NBN HFC self-install to become default

HFC installation premium for customers with existing lead-ins amongst changes in latest NBN product roadmap

The company responsible for building the National Broadband Network, nbn, has updated its product roadmap for the third quarter of 2016. Here is a summary of some of the key changes:

HFC product

nbn’s HFC product launched at the end of last month in a limited footprint in Redcliffe region in Queensland (PR044). The company also recently signed a contract with six delivery partners to upgrade and rollout the existing Telstra HFC footprint for nbn’s use.

Self-install to become default
As part of the current rollout strategy, nbn will send an installer to install the HFC Network Termination Device (NTD) at the customer’s premises when a service is ordered. However, the company plans to implement an RSP install and customer install option by the end of first and second quarter of 2017 respectively (PR112, PR129).

Once this process is implemented, nbn will begin charging customers who already have an existing lead-in a professional NTD installation a fee if they request for one.

Other HFC planned products
Deployment of DOCSIS 3.1 NTDs remain on-track for upgrade by the end of 2016 (CE045).

nbn also plans to introduce service transfers on HFC by September 2016 (PR121), as well as various diagnostic capabilities for Traffic Class 1 services.

The company does not plan to offer business grade “Traffic Class 2” tiers over HFC until 2018 or beyond (PR118).

NBN Satellite Service

ISS migration period extended
The migration of nbn’s existing Interim Satellite Service (ISS) customers to the new “Sky Muster” Long Term Satellite (LTS) service has been extended out until February 2017 (PR023). nbn had originally planned to migrate all its existing ISS customers to the Long Term Satellite solution by the end of 2016.

However, teething issues appeared to have hampered the originally anticipated activation rate — shifting the expected end date for the migration by two months.

There have been numerous reports of missed appointments, inability for NBN NTD modems to reconnect after a power reboot and most recently, the decision to retain the existing ISS satellite service after an LTS installation and retrospectively visit the customer to remove the ISS dish.

Consultation on “Managed Services Education” over Satellite
nbn is investigating the possibility of providing enhanced services for distance education students. The company has listed a number of possible products including a managed unmetered data service and multicast video broadcast services over its LTS service. Consultation on this service is expected to begin in September 2017.

Consultation on “Satellite Mobility” which could enable services like on-board Wi-Fi or Internet access for emergency services in remote areas has also been pushed back slightly to September (PR123).

Cell Site Access Service

As reported earlier, nbn concluded its initial Cell Access trial and has begun offering a Cell Site Access Service (CSAS) test service in Beaudesert, Queensland (PR039).

NBN begins second Cell Access trial

National broadband company continues to develop product to allow mobile carriers to tap into their fibre network

The company responsible for building the National Broadband Network, nbn, has released details of its proposed Cell Site Access Service (CSAS) — designed to allow mobile carriers to connect their mobile towers using NBN infrastructure.

This comes as nbn finishes their first round of trials with their customers which started at the end of 2013 and continued through till June this year. However, given the duration of this second trial which is not expected to end till July 2017, it appears that initial plans to have a cell site access product available to customers by the end of the year will be pushed back further.

Former CEO of Vodafone Australia and now NBN-CEO was once a strong advocate for the introduction of the backhaul service. However, the company recently signed a deal with TPG telecom to build out its fibre network to all of Vodafone’s cell sites.

According to the updated testing agreement, nbn will trial the CSAS at a “mobile complex” in Beaudesert, Queensland where the company has begun rolling out its fibre to the node and fixed wireless network. As part of the service, the carrier will receive a network extension quote equivalent to one from the company’s “Technology Choice Program” to extend the fibre network (FTTP) to the designated cell site.

During the trial, the company will not charge the participating carrier for this network extension or any associated costs with this service including the Access Virtual Circuit (AVC), User Network Interface (UNI), Connectivity Virtual Circuit (CVC) and Network-Network Interface (NNI) — however, it says it will intend to do so once the trial is completed.

The test agreement also makes mention of potentially co-locating the cell tower with towers used by NBN’s Fixed Wireless service as part of a facilities access agreement with the access seeker. The NBN company will also determine the network traffic class used during the trial.

The CSAS trial is expect to continue until 1st July 2017.

Source: Cell Site Access Service, Testing Agreement

The irony of NBN’s satellite numbers

After spending millions on consultants to criticise past decisions in the 2013 NBN Strategic Review, the company responsible for building the National Broadband Network, NBN Co, has repeated supposed past mistakes in a metric definition.

The review was highly critical of the former management of NBN Co when it stated that its Interim Satellite Service (ISS) had passed 250,000 premises when the satellites only had capacity to service 48,000 premises:

NBN Co has previously reported Satellite premises covered as 250,000, however the Independent Assessment considers that it is more appropriate to report 48,000 Premises Passed given the contractually limited capacity of the ISS.

