NBN may do away with the current per-Mbps connectivity virtual circuit charge for a tiered option.
In their latest Product Roadmap for October 2015 — the company responsible for building the National Broadband Network, nbn, has indicated that they will begin consulting with service providers to change the way the controversial Connectivity Virtual Circuit (CVC) charge is structured in November.
Connectivity Virtual Circuit (CVC) is a virtual charge imposed by NBN to service providers to offload end user’s traffic from the NBN network into the service provider’s network.
After their first round of consultation in July last year, the company had decided to drop the from $20.00 per Mbps to $17.50 per Mbps (excluding GST). The company will now conduct a further consultation for introducing Dimension-Based Pricing for CVC for “eligible customers”.
Dimension-Based Pricing would effectively provide service providers tiered of Connectivity Virtual Circuit based on NBN’s modeled usage. As an example, standard internet connections may use an average CVC tier where as a more bandwidth-heavy application would use a higher-capacity CVC tier.
This is in addition to the cost of physical interconnect connection between the provider and NBN (called the Network-Network Interface, NNI) plus the cost that NBN charges for the link between your home and NBN’s point of interconnect (known as the Access Virtual Circuit and User-Network Interface, AVC/UNI).
The company also revealed in their Product Roadmap that they will begin consulting service providers about their future Fibre to the Distribution Point product offering in November.
Dirt-cheap printers, sky-high ink costs. Australia’s prepaid mobile broadband market is replicating the printer industry’s business model.
When you compare monthly mobile broadband plans with the starter kits you can get at your local supermarket or technology store, you would find an unfortunate truth. Starter kits, often including a Wi-Fi 3G modem, are comparatively cheaper than your monthly access cost.
Last month, I saw an excellent deal. I bought two Vodafone 3G Pocket Wi-Fi + 3GB SIM (with a bonus 8GB SIM with 90 day expiry) for a mere $38 from Harvey Norman. That’s 22GB over a total of 240 days.
Compare that with the closest prepaid plan in terms of cost: the $40 Vodafone Mobile Broadband recharge — which will only give me 4.5GB over 40 days.
The 22GB offer Vodafone currently provides online is $200, albeit with an expiry of 365 days. That’s a whopping 5x more expensive!
Invoice summary showing my Vodafone 3G Modem + data purchase. 22GB for $38!
Purchase option
Total data
Expiry
Total cost
Cost per GB
2 × Vodafone 3G Pocket Wi-Fi + 3GB (+ bonus 8GB)
22 GB
240 days
$38
$1.73
1 × Vodafone $40 MBB Recharge
4.5 GB
40 days
$40
$8.88
1 × Vodafone $200 MBB Recharge
22 GB
365 days
$200
$9.09
We haven’t even accounted for the cost of the Wi-Fi modem that comes with the starter pack. A Huawei-made Vodafone Pocket WiFi R207.
Original packaging of the Vodafone Pocket WiFi 3G
This is perhaps one of the most extreme cost differential examples — however, this same phenomenon is replicated across all major carriers. Telstra and Optus both have the same tactic of selling mobile broadband dongles for below-cost and bundled with a generous one-off data bonus. Sounds awfully like a printer company, am I right?
What’s the catch?
The business model that the major carriers are using promotes the mass purchase of SIM cards and mobile broadband devices. What’s the problem?
Firstly, Australia is fast running out of mobile phone numbers with the ACMA projecting phone numbers will be exhausted in 2017. If each person in Australia simply buys new SIM cards with new phone numbers to take advantage of these deals, the depletion of mobile phone numbers further accelerate. Luckily, the 05xx number range has been reserved for future expansion — nonetheless, getting new numbers for each new SIM purchased is unsustainable.
Secondly, it’s an account management nightmare. Each new SIM would need a new account login on the mobile carrier’s website to check and keep track of data usage. It would be a pain to have to change this every month. Also, Australian’s are expected to declare how many phone services they have active under their name — this could be massive if we end up buying new SIMs every month.
