
In particular, Sims has said that Telstra’s continued use of terms like “Very Fast” and “Super Fast” to describe theoretical, but often unobtainable, broadband speeds need to stop. 
The ACCC has indicated that it is likely to bring court cases before the end of the year if these practices don’t stop.
In a speech at the Unwired Revolution Conference, the ACCC talked of the findings of a review into the Australian communications sector. In particular, he drew attention to the fact that the Australian public were opting for slower speeds on the NBN mainly because ISPs were unwilling to sell faster speeds because of the high costs of the connections (CVC) provided by NBN Co. 
The pricing of wholesale connections provided by NBN Co are set in order for them to recoup money that has been invested, in large part by the Australian federal government, and so unless NBN Co directed to do something different by the government, the situation is unlikely to change. 
Part of the problem is the lack of transparency with regard to the extent of the problem of NBN customers not getting what they thought they had paid for. Many properties that are being supplied with a Fibre to the Node (FTTN) connection may never be able to get the fastest connection plan of 100 Mbps because they are too far from the node. As the chart below shows, speeds of 100 Mbps can only be achieved if the house is within 500 meters of the node.
<a href="https://www.propertyobserver.com.au/images/2017/07/21/file-20170720-23980-fdpmr7.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/07/21/file-20170720-23980-fdpmr7.png" alt="">
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FTTN speed slows with distance from the node. NBN MTM
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A map of properties in Australia highlights that 2 houses on opposite sides of a road can have very different maximum speeds because of the nodes they are connected to. Telstra has previously admitted that some customers were sold plans for speeds they would never be able to attain at their premises.
<a href="https://www.propertyobserver.com.au/images/2017/07/21/file-20170720-23983-c8g9d0.png" target="_blank">Click to enlarge</a>
<h4><img src="https://www.urban.com.au/images/2017/07/21/file-20170720-23983-c8g9d0.png" alt=""></h4>
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NBN street map showing distance from node and calculated speed. NBN MTM
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In addition to this, there are the number of connections to that node and in particular the capacity of the ISP to handle peak demand by having spare CVC capacity. There is also other factors that would affect a property’s connection including the state of the copper wiring between the node and the house.
What the ACCC wants ISPs to do is to tell customers not only what the theoretical maximum speed may be for their property using a given technology, but also what the speeds may drop to during peak demand. 
NBN Co has this data and could make it public, but it won’t because it claims that it is the responsibility of the ISPs to tell their own customers. Shadow communications minister Michelle Rowland has filed a freedom of information request for the NBN data of theoretical speeds for each property.
The ACCC is recruiting volunteers to install special hardware and software to monitor speeds and quality of internet connections at their homes. The results of a pilot trial reported in 2015 showed that the problems with peak demand and variability of internet speeds existed on pre-NBN internet services like Telstra’s HFC cable service. As the figure below highlights, even fibre to the premises (FTTP) connections from one provider varied dramatically, dropping significantly every evening.
<a href="https://www.propertyobserver.com.au/images/2017/07/21/file-20170720-23980-dpxp0o.png" target="_blank">Click to enlarge</a>
<h4><img src="https://www.urban.com.au/images/2017/07/21/file-20170720-23980-dpxp0o.png" alt=""></h4>
<h4>
Average download speed of FTTP connections. ACCC
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Whilst the data that the ACCC is collecting will be useful and will ultimately assist in highlighting ISPs that are not providing promised services, it would be far better if NBN Co provided this data publicly in the first place. 
If the politics and economics of the NBN means that consumers are going to mostly stick to slower speed plans, many of the proposed economic and social outcomes that were originally envisioned will not be realised. Whilst it may represent a slightly better situation for some people who currently have a poor connection via ADSL, it is hard to justify the AUD 20.3 billion that has been invested by the Australian government in the network so far.
<a href="https://theconversation.com/profiles/david-glance-148" target="_blank">David Glance</a> is director of UWA Centre for Software Practice, University of Western Australia and author for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
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jchancellor-FAypfDUnLy

The ACCC threatens to take Telstra and other ISPs to court over misleading NBN speeds

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<img src="https://counter.theconversation.edu.au/content/75780/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
ABS figures show that Australia's appetite for faster broadband is growing apace.
The Australian Bureau of Statistics’ latest figures on internet activity in Australia show a huge jump in the number of people with advertised speeds of greater than 24 Mbps (that’s megabits per second, a measure of data transfer speed).
That trend is significant because it suggests that Australia’s appetite for faster broadband is growing apace, and that the NBN may be helping to drive adoption of higher speed internet.
Starting from Dec 2014, the number of subscribers in Australia with internet advertised as being capable of 24 Mbps or greater rose from 2.3 million to 7.8 million. Or, expressed another way, from 19% of all internet subscribers to 58 eprcent of all subscribers.