NBN Co Strategic Review, Page 50

Consequently, the review revised the company’s performance figure down in the review — stating the former management had missed the target of 250k premises by 80% (page 40) by reclassifying the meaning of the metric.

Strategic Review says that NBN Co has missed their Corporate Plan target by 80% by "reclassifying" the meaning of Satellite Premises Passed
Strategic Review says that NBN Co has missed their Corporate Plan target by 80% by “reclassifying” the meaning of Satellite Premises Passed

Yet, three years later — here we are again with the company using the total satellite footprint as their headline “Premises Passed and Ready for Service” figure.

NBN Co’s weekly progress report, which provides a high-level summary of premises passed across Australia, says 404,064 premises have been “covered” by the Long Term Satellite service. Yet, in the 2016 corporate plan, the company states that satellites only has the capacity to service 250,000 premises at a time.

Following the footsteps of the Strategic Review, NBN Co will technically miss its corporate plan satellite target by around 50%.

NBN Co reports 404,064 premises covered by satellite as at 16th June 2016, yet the satellites can only handle 250,000 premises.
NBN Co reports 404,064 premises covered by satellite as at 16th June 2016, yet the satellites can only handle 250,000 premises.

The hilarity of it all

What can I say? Metrics are arbitrarily defined by those who want to portray a specific outcome. Criticism of metric definition is moot, and really occurs only when trying to pursue a line of argument intended by those writing it. The Strategic Review is an excellent example of this.

Perhaps unnoticed by many at the time, the numbers in the review favoured the Multi-Technology Mix even though there was no increase in capacity for the satellite.

The review considered only 206,000 premises passed by FY16 in the “revised outlook” — however, it magically jumped up to 340,000 premises passed in the adopted “multi-technology” case without any physical changes to the satellites.

NBN's satellite apparently passes 340k by FY16 premises in the MTM model
NBN’s satellite apparently passes 340k by FY16 premises in the MTM model
... yet in the revised outlook, only 206k premises are passed with satellite even though there are no changes to the satellite
… yet in the revised outlook, only 206k premises are passed with satellite even though there are no changes to the satellite

Remarkable isn’t it? Just goes to show how a metric can be reclassified to portray missed targets, then rapidly reclassified again to make your own rollout model look better 😉

Widespread delays plague Multi-Technology rollout

Analysis: Some areas delayed by up to 8 months, with 290k premises delayed by at least a month

The company responsible for building the National Broadband Network has updated its rollout schedule, revealing wide ranging delays of over a month in 105 multi-technology mix (MTM) rollout areas around Australia, affecting around 290,000 premises.

These rollout areas predominantly uses the Coalition’s preferred Fibre to the Node (FTTN) technology, where the company rolls out fibre to the neighbourhood and reconnects with the existing copper to the home.  Despite promising rollouts using the FTTN technology to be faster to complete, the company had reportedly been facing issues including slow rollout design approvals from power companies who will have to power the nodes in the streets.  The reasoning behind the latest set of delays is unknown.

The areas worst affected by the delay are Cygnet in Tasmania and Mornington in Victoria, with a delay of 8 months shifting completion dates from late 2016 to mid 2017.  The is followed closely by another rollout area in Mornington, Victoria as well as South Hobart and Margate in Tasmania and Garfield in Victoria with delays of between 6 and 7 months.

The rollout in Fletcher, NSW and suburbs near Claremont, Hobart, Tasmania have been set back by around 5 months.  Another 8 rollout areas, covering around 22,400 premises in parts of Victoria, Queensland, Western Australia, Tasmania and New South Wales have been delayed by 4 months.

For a full list of affected areas, refer to the table below.

Another 22 areas, not listed below, were delayed by less than a month.

