ACCC will soon tell you your true NBN speeds

07 April 2017

Cables and ports

The Australian Competition and Consumer Commission (ACCC) today announced that it has received Federal Government funding for a new monitoring program to gather independent information about Australian broadband speeds.

The program is ostensibly designed to monitor the performance of the National Broadband Network, and will allow the ACCC to find out if speed issues are being cause by the network, or a provider not buying sufficient capacity. The ACCC will begin publishing this data later this year.

"As consumers drive the demand for high-data speeds and data-intensive services, they need access to accurate information to assist them in choosing plans," said ACCC Chairman Rod Sims. "This improved transparency will help these consumers exercise choice as next generation services are rolled out, including on the NBN."

This kind of monitoring is seen as a necessity due to how providers buy access to the National Broadband Network. While they are all technically reselling access to the same network, they also have to buy capacity on the network (also known as CVC, or Connectivity Virtual Circuit). At present, telcos pay around $15.75 per month per Mbps of capacity. From the first of June, NBN is launching a new pricing scheme that could see some providers pay as little as $8 per Mbps.

The issue with this is that even if you look at Telstra, which will often charge you over $100 for a 100Mbps NBN plan, it would need to speed $800 per month to be able to facilitate your service, not counting other costs associated with providing access to the National Broadband Network.

Obviously, Telstra isn't spending $800 per customer, and as such, if too many Telstra subscribers are online simultaneously, none of them get the speeds they are paying for.

To make a service affordable, telcos have to find the right balance between how much they charge and the amount of CVC they buy. Purchase too little, and your customers will have a terrible experience during peak times. Purchase too much, and you won't make money selling your plan or keep it priced competitively.

Given the vast number of providers now reselling access to the National Broadband Network, especially at quite low price-points, we think the ACCC's performance data should be invaluable. There's nothing worse than being locked into a 24-month contract for a service that doesn't perform.

The ACCC plans to commence testing in May 2017. The program will involve installing testing hardware in over 4,000 to determine the typical speeds of fixed-line National Broadband Network services at various times throughout the day.

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