The claim, made in The Australian, quoted Launtel chief executive Damien Ivereigh as saying that NBN connections were slow — in many cases slower than ADSL and cable — because telcos were fighting a price war and refusing to buy adequate bandwidth.
But this argument was shot down by Robin Eckermann, an adjunct professor at Canberra University and one of the people behind the TransACT network.
Prof Eckermann told iTWire that based on CVC pricing at $15.25 per month, an additional $6.25 per customer would mean about 400kbps additional CVC capacity per user while $9.75 translated to about 640kbps additional capacity.
NBN Co technicians installing an FttN cabinet at Cooks Hill in Newcastle. Photo: courtesy NBN Co
RMIT network engineering assistant professor Mark Gregory said the purpose of the NBN was to promote open and fair competition among retail service providers.
"Increased price competition is an indicator that the rationale behind the NBN was sound. However, in an effort to compete, retail service providers are being forced to trade off how much capacity is purchased per customer," he told iTWire in response to a query.
"A fair approach would be to have a single access fee and no capacity charge similar to what is available in New Zealand. The Turnbull Government has made this situation worse by forcing NBN Co to use the obsolete and slow FttN and a broken business model.
"The outcome has been a two-speed NBN. Retail service providers are struggling to offer uniform national pricing at a price that includes sufficient capacity. The cost of broadband in Australia is much higher than in comparative nations and the fault lies with the Turnbull Government."
Rod Tucker, Laureate Emeritus Professor at the University of Melbourne and a member of Labor's Expert Panel that advised on the NBN, said that the solution to the problems faced by NBN Co was not as simple as just having all RSPs pay more, as suggested in The Australian article.
"It is a multi-dimensional problem that needs a multi-dimensional solution. The CVC charge enables each RSP to make a choice as to how to trade off cost versus quality of service. Users could then make a choice if they had enough information to compare RSPs," he told iTWire. "Simply requiring all RSPs to pay more is a sledge hammer approach.
"Having all RSPs pay more would not resolve the uncertainties about the quality of the FttN network."
Prof Tucker said the problem facing NBN Co was that the retail market for NBN services was not working as it should. "If NBN users had more information about the quality of service offered by competing RSPs, they would be in a much better position to pick and choose an RSP that provides the kind of service they want," he added.
While the NBN Co was correct in pointing out that customers needed to be better educated about the meaning of different speed tiers, that did not suffice. "What is needed is publicly available data that compares the speeds that can be obtained through different RSPs, so that users can make informed decisions about their choice of provider," Prof Tucker said.
Prof Eckermann said there were other aspects to the problem.
"First and foremost is affordability. Broadband is becoming very expensive in Australia, and you cannot just keep adding straws to the camel's back without eventually crippling some of the camels. Australians are in love with mobile technology, reflected in one of the highest adoption rates in the world," he said.
"Further, mobile connectivity carries the advantage of any-time, any-where access (unless of course you're in large swathes of regional Australia, but that's another story). My expectation is that if fixed broadband prices continue to rise, a growing proportion of Australians will decide they cannot afford both fixed and mobile access, and decide to forego the fixed broadband. That may mean they have to give up watching streaming video and playing games, but putting food on the table is ultimately more important!"
He said a second aspect was the fact that largely artificially-contrived constraints on CVC capacity were not the only bottleneck in end-to-end connectivity.
"Often there are other capacity limitations, many of them driven by the cost of bandwidth. A perfect example is the connectivity between the mainland and Tasmania, where low competition translates into high pricing - and there are undoubtedly other backhaul routes between RSP nerve centres and NBN POIs where similar premiums apply.
"Finally, for a small number of Australians, the 'last mile' connection itself may currently be a limiting factor - typically only those a long distance from the node in FttN areas. As a side note, I have watched with interest the recent installation of an NBN FttN cabinet in my area of Canberra, and by my estimation (admittedly not knowing the precise routing of Telstra copper), I will end up being well over a kilometre from the cabinet.
"As a result, I have a reasonably bleak expectation regarding the speed potential of that circuit. Fortunately I will probably never need to find out, because I am closer to a TransACT VDSL2 node where the copper is newer and the last 300 metres is data-grade cabling. Best of all, should TPG ever decide to reinstate the original TransACT FttK (aka FttDP) configuration, I will have the potential to achieve a last mile speeds into the hundreds of Mbps."
Prof Tucker pointed out that there was a further complication to the issue – the fact that the speed of a service to a customer could be affected by the particular NBN technology connecting the premises.
"If it is FttN, then the speed of the service will depend on a number of factors associated with the copper,including the distance from the node to the customer. NBN Co works out a theoretically achievable speed for each customer, but this information is not publicly available," he said.
"The ACCC is planning to measure NBN speeds into about 2000 homes, but this programme has not yet begun, and it is not clear if the ACCC's data will be able to resolve questions about where speed bottlenecks are occurring. It is also not clear how much information the ACCC will release. It is not their role to provide customers a comparative analysis of competing RSPs. Either way, the ACCC's analysis might be too little, too late."
Prof Tucker said ACMA had been asked by the federal government to look into NBN customer complaints, but without access to the kind of data that the ACCC was planning to gather, it might be difficult for ACMA to find out the root cause of the problems.