NBN Co outlines cheaper gigabit offering, action on protocol overhead

RSPs will be able to pool user capacity under new wholesale pricing changes detailed by NBN Co

Network Networking Ethernet
Martyn Williams/IDGNS

NBN Co has released a close-out paper from its pricing consultation process, pledging a scheme to help tackle the impact of network protocol overhead on end-user speeds as well as a new measure allowing a retail service provider (RSP) to effectively pool the capacity it purchases.

The government-owned network operator has previously detailed some of the outcomes of its wholesale pricing consultation, including slashing its service transfer fee and making it more appealing to offer entry-level 12/1Mbps services (one of the other ideas put forward by NBN Co – differential pricing for video streaming – was unceremoniously dumped in September).

One major outcome of the process revealed today by NBN Co will be allowing RSPs to share unused data capacity (CVC) across all geographic areas associated with the company’s 121 Points of Interconnect (POIs). Previously, RSPs could only pool capacity within a single Connectivity Service Area (CSA).

“Based on feedback from RSPs, nbn will extend this pooling mechanism to the national level from May 2020,” the paper published by NBN Co said. “This means that RSPs will be able to use the CVC capacity included as part of fixed-line or wireless discount bundles across all fixed-line and wireless CSAs.

“This change will enable RSPs to make more efficient use of the CVC capacity included in bundle discounts and help to decrease RSP costs and improve busy-hour customer experience.”

NBN Co said that it will detail how the pooling calculations will work for bundled CVC in a future update to its discounts, credits and rebates list.

NBN Co also said that “subject to internal operational requirements” it planned to introduce and “overhead allowance” for download speeds on most fixed-line speed tiers. The aim is to provision extra bandwidth to take account of the overhead imposed by network protocols, allowing end users to potentially achieve much closer download speeds to the theoretical maximum offered by a wholesale speed tier.

The idea was recently raised by the Australian Competition and Consumer Commission (ACCC) and endorsed by Vodafone.

“To address growing data consumption, we’ve substantially increased CVC capacity inclusions across most of our discount bundles,” NBN Co’s chief customer officer residential, Brad Whitcomb, said in a statement issued by the company.

“These changes represent another significant step forward for the industry and demonstrate our commitment to address factors such as wholesale price certainty and growing data consumption, and we’re also supporting a sustainable industry while maintaining and improving the network in the future.”

“The key point is that NBN Co continues to create greater value, which is making broadband even more affordable despite consistent increases in data demand,” the NBN Co executive said. “Since 2016, we have more than halved the effective wholesale price of CVC, which applies to purchased capacity.”

The company has issued a two-year roadmap of discount bundles, which include annual increases in the CVC included on most bundled services. Pricing uncertainty for RSPs has been a bugbear of the ACCC.

“We strongly believe this rolling two-year roadmap, which will be updated annually as part of our yearly review of our discount bundles, will go a long way to improving transparency and certainty for RSPs,” Whitcomb said.

“The increased value and data capacity inclusions are a minimum guaranteed baseline and we will be flexible on any unexpected shifts in the market to support the industry and customers.”

The company said it also planned new wholesale speed tiers and associated bundles, including 100/20Mbps, 250/25Mbps and an “up to” 1000/50 bundle.

The gigabit-capable speed tier includes 5.75Mbps of CVC and has an effective monthly charge of $80 a month, compared to $180 for the older 1000/400Mbps bundled service.

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