wifi

Could TPG end up partially subsidising NBN for Qantas Wi-Fi?

Kenneth Tsang Leave a comment

NBN Co placed in a potential conflict of interest under new regional broadband tax

Earlier this year, I made a submission to the Government’s consultation on the Telecommunications Reform Package.

I’ve been meaning to write a summary for some time.  I thought I’d whip one up together after it was announced that the Government planned to introduce the legislation next month despite not responding to the submissions.

As part of the reform package, the government planned to introduce a $7.09 charge per line to most fixed line “superfast” broadband services (defined as 25 Mbps download speeds or greater).

This is to help subsidise the cost of nbn’s fixed wireless and satellite networks — primarily servicing regional and remote communities around Australia.

The NBN fixed line footprint is expected to be the primary contributor of the tax.  However, other operators such as TPG with its fibre to the building network will also be hit.

NBN Co’s commercial interest

The problem is that the NBN satellite network is no longer solely about the delivery of broadband services to regional areas.

It now has other commercial interests — including the Satellite Mobility product which allows commercial entities like Qantas to tap into the satellite network for the delivery of in-flight Wi-Fi.

This could mean that a provider like TPG could be paying taxes which help subsidise the provisioning of Wi-Fi services on a Qantas aircraft.

No restrictions on subsidy for regional broadband only

The proposed bill had no restrictions that the funding must only be used to provision broadband services to regional areas — as I explained in 2.1.5 and 2.1.6 of my submission.

So, NBN Co is placed in a conflicting conundrum.  It can spend its subsidy funds on improving the quality of satellite services to regional communities like relaxing the Fair Use Policy with no additional revenue.

Alternatively, it could spend it on developing new revenue streams through commercial products like the Satellite Mobility product — competing with the likes of Optus who also have satellites in the sky.

My suggestions?

In my submission, I suggested:

  1. The Bill should make clear that the funding made available through the Regional Broadband Scheme is not available for services where the primary purpose is not to deliver broadband to regional communities.
  2. The strict Fair Use Policy (FUP) imposed by NBN Co on its Satellite network means the quality is still not directly comparable to fixed-line super-fast broadband services.As a condition of the Regional Broadband Scheme funding, the funding recipient should prioritise upgrades to the capacity and service reliability of rural and regional customers over the development of supplementary products like the Satellite Mobility product.
  3. Ensure similar protection is afforded to services delivered by means of the NBN Fixed Wireless network.

Full submission

Telstra ends free Wi-Fi trial, launching Telstra Air

Kenneth Tsang 1 Comment

This coming Tuesday, Telstra will end its free nationwide Wi-Fi trial and launch of their new nationwide Wi-Fi offering “Telstra Air”.  The network, which claims to be “Australia’s largest Wi-Fi network”, will allow Telstra broadband customers to use their broadband allowance where there is a Telstra Air hotspot available.

The company has also signed a deal with international Wi-Fi provider Fon to allow Telstra customers to continue using their fixed-line data allowance in overseas destinations including UK, Spain, Brazil, Japan, France and Germany.

Telstra Air will be delivered over three hotspot types:

  • More than 4,000 hotspots located at Telstra payphone sites
  • Over 15 million hotspots overseas, via Fon’s network
  • Secured hotspot over other Telstra Air customers’ home broadband gateway

In order to join Telstra Air, Telstra home broadband customers must be willing to share part of their broadband connection as a Telstra Air hotspot too using a compatible Telstra gateway.  Telstra claims that over “a million home broadband customers already have a Telstra Air-ready gateway”.  These gateways include the Telstra Gateway Max™, T-Gateway®, and the ADSL Premium Gateway.  Once enabled online, activated gateways will also transmit the Telstra Air hotspot signal for use by other Telstra customers.

Telstra has also confirmed that customers who have a slower broadband connection will find that their network performance will be protected: “We know that Wi-Fi speeds are important to our customers so [network settings] are in place to ensure their home network performance is protected. This includes limiting the number of guests per hotspot and switching off hotspot sharing when the line speed into a home drops below a certain level.”

Opinion

This seems pretty cool.  At a local level, imagine rocking up to your friend’s place, and you’re both Telstra broadband customers.  Firstly – you won’t need to ask for the Wi-Fi password.  Secondly, you won’t have to worry about your friend using up all your data allowance, or them hacking into your network.

Also quite awesome is that by enabling Telstra Air, it unlocks the millions of Fon hotspots around the world.  Essentially, Fon’s network works exactly the same as Telstra Air – on a Worldwide scale.  Customers purchase Fon-compatible routers from Fon or a partner carrier, and once connected, can have access to other Fon hotspots worldwide.  That said, the bad news is that the Fon network is now locked out for all non-Telstra broadband customers in Australia.

To be honest though, I’d be really interested to see how the technology (at the gateway level) works behind the scenes.

The whole TUSMA and payphone situation

One final piece of food for thought – Telstra’s payphones are partially funded by a levy paid for by the Telecommunications Industry as part of a contract deal between TUSMA (now part of the Department of Communications) and Telstra.  $44.0 million was paid to Telstra during the 2012-13 financial year for these services.

We know that similar rollouts have been seen worldwide, where telcos take advantage of their existing payphone infrastructure to deliver hotspots.  I know that the TUSMA contract does not directly subsidise the rollout of the hotspots for the payphones – but on the surface, there does look like there may be conflict.  Is it fair on the wider industry who pays the levy, given that Telstra now gains a competitive advantage on them by rolling out Wi-Fi hotspots on infrastructure they partially funded?