Lastly, we have the same environmental issues as printers — we’ll end up with far more mobile Wi-Fi modems that we’d possibly need. Personally, I’m currently in posession of 5 mobile broadband modems while I’ve been taking advantage of these deals — three Telstra modems and two Vodafones. Most of these — I don’t use and to be honest, I’d be happy to give away. It just goes to show how much waste there is in electronics these days.
And the printer…
Yes. I also bought a printer. Harvey Norman was also selling a multi-function inkjet printer for $17 that I couldn’t resist but buy.
Harvey Norman selling the HP Officejet 2620 All In One Printer for $17
The printer even has clicky buttons, an LCD screen, fax functionality and a document-feeder scanner.
I’m yet to use any of its ink, I bought it purely for its document-feeder scanner to move towards a paper-less environment. I think I have broken their business model.
Did we miss an opportunity to get an FTTP+HFC rollout? Figures from NBN’s stragegic review suggest a two-stage FTTN to G.Fast upgrade could now cost more than if we just stuck with FTTP
Even before they’ve switched on a single Fibre to the Node customer — nbn, the company responsible for building the National Broadband Network, has been busy spruiking their plans to trial and eventually upgrade Fibre to the Node to G.Fast technology to the media.
However, acccording to estimates made in the company’s Strategic Review, building the Fibre to the Node network now and upgrading to Fibre to the Distribution Point (FTTdp) using G.Fast technology would have saved a mere $2 billion dollars compared with a “radically redesigned” Fibre to the Premises rollout. Since then, blowouts in the Fibre to the Node rollout would have surpassed the said savings of $2 billion dollars.
Fibre to the Node: blowouts
The company had straight-out refused to publish a raw Fibre to the Node cost-per-premises figure in their Strategic Review. However, on page 101 of the Strategic Review, the company estimated that it will cost around $2 billion dollars to roll out 3.6 million premises using Fibre to the Node architecture. This equates to approximately $555 — $833 per premises (assuming range of $2 — $3 billion dollars divided by 3.6 million premises).
The FTTdp upgrade cost breakdown in the Strategic Review
According to the latest 2016 corporate plan, this cost has blown out to $1,600 per premises or a net increase of $767 — $1,045 per premises (excluding infrastructure lease which was not attributed to CPP in original calculations).
Current cost-per-premises projections as stated NBN’s 2016 corporate plan
nbn has also increased the FTTN/B/dp footprint from 3.6 million premises to 4.5 million. From Fibre to the Node cost per premises alone, this has attributed to a net blowout of between $3.5 to $4.7 billion dollars from Strategic Review cost estimates — potentially overriding the savings of $2 billion envisaged in the VDSL–G.Fast upgrade path.
Fibre to the Premises: better than expected?
The issue with this is of course, comparing FTTN costs with costs that we’d never know. We will never know exactly how much a “radically redesigned” FTTP rollout would have costed — but we can make estimates:
Comparing NBN’s estimates for Fibre to the Premises (Revised Outlook) in the Strategic Review with current Fibre to the Premises, figures shows they had over-estimated the capital expenditure of the FTTP rollout by about 11%: ~$4,100 in the Strategic Review ($1,997 for LNDN plus $2,100 for the activation, equating to $4,097 — see pages 62 and 64 of SR) vs $3,700 in the 2016 Corporate Plan. This suggests better-than-expected costs in the Fibre to the Premises rollout costs.
But it’s too late anyway
But unfortunately, the company has already invested billions into developing the so-called Multi-Technology Mix and has a task to rollout Fibre to the Node thanks much to Government policy. These are costs that taxpayers will never be able to recover, meaning we may have missed another opportunity to rollout FTTP in the majority of the now-FTTN footprint.
As the cost of the copper-based network increases, the comparative investment in those technologies become less attractive. Speed and capacity upgrades require installing more active equipment in the field and also extending fibre closer to the home. Thus, incremental upgrades and ongoing operating expenses on a copper-based broadband network is far greater than those on a fibre-based network where only tail equipment has to be swapped out.
If the savings in building a copper-based network are relatively small in initial capital expenditure — eventually, the economics will reverse and bite back.
