NBN Buzz: Slipping down the broadband ladder

NBN Buzz is a weekly wrap up of everything that's going on with Australia's largest infrastructure project. For previous editions and the latest news visit our NBN Buzz page.

The broadband reality behind the political debate

The NBN ‘Punch and Judy' show in Canberra continues to highlight the priorities of the respective political parties. This week the Coalition persisted in spreading misinformation on the state of the rollout, prompting a full-blooded response from the Gillard government.

However, while the politicians bandy around their words the reality is Australia continues to fall behind its peers in the developed world on broadband.

The latest report card from the Organisation for Economic Cooperation and Development (OECD) has shown a considerable drop in Australia's standing in the fixed broadband space. The fixed broadband penetration level in Australia has slipped below the OECD average of 25.61 per cent for subscriptions, with only 24.6 per cent of Australians connected to fixed broadband as at December 2011.

Australia now ranks 21st out of 34 nations for fixed broadband subscriptions per 100 people and apart from the fact that it's a substantial drop from where we were a couple of years ago, it also highlights the stagnant nature of fixed penetration.

While the Gillard government has unsurprisingly jumped on the figures to reinforce the need for the NBN, it does fail to point out that so far the NBN has not had any tangible impact on the fixed broadband penetration numbers. Why? Because the rollout is behind schedule and while there are some legitimate reasons for this unless NBN Co hits all its targets we are not going to edge up that OECD list anytime soon.

The other omission, according to CommsDay's Grahame Lynch, is that Australia ranks considerably higher for mobile wireless broadband subscriptions, coming in at eighth position, with 74.4 connections per 100 people. Trumpeting the wireless side of the broadband equation isn't exactly the smartest thing for Conroy to do, but Lynch does pose an interesting question.

If Australians are spending more time on their mobile broadband device than the fixed service in their home or office, and place a greater value on mobile broadband than fixed broadband; then is the NBN investment worth it?

It's a valid question but our broadband future shouldn't be a question of picking one over the other. Given the rate of smartphone adoption in Australia it's not surprising to see that we fare better on wireless broadband subscriptions. But to assume that this is the best fit for the country would be a mistake. Wireless networks won't end congestion troubles and for a superior broadband experience consumers will more often than not pick fixed over wireless.

Realistically, we are headed for an environment where fixed and wireless services will work side by side. What customers gravitate to will depend on how efficiently the rollout is carried out. Without that the stated benefits of the NBN just won't be recognised.

Conroy's apology demand

Meanwhile, Conroy did come out all guns blazing against Nationals leader, Warren Truss, and his assertion that Townsville, Rockhampton and Mackay were set to miss out on NBN fibre. Truss told Channel 10's Meet The Press program that the three regions were set to receive the NBN via wireless, despite te government's promise to deliver fibre.

Just how Truss came to that conclusion is a mystery but one would hope it was simply a misreading of the plans released last week by the PM, which stipulated that the outskirts of Townsville, Rockhampton and Mackay will receive the wireless service but the metros will be connected to fibre.

However, a more cynical mind could equally conclude that Truss was out to mislead the pubic deliberately. That's certainly how Conroy sees it as he called for an apology from Truss.

That wasn't the only piece of misinformation from the Coalition with a report in The Australian  that small towns that were hoping to get connected to fibre will receive wireless connections because the Gillard government has shifted the cut-off goalposts.

According to Opposition rural communications spokesman Luke Hartsuyker, towns would miss out as a result of Labor caprice. The original plans under the Rudd government had stated that towns with populations of more than 1000 would receive the fibre network. That's a 1000 people, not premises.

Conroy is obviously not going to get that apology from Truss but at least the government is talking tough. This is important because the Coalition seems to be embarking on a deliberate strategy to sow as much confusion as possible among the population, especially as the federal election edges closer. Opposing Labor's ambitious NBN approach is perfectly valid but the Coalition's tactic of deliberate misinformation does the public a disservice.

Too much information or not enough?

Just what the Coalition has in store for the NBN post election is of course subject to much conjecture, despite the opposition's insistence that it has already provided sufficient information on its policy. In fact Shadow Communications Minister Malcolm Turnbull wrote in to reinforce that fact after reading last week's column, this is what he had to say.

"I am genuinely puzzled how you can keep on writing that the Coalition has not revealed its broadband plans. Not only have I revealed them in considerable detail, but the broking community sufficiently understands what our plans are to be able to calculate their financial implications for Telstra - see as only the latest of many examples the Deutsche Bank research published today. A casual stroll through the speeches on my website will give you all the answers you need."

However, the opposition has so far failed to reveal anything meaningful on the speeds at which the services will be delivered or what it intends to do with regards to the regulatory process that underpinned the structural separation of Telstra, and the one that determined the number of points of interconnect (PoI).

It is not in the best interests of the Coalition to spill all the beans in one go. This would only give the Gillard Government time to launch a counter. It is more than likely that Turnbull does have a comprehensive plan, which will be elaborated in further detail much closer to the election.

So has the opposition provided the public with enough information on their NBN alternative or is further clarification needed? Join the conversation and tell us what you think in our comments section.

New multicasting entry level prices

Finally, NBN Co has cut the entry level pricing for its multicast video streaming service after wholesale customers warned that the original pricing would force them to raise prices for their Internet Protocol Television (IPTV) offerings and hinder uptake.

The pricing regime consists of two components: the price for the Multicast Access Virtual Circuit (MAVC), which is the cost of getting the connection, and the price for the Multicast Domain- the cost of streaming all the content into the home of a customer. Under the terms of the regime, RSPs need to pay $5 a month per user for a 20Mbps allocation on the MAVC, with an additional allocation of $5 per extra 10Mbps up to 60Mbps. Meanwhile, the Multicast Domain is priced at $2.50 per Mbps per month, with RSPs paying $250 per month per 100 megabits per second (Mbps) capacity for 121 point of interconnect (PoI).

NBN Co has now released a new entry level MAVC level of $2 for 5Mpbs per month, which should allow providers to deliver IPTV services without making it too expensive for customers.

The change will be a relief to telcos who were none too impressed by the prices for a service that is still in a nascent state across the country. Paying the sort of prices stipulated in the original regime would have undoubtedly forced the telcos to slug customers, which in turn would have hindered uptake. While all the telcos have played a hand in getting NBN Co to rethink its pricing, a special mention must go out to Internode founder and soon to be iiNet board member Simon Hackett, who was quite prominent in his efforts to make multicasting more feasible for the telcos.