NBN: The good, the bad and the downright unfair

The NBN Co FTTB product technology specification highlights why FTTB/N should not be part of the NBN, but the government is pushing ahead with the multi-technology mix NBN that will leave Australia behind our competitors in the race to be a leader in the global digital economy. The details are discussed in an article in Business Spectator and the result will leave you wondering why is the government pushing ahead with an obsolete technology.

Read the full article below

At the end of last year the fanfare surrounding the signing of the revised Definitive Agreements between NBN Co and Telstra overshadowed the release of NBN Co’s Fibre to the Basement (FTTB) product technical specification.

The FTTB product technical specification gives us a first look at what the Coalition’s Multi-Technology Mix (MTM) National Broadband Network (NBN) will actually provide to customers.

NBN Co’s FTTB product utilises VDSL which is one step up the evolutionary ladder from the existing ADSL that most Australians have enjoyed (or not) for the past decade. VDSL, which is to be used in NBN Co’s Fibre to the Node (FTTN) roll out, does not provide the capacity, flexibility, quality of service and capability mix available when fibre is used.

However, it does offer a range of improvements over what is possible with ADSL.

To get a better understanding of what we will receive by spending a large part of $43 billion on what's ultimately a minor upgrade to existing infrastructure, we need to investigate NBN Co’s product technical specifications.

NBN Co’s FTTN product technical specification has not been released at this time so we need to turn to the FTTB product technical specification to learn about what is to be provided over the VDSL based systems.

Multicasting only available over FTTP

A significant concern is that multicasting capability will not be made available for FTTB at this time and we should also expect this to be the case for FTTN. Multicasting is a key technology for enhanced-quality video streaming that is being provided by NBN Co over FTTP connections.

Yes, the price set for a multicast service is ridiculously high but it should come down as NBN Co and Retail Service Providers (RSP) look to increase market share and utilise the enhanced capabilities on offer from advanced technologies like FTTP.

NBN Co describes multicasting as an important capability because “As video content increasingly becomes accessed through the internet, more of your customers will have devices which receive this content via broadband. As a result, video offerings are likely to become an essential part of your broadband and voice product sets.”

“Multicast has the ability to deliver large amounts of video content to households and businesses. Standard Definition and High Definition channels can be sent at the same high quality consumers are used to from today’s Free To Air, satellite and cable TV offerings.

Using Multicast means you only need to send your entire channel line-up into each NBN Point Of Interconnect (PoI) once, to potentially reach everyone in that connectivity serving area using your video service; which could mean backhaul and cost efficiencies for your business (compared with a standard data service).”

Introduction of Traffic Classes

A key capability of the NBN is the introduction of four traffic classes to improve quality of service for RSPs targeted retail offerings. What this means is traffic for telephone calls, IPTV, gaming or business applications, including health and education, may be allocated to the appropriate traffic class, given priority and managed across the network to ensure there is a satisfactory customer experience.

The four traffic classes are described by NBN Co in the Ethernet bitstream fact sheet:

Traffic Class 1 (TC-1). Our highest priority traffic class. It is delivered as a committed information rate (CIR) with defined latency, jitter and loss characteristics. It is suitable for applications that require highly deterministic traffic parameters such as voice.

Traffic Class 2 (TC-2). A traffic class that provides support for latency sensitive, interactive applications such as video conferencing, converged business collaboration, IPTV or gaming. It is delivered as a committed information rate (CIR) with defined latency, jitter and loss characteristics.

Traffic Class 3 (TC-3). A traffic class designed to give priority to transactional data such as business applications running on a WAN. It is delivered as a committed information rate (CIR) with defined latency, jitter and loss characteristics.

Traffic Class 4 (TC-4). Our ‘best efforts” traffic class is designed for browser based applications such as the internet and web browsing. It is delivered in a range of peak speeds (PIR) that are asymmetrical.

Currently, most Australians experience NBN Co’s Traffic Class 4 and this is when traffic is sent across the internet without any quality of service or traffic class management. However traffic class management comes at a cost and Australian RSPs have been reluctant to embrace the need to provide an improved customer experience.

NBN Co’s FTTB Ethernet bitstream service will support traffic class management, however, there are several important limitations identified in Section 6 of the FTTB product technical specification.

The first limitation is that only TC-1, TC-2 and TC-4 are available for FTTB at this time. What this means is that potential high value business applications are not being supported and this limits what RSPs can offer and restricts the possibility of new innovative solutions being developed by Australian business for the global digital economy.

Another limitation is that FTTB will provide a very limited number of connection speeds and yes, the connection speeds are identified as 'up to' meaning that you could be paying for the fastest plan available which is likely to be marketed as providing “up to 100/40 Mbps” and get only 25/5 Mbps.

So what this all means is the average customer will get a very minor speed upgrade to the existing ADSL and the greater majority of customers will continue to get “best effort” traffic with low upstream speeds and because of high prices the benefits of traffic class management and improved quality of service will fail to appear.

Unfair pricing

NBN Co has introduced an unfair pricing structure in the latest revision of its product price list. FTTN/B are sold as 'up to' services, in other words, you get “up to 100/40 Mbps”. With FTTP you get 100/40 Mbps precisely.

The question that the Australian Competition and Consumer Commission (ACCC)must answer is why should NBN customers pay the same for FTTN/B as FTTP? And there can only be one answer to this question. Customers should pay for what they get and most Australians on FTTN/B will not get anywhere near the connection speeds of FTTP for the same pricing tier.

The recurring charges per billing period for the AVC 'best-effort' TC-4 and UNI bundle are:

The AVC TC-4 and UNI bundle includes access to and use of:

(i) one AVC TC-4 as per the table at section 1.1(a);

(ii) one symmetrical AVC TC-1 of 0.15Mbps;

(iii) one UNI-D in connection with the supply of the AVC to a Premises served by the NBN Co Fibre Network or NBN Co Wireless Network or one UNI-DSL in connection with the supply of the AVC to a Premises served by the NBN Co FTTB Network; and

(iv) one UNI-V (where available) in connection with the supply of the AVC TC-1 to a Premises served by the NBN Co Fibre Network.

While there are other concerns with the current pricing structure the attempt by NBN Co to equate FTTN/B products with FTTP is unacceptable.

The potential difference in quality, performance and customer satisfaction with FTTN/B and FTTP means that the ACCC must ensure that FTTN/B are priced substantially below FTTP and using more tiers than provided in the pricing table.

Why should a customer on a 100/40 Mbps FTTN/B $38 price tier that is operating at about 25/5 Mbps pay more than someone receiving close to 50/20 Mbps on the $34 price tier?

Not only are broadband charges higher in Australia than most of our competitors for leadership in the global digital economy but it's clear that the practice of offering a substandard obsolete technology at rip-off prices looks set to continue.