Since Fibre to the Node will now span the majority of the network, the only logical upgrade path for those areas would now be FTTdp because of all the capital costs sunken into rolling out FTTN. But don’t think for a second that it will be actually cheaper than rolling out fibre all the way to the home in the first place.
In summary, if the Strategic Review’s figures are to be trusted, we may have missed yet another opportunity to get a FTTP network, albeit “radically redesigned” in nbn‘s vernacular. Calculations suggest it could have cost less than what the current FTTN rollout plus a G.Fast upgrade in 2020 will cost. Plus, the company has also proved at almost every instant that they had underestimated any non-FTTP costs in the strategic review and helpfully inflated any FTTP costs higher than actuals.
What are your thoughts? The analysis, of course, makes assumptions based on the available data. I think it’s a real pity how it seems time after time, taxpayer’s money ends up being wasted based on a false premise in a rushed report.
Service provider feedback forces NBN to waive new charges to be introduced with the launch of the Fibre to the Node product.
Citing concerns by some service providers, the company responsible for building the National Broadband Network has decided to temporarily waive or cap a number of new charges “minimum period of 12 months” that were originally scheduled to be introduced with Fibre to the Node installations.
Professional filter installation: capped
Amongst the charges changed is the “professional installation” charge for Fibre to the Node and Basement areas, where a technician installs a central filter at the premises to reduce copper line interference.
Initially, nbn had wanted to charge service providers and in turn, end users, a variable cost depending on the number of hours the installer took to complete the installation. The filter installation during the initial order would have had a base cost of $160 and the company would charge a further $75/hour for every hour beyond two hours plus any additional material costs. Filter installations requested after the initial standard installation would have cost at least $235, plus every hour beyond three hours.
Extract from WBA 2.2 showing original charges for FTTN professional installations
nbn says that some service providers “expressed concern that the basis on which NBN Co is going to charge for Professional Splitter Installations (i.e. on a time and material basis) would make it difficult for them to establish fixed prices for their retail offers.” The company has now introduced capped pricing at $160 and $235 respectively, and will not charge for additional hours incurred or extra materials used in the installation.
New capped pricing for the professional fibre to the node installations
Other costs waived
In addition to the changes to the filter installation, nbn has waived its right to charge service providers a number of other ancillary charges. A number of service modification have been waived entirely such as equipment removal, modifications and repair. These were originally charged at $75/hr for a minimum of 3 hours. Service management charges for missed appointments, late cancellations, incorrect technician callouts and so-called “no fault found” callouts have also been waived for the FTTN and FTTB network.
For a full list of charges waived, check the Ancillary Charges Waiverdiscount notice and the Professional Splitter Installation Charges waiver letter published on the nbn website.
4G/5G mobile growth will not undermine the NBN business case. It should actually help boost NBN revenue.
(opinion) Phone towers aren’t magical. They need to be connected back to a datacentre in order to process calls, send texts and most importantly — connect you to the Internet.
There’s no doubt that one of the greatest cost barriers for mobile phone companies to increase coverage is the cost of backhaul to mobile phone towers.
Telstra has always had a natural advantage in the mobile coverage race due to its extensive fibre network laid out between its telephone exchanges. Optus is not too far behind, but certainly lacks the robust network Telstra has especially in rural areas.
But let’s think for a moment about Vodafone, or potentially a theoretical fourth national mobile carrier which may or may not start with the letters TPG. The National Broadband Network can play an extraordinary role in helping these companies not only expand their network coverage size, but also create denser and higher bandwidth coverage to ease congestion.
Dark fibre vs managed services
Traditionally, a carrier may opt to roll out their own fibre to a tower — but that could come at a huge capital cost which may not be viable for carriers with comparatively lower subscribers.
Alternatively, they may rent dark fibre or purchase a managed transit service from the likes of Telstra or Optus and pay back a recurring fee for the amount of bandwidth they want delivered through the service. Unfortunately this means even if only a small number of customers are connected to a tower at a given time, the carrier would have to pay for the full bandwidth they’d purchased from their transit provider.
How the NBN could change the game
But the NBN could change all that, and this could mean enormous transit cost savings for leaner carriers who don’t own as much transit network infrastructure.