Service Area Module (SAM) Locality May completion date June completion date # of months delayed Approx number of premises affected
7CYE-01 Cygnet Oct-2016 Jun-2017 8 600
3MOR-02 Mornington 12-Aug-2016 Apr-2017 8 3400
3MOR-05 Mornington Sep-2016 Apr-2017 7 2300
7HOB-12 South Hobart, Wellington Park, Fern Tree Oct-2016 Apr-2017 6 1000
7MGT-01 Electrona, Lower Snug, Margate, Snug, Coningham Dec-2016 Jun-2017 6 2000
3GAR-01 Garfield, Longwarry, Bunyip 05-Aug-2016 Feb-2017 6 2300
2NLT-01 Fletcher Oct-2016 Mar-2017 5 3700
7NWT-02 Chigwell, Berriedale Oct-2016 Mar-2017 5 2800
3TAG-04 Traralgon Oct-2016 Feb-2017 4 2600
4IGH-01 Ingham Oct-2016 Feb-2017 4 3000
6RKH-01 Safety Bay, Rockingham Sep-2016 Jan-2017 4 3100
6RKH-04 Rockingham, Safety Bay, Cooloongup Sep-2016 Jan-2017 4 3500
6ARM-02 Cardup, Byford Nov-2016 Mar-2017 4 4700
7BUI-04 Hillcrest, Montello, Park Grove, Parklands, Burnie Jan-2017 May-2017 4 1800
7HUL-01 Huonville, Ranelagh, Franklin Jan-2017 May-2017 4 2600
2GUL-01 Gulgong 15-Jul-2016 Nov-2016 4 1100
2NRN-01 Spring Farm Nov-2016 Feb-2017 3 800
7DER-04 Don, Stony Rise, Devonport Nov-2016 Feb-2017 3 3000
4SHF-02 Trinity Beach Sep-2016 Dec-2016 3 3200
2SHH-04 Flinders, Blackbutt Jan-2017 Apr-2017 3 3300
7ETD-01 East Devonport, Ambleside Dec-2016 Mar-2017 3 2600
7DSF-01 Dodges Ferry, Forcett, Lewisham, Primrose Sands, Carlton Dec-2016 Mar-2017 3 4300
7DER-03 Miandetta, Quoiba, Spreyton, Stony Rise, Tugrah, Aberdeen Jan-2017 Apr-2017 3 2900
3TAG-06 Traralgon 19-Aug-2016 Nov-2016 2 3400
2GLB-03 Run-o-Waters, Goulburn 22-Jul-2016 Oct-2016 2 2600
4WUR-09 Minyama, Buddina 08-Jul-2016 16-Sep-2016 2 3400
3MOE-03 Newborough, Moe 29-Jul-2016 Oct-2016 2 2800
2GLB-02 Goulburn 29-Jul-2016 Oct-2016 2 3200
3CRB-06 Craigieburn 29-Jul-2016 Oct-2016 2 4400
2GLB-04 Goulburn 22-Jul-2016 23-Sep-2016 2 2900
2ALB-01 South Albury, Albury 29-Jul-2016 30-Sep-2016 2 3600
7BUI-01 Emu Heights, Havenview, South Burnie, Wivenhoe, Burnie Dec-2016 Feb-2017 2 1200
3TAG-03 Traralgon East, Traralgon Sep-2016 Nov-2016 2 3100
4EDG-08 Kanimbla, Whitfield, Brinsmead Sep-2016 Nov-2016 2 2600
4FRV-01 Norman Gardens Sep-2016 Nov-2016 2 3300
7HOB-11 Moonah, New Town, Lenah Valley Sep-2016 Nov-2016 2 3000
3WBO-01 Warrnambool Sep-2016 Nov-2016 2 3700
7HOB-10 Sandy Bay Oct-2016 Dec-2016 2 3000
2BUP-03 Doyalson, Wyee, Blue Haven Nov-2016 Jan-2017 2 3100
2NRN-06 Harrington Park Nov-2016 Jan-2017 2 1800
3RYE-01 Rye Nov-2016 Jan-2017 2 4000
4BWE-01 Bowen Nov-2016 Jan-2017 2 2200
5MIC-01 Millicent Nov-2016 Jan-2017 2 2600
3CBR-64 Coburg North,Preston (Vic.),Reservoir (Vic.) Sep-2016 Nov-2016 2 1200
2BUP-01 San Remo, Buff Point 05-Aug-2016 Oct-2016 2 3200
3COL-02 Colac East, Elliminyt, Colac 05-Aug-2016 Oct-2016 2 3900
2MAI-09 Maitland, Telarah, Lorn 15-Jul-2016 09-Sep-2016 2 3300
3WAN-01 Wangaratta 15-Jul-2016 09-Sep-2016 2 3000
2MAI-06 Bolwarra Heights, Largs, Mindaribba, Bolwarra 22-Jul-2016 16-Sep-2016 2 2200
2ALB-04 North Albury, Albury 05-Aug-2016 30-Sep-2016 2 3400
2AVA-02 Avalon 05-Aug-2016 30-Sep-2016 2 2900
2MAI-01 Windella, Rutherford 12-Aug-2016 30-Sep-2016 2 1000
3MOE-04 Yallourn North, Newborough 19-Aug-2016 Oct-2016 1 3300