(It’s worth noting that the growth is in people who have signed up to packages that advertised internet speeds capable of reaching 24 Mbps. That’s not to say that speed is actually delivered all of the time; there is variation and one doesn’t always get the advertised speeds.)
<a href="https://www.propertyobserver.com.au/images/2017/04/13/Untitled-1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/13/Untitled-1.jpg" width="700" height="471">
<div class="dw-chart-notes">ABS data show that by 2016, about 58% of all internet subscribers in Australia had internet advertised of being capable of 24 Mbps or higher. Dotted lines signify interpolation between values where data is missing.</div>
<div class="dw-chart-notes">Source: ABS Cat 8153.0 Internet Activity and NBN Co Strategic Review Report 2015</div>
<div class="dw-chart-notes"> </div>
<div class="dw-chart-notes">
This increase is due, in part, to the roll-out of the national broadband network (NBN) and access to broadband at higher speeds – but that’s not the whole story.
True, the number of NBN subscribers over the same period rose rapidly from 322,000 to 1.7 million but that doesn’t explain the other 5.5 million subscribers who moved to faster broadband in that time.
Looking at the types of connection, there was an increase in the number of subscribers using internet delivered by fibre and fixed wireless. This tallies with what NBN data show.
<a href="https://www.propertyobserver.com.au/images/2017/04/13/Untitled-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/13/Untitled-2.jpg" width="700" height="394">
The number of fibre connections increased to more than 1.4 million connections, which is an increase of 122% in the year between December 2015 and December 2016.
Source: ABS Cat 8153.0, Internet Activity,
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It’s likely that with the advent of the NBN and its standardised speed tiers, internet service providers started offering services that were on a par or better than those being offered on the NBN. Competition may be at work, and the technology itself is improving.
However, data reported by cloud computing services firm Akamai in their State of the Internet reports – frequently cited by the press – showed Australia’s broadband to be woefully behind most other developed countries.
Indeed, in the same time that Australia saw a huge increase in subscribers on internet speeds of 24 Mbps and above, Akamai was reporting that average internet download speeds had increased by a mere 27%, an increase to an underwhelming 10.1 Mbps. That puts Australia down the list in terms of average speeds.
With ABS data showing that 58% of the population is now on plans capable of delivering speeds of 24 Mbps and above, such a paltry rise in the average internet speed is somewhat surprising.
<a href="https://www.propertyobserver.com.au/images/2017/04/13/Untitled-3.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/13/Untitled-3.jpg" width="700" height="437">
Dotted lines signify interpolation between values where data is missing.
Source: Akamai State of the Internet Report
It is, of course, possible that the advertised speeds of Australian internet plans are, too often, misrepresenting the true speeds available.
The way that Akamai calculates its figures is not spelled out in its report – it says that it “includes data gathered from across the Akamai Intelligent Platform”. So perhaps it would be wise to take claims about Australia’s rank in the world on internet speeds with a hefty grain of salt. Things may be better than we are being told.
More data is needed to make sense of the impact of the shift of subscribers to higher speed internet. Projects like the Australian Competition and Consumer Commission’s plan to “test and report on the typical speed and performance of broadband plans provided over the NBN” will help build a more accurate picture.
 
David Glance is the Director of the UWA Centre for Software Practice, a UWA research and development centre and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/david-glance-148" target="_blank">here.</a>
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Three charts on Australia’s growing appetite for fast broadband: David Glance

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
A National Broadband Network (NBN) based on Fibre to the Premises (FTTP) was, and still is, the right answer for Australia’s broadband needs.
Compared to the original FTTP-based NBN, we are currently on the way to a much poorer performing broadband network with a mix of FTTP, fibre to the node (FTTN) and other technologies. It will entail increased long-term costs and be completed at about the same time as the original project would have been completed.
Around the world, the direction in which new builds of fixed broadband networks are headed has become clear. The world is increasingly moving towards FTTP. As a consequence, advances are being made in FTTP technology that make it cheaper and easier to deploy.
These developments, which have taken place in the last few years, have only reinforced the rationale for basing Australia’s NBN on FTTP.
<h2>Not too late to change</h2>
It is not too late to change the current direction of the NBN, but that change would need to be made in a controlled and managed way to ensure the project is not subject to another major disruption.
Why has it been so hard to get at the facts regarding the costs and timing of the FTTP-based NBN? The answer, as we all know, is that the NBN project has been from its inception a contentious political issue.
Initiated by the Labor party back in 2009, it was a good example of a government being courageous enough to initiate a large and complex project for the public good.
The original NBN was a visionary project and would have created a valuable asset for the Australian public. It didn’t take long, though, for the attacks on the project to start.