Early last year, the company revealed that it began conducting trials for “Cell Site Access” — giving mobile carriers like Vodafone access to the National Broadband Network to connect towers.
AVC+CVC works well for mobile transit
The two-part access and connectivity charge (AVC+CVC) that nbn currently uses means that the carrier can pay for a relatively low cost for a high bandwidth Access Virtual Circuit (say 100+ Mbps) at the tower but only pay for the bandwidth at a regional level (Connectivity Serving Area, CSA) at the point of interconnect (POI).
This means that no matter how many towers they put up, as long as the overall bandwidth that gets transferred across the mobile network doesn’t change, there will only be a minimal cost difference in terms of transit between towers.
Of course, the equipment costs will still exist — but carriers could increase their cell density in a metropolitan area or regional centres by installing small “towers”, but only have to pay some $40 in monthly cost for connecting the towers to the NBN Point of Interconnect.
Great for dealing with peak demand at venues
The flexibility of the two-tier AVC-CVC model for mobile carriers means that if “mobs” of people aggregate at a particular location say for a sporting event — the carrier could simply increase the low-cost AVC component to cope with the peak demand at that particular location. That, of course, assumes that overall data consumption doesn’t increase which is probably not true from experience. But it means that carriers will not have to pay massive premiums for high-bandwidth transit during the entire year, when it can cater for occasional high demand by paying a little more in the access component over an NBN transit solution.
I think there is massive potential for NBN to shake up the mobile transit market. Once the NBN is built, the infrastructure will be there to support high density microcells in built up areas and also for carriers to expand their coverage in more regional areas at relatively low cost.
I guess the point I’m trying to make is that growth in mobile doesn’t necessarily undermine the NBN. 4G and 5G networks will still need high bandwidth transit to carry all that data from the tower back to the carrier’s data centres… and it seems the NBN is an obvious candidate for some carriers.
I’m really quite excited to see what mobile carriers may do in the future with the NBN, and I’m sure nbn wouldn’t mind having some extra revenue given current circumstances with the MTM cost blowout.
nbn, the company responsible for building the National Broadband Network, confirmed the delay to technology publication Delimiter. The company says they have deliberately chosen a slower activation approach as it “allows us to test our own processes and systems and to identify any issues along the way.”
I suggest you read Renai’s article to get the full spiel from nbn™.
Analysis of nbn’s monthly rollout schedule has revealed that the ambitious Fibre to the Node switch-on has been delayed for hundreds of thousands of premises by up to four months.
According to rollout information produced by the company rolling out the National Broadband Network, the ready for service dates for around 164 thousand premises in the NBN Fibre to the Node trial area have been delayed since the company’s estimates in May.
In May, the company estimated that 37,200 FTTN premises will be declared “Ready for Service” in September 2015 with another 35,200 premises added in October. However, the latest monthly ready for service plan released by the company last week shows a mere 2,100 premises will be declared “Ready for Service” in September. Delays continue into October, with only 9,600 premises expected to be activated in that month.
In total around 164 thousand premises have been pushed back by up to 4 months.
A full list of areas delayed can be found at the bottom of the post.
Graph: NBN’s FTTN Expected Ready For Service dates are slipping. (Blue bars show estimates in May, orange bars show estimates in August.)
The raw data:
Table showing the change in the number of FTTN premises expected to be declared “Ready for Service” by nbn from May to August:
RFS Month
May Rollout Schedule
(‘000)
Aug Rollout Schedule
(‘000)
Net change
(‘000)
Sep 2015
37.2
2.1
-35.1
Oct 2015
35.2
9.6
-25.6
Nov 2015
30
36.1
6.1
Dec 2015
28.5
39.2
10.7
Jan 2016
26
35.8
9.8
Feb 2016
47.2
53.9
6.7
Mar 2016
0.0
48.5
48.5
Table showing the full list of Service Area Modules (SAMs) where nbn has delayed the Ready for Service dates:
Surprise ruling on online copyright infringement case may help Aussie consumers with pricing and availability of content in the long run.