2MSV-03 East Bowral, Bowral 15-Jul-2016 26-Aug-2016 1 3500
2ALB-03 West Albury, Albury 29-Jul-2016 09-Sep-2016 1 3700
3SHP-09 Kialla West, Kialla 29-Jul-2016 09-Sep-2016 1 1500
2MTT-01 Mittagong, Willow Vale, Braemar 12-Aug-2016 23-Sep-2016 1 2000
4EDG-07 Earlville, Mooroobool, Bayview Heights 26-Aug-2016 Oct-2016 1 3400
3WAN-02 Wangaratta 15-Jul-2016 19-Aug-2016 1 2900
3WGU-04 Drouin East, Drouin 22-Jul-2016 26-Aug-2016 1 3400
7DER-01 Devonport 05-Aug-2016 09-Sep-2016 1 1800
2ERN-03 Green Point, Erina 12-Aug-2016 16-Sep-2016 1 3200
2KTB-02 Leura, Medlow Bath, Katoomba 12-Aug-2016 16-Sep-2016 1 3400
3WGU-05 Drouin 19-Aug-2016 23-Sep-2016 1 2800
4NEW-06 Cranley, Gowrie Junction, Torrington, Wilsonton, Wilsonton Heights, Cotswold Hills Dec-2016 Jan-2017 1 3300
2SHH-01 Shell Cove, Shellharbour, Dunmore Jan-2017 Feb-2017 1 3000
2NRN-05 Narellan, Narellan Vale, Elderslie Oct-2016 Nov-2016 1 2900
2PKE-05 Lake Heights, Berkeley Oct-2016 Nov-2016 1 3900
5GPC-05 Pooraka, Para Hills West Oct-2016 Nov-2016 1 3700
2PKE-02 Lake Heights, Warrawong, Cringila Oct-2016 Nov-2016 1 3700
3LOR-20 Lorne Oct-2016 Nov-2016 1 2500
3RMS-01 Romsey, Lancefield Oct-2016 Nov-2016 1 2700
3SUN-01 Sunbury Oct-2016 Nov-2016 1 3300
2NRN-03 Narellan Vale, Smeaton Grange, Harrington Park Oct-2016 Nov-2016 1 3800
4BDA-20 Babinda Oct-2016 Nov-2016 1 800
4FRV-03 Koongal, Lakes Creek, Nerimbera, Frenchville Oct-2016 Nov-2016 1 4300
4SAR-01 Sarina Oct-2016 Nov-2016 1 1900
6RKH-05 Waikiki, Cooloongup Oct-2016 Nov-2016 1 3700
6RKH-03 East Rockingham, Hillman, Rockingham, Cooloongup Dec-2016 Jan-2017 1 3300
6RKH-06 Waikiki, Safety Bay Dec-2016 Jan-2017 1 3500
6RKH-08 Rockingham, Peron Dec-2016 Jan-2017 1 3900
7CLT-01 Campbell Town Jan-2017 Feb-2017 1 700
5GPC-07 Mawson Lakes Jan-2017 Feb-2017 1 3600
3WDG-01 Wodonga, Leneva Sep-2016 Oct-2016 1 2700
3WAN-03 Wangaratta, Waldara Sep-2016 Oct-2016 1 1700
4NEW-09 Drayton, Harristown, Darling Heights Sep-2016 Oct-2016 1 3100
7EXE-01 Exeter, Gravelly Beach, Lanena, Rosevears, Swan Point, Blackwall Sep-2016 Oct-2016 1 900
4BUD-05 Palmwoods Sep-2016 Oct-2016 1 2100
4ROT-01 Rockhampton City, Depot Hill Sep-2016 Oct-2016 1 1400
4RED-01 Mount Cotton, Carbrook Sep-2016 Oct-2016 1 3000
4SHF-01 Trinity Beach, Trinity Park, Kewarra Beach Sep-2016 Oct-2016 1 1900
7NOL-01 Magra, New Norfolk, Lawitta Sep-2016 Oct-2016 1 2900
5BDT-20 Bordertown Nov-2016 Dec-2016 1 1600
7BIC-01 Bicheno Nov-2016 Dec-2016 1 900
5BRR-01 Berri Nov-2016 Dec-2016 1 2500
6ARM-01 Byford, Darling Downs, Haynes, Hilbert, Mount Richon, Wungong, Brookdale Nov-2016 Dec-2016 1 4000
6ARM-04 Forrestdale, Haynes, Seville Grove, Armadale Nov-2016 Dec-2016 1 3600
3MOE-01 Trafalgar, Moe 22-Jul-2016 19-Aug-2016 1 2700
6MDR-10 Erskine 27-May-2016 24-Jun-2016 1 2500
3PTO-05 Portarlington 15-Jul-2016 12-Aug-2016 1 2200
3PTO-06 St Leonards 15-Jul-2016 12-Aug-2016 1 2800
3OCG-02 Breamlea, Barwon Heads 22-Jul-2016 19-Aug-2016 1 2800
3SHP-10 Kialla 29-Jul-2016 26-Aug-2016 1 1300
7BUI-03 East Cam, Ocean Vista, Park Grove, Parklands, Shorewell Park, Cooee Feb-2017 Mar-2017 1 2900
7ETD-02 Latrobe Feb-2017 Mar-2017 1 2000