But the fact – confirmed this week - remains that over the past three years, Australia’s world ranking for average peak connection speeds dropped from 30th to 60th. We shouldn’t have been happy with being ranked 30th in the first place.
Yet the drivers of faster speeds and capacities for fixed broadband have not abated. Quite the contrary.
The latest Australian Bureau of Statistics data shows internet usage has been increasing over the years, from 191,839 terabytes downloaded in the month of December 2010 to 1,714,922 terabytes in December 2015. That’s nearly a ninefold increase in five years.
What’s more, Cisco is forecasting that global broadband speeds will nearly double between 2015 and 2020.
<h2>From megabits to gigabits</h2>
That’s why the debate in the United States and Asia is about gigabit per second speeds, not about whether 25MBps or 50Mbps is sufficient.
It is a bit surprising that we continue to hear the argument that nobody is buying a 1Gbps service today, so why build a network that can deliver that much speed? 25Mbps to 50Mbps is more than enough.
This has been a mantra for the Coalition, and it was supported in the view by the Vertigan committee, which was set up to review the NBN. In its final report, the committee assumed that the median household would require only 15Mb/s by 2023.
It seems especially curious that a government that styles itself as the innovation and infrastructure government should argue this. Because this argument betrays a complete lack of understanding of what the original FTTP NBN was all about.
It was about providing the vital infrastructure that Australia needs in order to remain competitive internationally in the 21st century.
It is arguable that, today, most homes and businesses can get by with speeds of up to 50Mbps. But already there are many home-based businesses that can’t and are demanding 100Mbps or more.
Gigabit services are just starting to emerge elsewhere in the world, so the applications that can take advantage of this type of speed are in their infancy. But we all know they are coming.
To spend billions of dollars on building a major piece of national infrastructure that just about meets demand today, but doesn’t allow for any significant growth over the next ten or 20 years is incredibly short-sighted.
It is such a pity that so much time and effort has been spent on trying to discredit and destroy the original FTTP-based NBN plan. Equally, it’s a pity the Coalition has put its faith in what has turned out to be a short-sighted, expensive and backward looking multi-technology mix (<a href="https://www.nbnco.com.au/blog/the-nbn-project/what-is-the-nbn-multi-technology-mix">MTM</a>) plan based on copper.
The nation is going to be bearing the consequences of those decisions for years to come – in higher costs and poorer performance in an area that is critical to its long-term future. Betting tens of billions of taxpayers dollars at this time on copper access technologies, as the Coalition has done, is a huge miscalculation.
The number of telcos still focussed on squeezing out the last bit of value from their old copper networks continues to decrease every year. Even the UK’s BT, which has been the poster child for FTTN, is now planning to increase its FTTP deployment, in part as a response to pressure from the UK regulator, Ofcom.
<h2>Come the election</h2>
No matter what the outcome of the upcoming election, the original vision of a broadband network built largely on a future-proof FTTP solution is now going to happen over a longer period and at a greater cost to taxpayers.
The Coalition is likely to continue with the FTTN and Hybrid fiber-coaxial (HFC) deployments and the peak funding is likely to be in the range of A$49 billion to A$56 billion. It will take a “heroic” effort, as NBN Co’s chairman Ziggy Switkowski has said, to have the network completed by the end of 2020.
Just when the FTTN equipment will need to be upgraded to provide higher speeds is an unknown but given what is happening overseas, it is unlikely to be very long. No one has yet made public the estimated costs of this upgrade.
Should the Labor party win the election, we can expect a managed transition from FTTN to FTTP, increasing the number of premises served by FTTP by about two million.
Given what we now know about the deployment costs of FTTP versus FTTN, I would not expect this transition to FTTP to make a big difference to deployment costs or timing of completing the NBN. It will result, however, in a network that is a step closer to the desired end state.
While it is impossible to turn back the clock on the MTM, it is still possible to make changes to the current direction, without introducing another major disruption. Changes that will get us closer to building the right network for the long term.
It is becoming increasingly obvious, especially to customers, that an NBN based on FTTP is a much better network than an MTM-based NBN from every angle – speed and capacity delivery, maintenance costs, reliability, longevity and upgrade costs.
An FTTP network would be a much more valuable public asset and could generate greater cash flows for the government due to lower maintenance, higher revenues and almost no upgrade costs. And it would be vastly superior in driving growth through the wider economy.
So it is a great pity that before making the shift to the MTM, the Coalition did not heed the words re-quoted by the then independent MP for New England, Tony Windsor: “Do it right, do it once, do it with fibre.”
Mike Quigley is adjunct professor in the School of Computing and Communications, University of Technology Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/mike-quigley-276502" target="_blank">here</a>.
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