In a surprise ruling of handed down by Justice Perram last week, Dallas Buyers Club LLC was denied access to the details of around 5,000 iiNet customers who are alleged to have pirated the movie using peer-to-peer technology — after the judge deemed that some damages that DBC wanted to claim from alleged infringers were “untenable”.
In summary, the judge determined that Dallas Buyers Club could only reclaim the cost of the film if it had been genuinely downloaded plus a proportion of the legal costs. Perram described other claims sought by DBC as being “untenable”, denying the company from seeking:
A claim for an amount based on each person who had accessed the uploaded film from each downloader’s Torrent source; and
A claim for punitive damages depending on how many copies of other non-DBC copyrighted works had been downloaded by each infringer
Effectively, the ruling sets a precedent against so-called speculative invoicing in Australia where rights holders hold alleged pirates at ransom by demanding large sums (often in the thousands of dollars) or risk facing legal action.
Ruling will prompt rights holders to “do the right thing”
Unlike in other countries where speculative invoicing can be seen as a large source of income for rights holders, Perram’s ruling last week removes much of the financial benefit for rights holders to pursuit alleged pirates. Legal action will only enable rights holders to recover costs of a regular sale of the film to infringers — and no more.
In effect, this would encourage rights holders to boost availability and affordability of its own content in Australia rather than risking the expensive and unpredictable process of legal proceedings to reclaim costs later down the road. (Believe it or not, earning money straight away is probably better than not selling something, then suing something for stealing it, and then not knowing the outcome of those proceedings.)
Ruling “a big win” to Australian consumers in more ways than one
Not only is ransom speculative invoicing effectively “banned” by the ruling, it may in fact reduce piracy in the long run.
Traditionally, the island nation of Australia has always suffered from timely and affordable releases — especially TV shows or movies. But the age of the Internet has changed everything and Australian consumers are able to jump the hurdles to access content intended for overseas or otherwise, pirated.
Australians have long shown that they are willing to pay for content that is easily accessible and are at an affordable price. The rapid uptake of paid, subscription services such as Netflix, Presto and Stan is evidence of this.
If rights holders continue their current trend of holding back digital releases in select countries, they may find themselves at a financially risky position of recouping limited sales costs. They also risk the process backfiring on them, leaving them surplus legal costs and no net revenue gain.
So… perhaps now that legal action is shaping up to be not too attractive, rights holders will finally work together to and resolve complex geography-based licensing restrictions and restrictive DRM models to provide us as consumers “easy ways” to purchase content legitimately and legally. One can dream.
Residents in the settlement of Bogan near Nyngan, NSW will soon benefit from the launch of the nbn’s first long term satellite called “Sky Muster”. This is a big win for the community, whose broadband quality rating was determined to be “E” (the lowest band) by the Department of Communication’s MyBroadband analysis.
The satellite, expected to launch on the first day of October, will bring a massive network capacity boost over the current NBN Interim Satellite Service. The company building the NBN says the satellites are expected to enter into commercial service some time in 2016 and will deliver speeds of up to 25 Mbps download and 5 Mbps upload to rural communities – such as Bogan, NSW.
According to nbn’s rollout map, there are three premises in the Bogan township:
2403 Bogan Road, Bogan
2835 Bogan Road, Bogan
3185 Cathundral Bogan Road, Bogan
However, the accuracy of addressing information especially in rural areas may be patchy due to incomplete or out of date data in the GNAF database (Australia’s authoritative Geocoded National Address File).
opinion/analysis
This really isn’t news. The writer of this piece is aware of how many satire pieces out there poke fun at Bogan, NSW. He simply wanted to add to this – while featuring the National Broadband Network.
nbn staggers FTTN commercial launch date depending on ISP’s state
nbn, the company responsible for building the National Broadband Network, has updated their website stating that the commercial launch date for their Fibre to the Node network depended on the Access Seeker’s “registered office or principle (sic) place of business is located in Queensland”.
For most access seekers, the date for commercial launch is on Friday 18 September 2015. For access seekers located in Queensland, the commercial launch date is on the Monday after – on 21 September 2015 (or as advised by NBN Co).
The company has not indicated on their website why the date was staggered across the weekend for the different states.