Analysis based on NBN Co’s rollout schedule, reproduced by Telstra on the Telstra Wholesale website.  A variety of sources were checked to confirm this information.

Why is HFC and FTTN still in Labor’s NBN?

The Labor party today released its NBN policy, just three weeks out from polling day.  The party has pledged to ensure around 2 million more homes and businesses will get Fibre to the Premises (rather than Fibre to the Node) — but will retain the HFC portion of the network.

I’m keeping it brief today because of exams… but one may wonder why the Labor party will not also pledge to move some of the HFC premises to Fibre to the Premises.  Further, why only shift 2 million premises to fibre?  That’s because of one word: contracts.

HFC contracts

NBN has already signed numerous contracts with various vendors and companies. Most recently, a $1.6 billion dollar contract with Telstra to rollout the HFC network.  Previously, a $400m contract with ARRIS to provide the equipment for the HFC upgrade.  Not to mention, all of the capital that has already been spent on building out the HFC IT systems (OSS/BSS).

In addition to this — the NBN company, under its Definitive Agreements with Telstra, must also retain ownership of the entire Telstra HFC network as soon as they switch on a single HFC-connected premises. That’s expected to occur within the next few weeks.

So even if the Labor party did pull the pin on the HFC network, not only will the NBN be liable for terminating contracts worth billions — it may also have to maintain a network HFC network (with Foxtel will continue to use) effectively for free even though NBN themselves won’t use it. Now that, would be absolute absurdity.

FTTN contracts

Estimates puts the build contracts signed by the end of July 2016 to be ~2 million premises (according to the leaked November 2015 IDP).  The last corporate plan puts the number of FTTN/B premises by the end of 2020 to be 4.5 million, leaving 2.5 million premises available to be switched to the Fibre to the Premises model.

Being able to switch turn around, complete new all-fibre network designs and sign contracts within one month would be wishful thinking.  This gives them around a 0.5 million premises buffer (mind you, that’s only gives them until October 2016) to turn around new designs and begin signing contracts or risk further delays.

Fortunately, there is no need to renegotiate the definitive agreements with Telstra and Optus again.  However, I’d still characterise the 2 million premises FTTN to FTTP shift as an “optimistic target”.  Good luck with the 4 month turnaround.

LNP backflip: “announcing” FTTN for West Coast Tasmania

NBN and the Coalition backtracks after facing massive community backlash for forcing thousands of homes and businesses in west coast Tasmania onto satellite

It’s possibly the height of hypocrisy.  The Government who led the charge to remove fixed-line communications in thousands of homes and business in Tasmanian West Coast communities is now “announcing” that they’re rolling out Fibre to the Node (FTTN) and Fixed Wireless networks in the townships of Queenstown, Rosebery, Zeehan and Strahan after massive community backlash.

Queenstown, the largest of the communities, already has existing fixed-line infrastructure including ADSL2+ and 4G mobile connections provided by Telstra.  The initial commitment by the former NBN-management was to rollout Fibre to the Premises (FTTP) to Queenstown, Rosebery and Zeehan.  This later changed to Fibre to the Node (FTTN) when the Coalition’s preferred Multi-Technology Mix model was introduced.

However, jxeeno blog’s analysis of the 18 month construction plan last July showed these areas were removed from the Fixed-Line rollout schedule.  It was later revealed in a Senate hearing that these towns were permanently removed after from the fixed-line rollout in favour of the long term satellite service.  This is despite the Coalition’s initiated Strategic Review modelled that the satellite beam servicing west coast Tasmania will likely be “severely oversubscribed”.

Up until this week, Queenstown remained the largest suburb covered entirely by the Long Term Satellite Service — originally intended for remote communities.

After strong community resistance arguing that their “new” national broadband network connections will be worse than their existing ADSL2+ services (in terms of latency and data allowances) and continued questioning by Tasmanian Labor Senator Anne Urquhart in various Senate hearings — it looks like for once, politics and community resistance has finally made a difference to the National Broadband Network’s so-called Multi-Technology Mix.

Now only if the broader outcry for reforming the Multi-Technology Mix is heard.

NBN technicians

Gigabit NBN: demand is there, but NBN pricing isn’t

It’s not that there’s no demand, it’s that NBN’s pricing model makes it impossible for providers to put any gigabit services to market.

There’s a common misconception that there is “no demand” for gigabit Internet services in Australia. After all, if there’s no actual customer taking up a gigabit service on the NBN — how can there possibly be any demand?

Apparently, despite providers around the world actively and successfully selling gigabit connections to speed-hungry residential customers, Australians are so “agile” and “innovative” that they see no need for higher speed connections that our counterparts in the rest of the developed world seek for.

At least that’s what the latest spiel from The Australian may lead you to think.

Of course, the paper is absolutely correct in saying that the only NBN customers on gigabit connections are “trial” connections by service providers. But what the article neglects on is the context: why Australians are always seemingly so special compared with the rest of the world. A inhibitive pricing model.

Where did the pricing go wrong?

I’ve written extensively about the issues with the NBN Connectivity Virtual Circuit (CVC) pricing model. Effectively, providers have to buy virtual bandwidth capacity (CVC) that’s shared across all^ the users from a single retail service provider (RSP).

If a provider buys only 100Mbps of CVC: at any point in time, the sum of all traffic across all users from that RSP will be capped at 100Mbps. It doesn’t matter if the provider has 50 x 100/40Mbps connection, the maximum the provider can transfer across all users is 100Mbps.

The problem is that it is set at an artificially high price to ensure revenue to the NBN company.

This means, to even consider offering gigabit plans, a provider must have enough customers at each point of interconnect to need at least 1Gbps of CVC… which comes in at $17,500 ($17.50 per Mbps before GST).

NBN will soon be introducing dimension-based discounts which will give more generous CVC discounts to providers who buy more CVC on a per-user basis, but it still puts 1Gbps residential plans in the realm of impossibility.

Let me be clear —it’s not that there’s no demand for gigabit plans in the residential market. It is that it is too cost prohibitive and far too risky for providers to offer gigabit services to consumers due to the NBN CVC pricing model.

Under the current pricing model, which to be fair to the current Government, was brought in when the NBN was first introduced by Labor… the NBN rollout must reach critical mass at each point of interconnect and have a significantly reduced cost per Mbps for CVC in order for NBN plans with speeds higher than 100Mbps to start showing up.

Providers overseas, for example AT&T, are offering gigabit services at USD$70 which converts to around AUD$100. With the current CVC model at an arguably high 1:100 contention ration (i.e. 10Mbps of CVC allocated for a 1Gbps connection), NBN costs alone would be over $300. That doesn’t even include interconnection, peering or backhaul costs.

I’ve argued in the past for a different style of dimension-based CVC pricing, where a proportional CVC contribution is paid per end user to make up for the revenue. In turn, NBN will manage the contention.

This would allow providers to offer 1Gbps plans to consumers before the rollout reaches critical mass, and increase the short term revenue for the project if there are more users who take up higher speeds. But such a radical change can’t happen without substantial industry consultation.

Regardless, it is a self-fulling prophecy to say that “there is no demand for gigabit services” when in fact the NBN pricing model is designed to prohibit gigabit services for residential connections.

^ effectively all customers serviced from the same NBN point of interconnect. There are limitations to how many users can be placed on a single CVC and which technologies can share a common CVC, but for all intents and purposes — this is irrelevant for this discussion.

Where’s the demand?

Even if the pricing issue is tacked… you might ask — why would there be demand for gigabit services? QHD content on Netflix only utilises 25Mbps of bandwidth; what applications possibly require more than that? While I can’t possibly accurately predict future applications, there is one obvious demand for high speed: productivity.

As “cloud” storage and computing becomes more and more widely used, there is increased need for burstable Internet connections. As a budding geospatial geek, say I need to transfer a large dataset from my computer to a cloud processing service (conceptually, backing up a large number of photos or videos to cloud storage would be an identical situation).

It would take me no less than 12 hours to transfer a 500GB raster dataset over a 100Mbps connection to my remote server. With a 1Gbps connection, this would reduce to just over an hour.

In this example — I don’t necessarily need the 1Gbps at all time. Perhaps on average, I need no more than a 25Mbps connection. But the productivity gains in having a burstable connection that can reach gigabit speeds when I need it to can be enormous. Rather than sitting and twiddling my thumbs for half a day to wait for my data to be uploaded, and another 12 hours to download it again, I can save some 20-22 hours all up simply by having the connection “on standby” (so to speak).

Infrastructure networks are rarely designed on an “average consumption” basis. If roads and highways, or water and power infrastructure were designed on what happens on “average”, traffic congestion, blackouts and water shortage would be a common problem during peak times.

Good power infrastructure, for example, is designed to cope with sudden demands for electricity. There is phenomena known as “TV Pickup” in the United Kingdom where there is a sudden increase in electricity demand during TV ad breaks — thanks to a large number of people simultaneously turning on the kettle across the UK.

Final words

So, this isn’t simple demand and supply here. Demand is not only driven by users… it is also a function of the NBN’s price structure.

The fact of the matter is, there is far more to the lack of gigabit services than meets the eye initially.

If we are indeed serious about the innovation nation, I call on both side of politics to put down their swords and look seriously at pricing reform for the CVC.  I seriously hope for some bipartisanship… if not at the technology front, then certainly at the pricing policy front.

NBN: Dimension-based CVC explained

Price signals to more high capacity plans and less network congestion

The NBN pricing discussion has hit full swing again.  The company responsible for building the National Broadband Network, nbn, has just pushed ahead with its proposed “dimension-based” discount on its controversial “Connectivity Virtual Circuit” (CVC) charge.

CVC is a virtual charge imposed by nbn to service providers in order to bring traffic from the “NBN network” to the service provider network (and vice versa).  This bandwidth is shared amongst all of the users on the same provider’s network aggregated at the 121 NBN points of interconnect.  You can read more about the threat of the CVC charge on nbn’s success here.

The newly introduced dimension-based discount sees greater discounts for service providers who purchase more hand-off capacity between the “NBN network” and the service provider’s network on a per-user basis.

The discounts being implemented will range from $0.50 to up to $6.00 per Mbps of CVC, depending on the average amount of CVC purchased per user.

Band-aid to solving two problems

Congestion

This discount is a very significant signal to service providers.

CVC “skimping” is a known problem for many NBN customers, whose Internet connection can grind to a halt during peak hours due to insufficient CVC bandwidth.  Especially with its widely unpopular Fibre to the Node network, NBN simply cannot afford to have negative perceptions about the performance of its network — whether it is provider-induced or indeed, NBN-induced.

This discount not only encourages ISPs to buy more CVC (reducing skimping and improving performance), it will also encourage ISPs to sell higher-speed or higher-capacity plans.  More on that in a bit.

But first — why will it solve congestion? Simply because in many cases, it is cheaper for providers to purchase more bandwidth (thereby decreasing congestion) than to retain their old per-user allocations.

Take an example service provider who provisions on average anywhere between 583 to 600 Kbps of CVC bandwidth per user.  It becomes cheaper for the provider to purchase more CVC than to use the existing bandwidth allocation:

CVC provisioned per user

CVC rate per Mbps
(with dimension-based discount)

CVC rate per user
(A) x (B)

583 Kbps

$16.25

$9.47
(same as 601 Kbps)

600 Kbps

$16.25

$9.75
(same as 619 Kbps)

601 Kbps

$15.75

$9.47

619 Kbps

$15.75

$9.75

Despite purchasing more CVC (601 to 619 Kbps), the CVC rate per user is either cheaper than or is equal to the old CVC rate thanks to the discounted rate.

Higher capacity / speed plans

This discount also encourages providers to sell more higher value plans.

A provider who exclusively sells low capacity plans will naturally have a lower amount of CVC-per-user provisioned.  This means their CVC discount is less, costing them more on a per Mbps basis than a provider who sells a more diverse set of plans.

In contrast, a provider who sells more high-speed or high-capacity plans will have a greater CVC discount. This allows them to sell all of their plans marginally cheaper than the exclusive low capacity provider, even if they’re allocating the same CVC per user.

Thus, providers who diversify and increase the customer base to have more high usage users will benefit the most from these pricing discounts.

So what’s the target CVC-per-user?

Looking at the price modelling, it’s evident that nbn is targeting around the 1 Mbps and 1.25 Mbps per user mark.  It offers the largest and most generous discounts at the 1150 Kbps mark, shaving a whole $1.42 per user by simply increasing the CVC-per-user by a mere 1 Kbps.

Reverse engineering NBN’s 2016 half-year results by combining ARPU and AVC speed tier breakdowns — we can estimate that the current CVC allocation per user across all providers is around 800 kbps.

Importantly, however, this excludes the initial 150 Mbps of CVC that NBN provides for free to service providers at each point of interconnect.

AVC Tiers (Mbps) Percentage (HY2016) AVC+UNI Cost (ex GST)
12/1

33%

$24

25/5

45%

$27

50/20

6%

$34

100/40

16%

$38

Avg AVC/UNI Revenue per user

$28.19

Price component Revenue per user per month
ARPU (HY2016)

$43.00

Avg AVC/UNI Revenue

-$28.19

Avg CVC/NNI Revenue

$14.81

Estimated Avg CVC^

~835 Kbps

^ excluding initial 150Mbps credit per provider per CSA. Assumes an NNI cost per user to be ~20¢.

Of course, the way that NBN constructs its product means that providers will always want to purchase more CVC. Whether or not they can afford it is another problem.

Going forward, NBN must maintain an open dialog with service providers to ensure that the pricing is adaptable to the bandwidth demands of Australians.  Whether it’s a complete rethink of the pricing structure or continual discounts — this pricing model is vital to the success of the network.

DOCSIS 3.1 coming to nbn at the end of the year

Company to retrospectively replace end user equipment to enable higher speeds using new cable broadband technology

The company responsible for building the National Broadband Network, nbn, has updated its Integrated Product Roadmap — revealing that it will be upgrading its HFC network termination device (NTD) to the DOCSIS 3.1 standard in the fourth quarter of 2016.

nbn is still yet to officially launch their HFC product, which is still scheduled to launch in June 2016. Last month, the company revealed at a Senate Committee hearing that they still have not signed construction contracts for the HFC rollout and the initial launch will be limited to a pilot area in Redcliffe, Queensland.

Initially, nbn will utilise DOCSIS 3.0 technology to deliver services to end users. Since HFC is a shared medium, traditionally, cable networks have heavy congestion and severely reduced speed during peak hours.

DOCSIS 3.1 promises to increase capacity through increased spectral efficiency, thus easing congestion.

In-flight satellite consultation in June

NBN will also be consulting with its service providers over “a mobility solution” which will include “a wide range of applications” including in-flight Wi-Fi connectivity, emergency services and health and education.

This consultation comes as Qantas announced it will team up with ViaSat to trial in-flight Wi-Fi services by utilising the NBN satellites on select domestic flights.

Detailed analysis of the proposal conducted by jxeeno blog found it would likely have minimal impact to existing satellite congestion due to the short periods of time a plane flies over a particular NBN spot beam.

Enterprise satellite consultation in third quarter

Separately, nbn will also be consulting on the delivery of enterprise services over its satellites. While the roadmap provides no further detail on this consultation — at the last Senate Committee hearing, company executives had alluded potential use of NBN satellites in the defense department or other enterprise applications.

NBN Mobile Backhaul and TV over fibre delayed

Initially slated for launch in the first quarter of 2016, nbn has delayed the launch of the NBN cell access service (mobile backhaul over the NBN) and its inclusion of TV signals over fibre in new developments till May this year.

Lightning Broadband: what is this shenanigans?

Is this supposedly magical wireless technology really going to supersede the NBN?

Over the recent weeks, a company branded as “Lightning Broadband” has been making waves in Australia.  It’s claiming that for $120 per month, it can deliver an unlimited 100 Mbps connection to residents using its wireless network.  But exactly how does the company plan to build its wireless network?

If you read the “technical explanation” on its website, you’ll realise that it doesn’t make sense.

The company is claiming that it uses fibre to connect to their DC.  It then says DC, in that case, means a DC-HSDPA (effectively 3G technology).  In the following paragraphs, it then goes on to explain that it doesn’t use HSDPA — but rather 24GHz microwave backhaul links followed by 802.11ac over the 5.8GHz band for the final hop to the customer.

However, if you read between the lines and interpret DC as its usual meaning of a data centre, it makes more sense.  The company is effectively using the fixed 5.8 GHz band to transmit a Wi-Fi signal to the end user.  This removes the need for hefty mobile spectrum licences that typical carriers like Telstra, Optus and Vodafone pay to secure their spectrum slice.

How much bandwidth does that give?

In Australia, the majority of the 5 GHz band can either only be used indoors or is subject DFS (Dynamic Frequency Selection) as this band has potential to interfere with radar signals.  The 5.8 GHz slice (5745-5825 MHz) is the only band that doesn’t have these limitations and is what Lightning Broadband is claiming to use.  This effectively gives a single 80 MHz continuous band for the last mile transmission.

The leading data rates and speeds of the 802.11ac standard (256-QAM, MCS 9, Guard Interval of 800ms) gives a maximum theoretical throughput of 390 Mbps.

As for real world performance?  One of the leading “point-to-point” Wi-Fi hardware providers, Ubiquiti, claims its NanoStation M5 (5.8GHz) Wireless Bridge & WiFi AP can deliver 150 Mbps. With a beamwidth of anywhere between 42 and 60 degrees, you’ll have to share the same 150 Mbps bandwidth with everyone on the same sector as you.

Not exactly lightning speed as soon as you have a dozen or so people on the network during peak times — especially when you’re selling an “unlimited” plan.

Nonetheless…

Lightning Broadband has nothing to worry for now. It’s not intended to be a mass-market product, with large number of customers. The spectrum bandwidth simply won’t support it (because, physics). But kudos to them for the concept and to help consumers get connected while the NBN is still rolling out.

At the end of the day, it can only exist in very specific areas — outer metro areas with a tall building with a willing management who will let you install your equipment on the roof. But as soon as you have some other company else do exactly the same thing in your area, you’re screwed.

This type of technology has been used for years by regional and rural folks to relay mobile broadband from a shed to get a decent mobile signal.

So no, this is not going to make the NBN redundant. But it’s a good interim solution to help a small number of users get connected while it’s still being rolled out.