NBN drops CVC charge

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NBN drops CVC charge

Postby HBS Guy » 05 Apr 2016, 07:10

Following widespread dissatisfaction with FTTN (of course) NBN Co is discounting the CVC charge to RSPs.

http://www.itwire.com/it-industry-news/ ... 80%99.html


NBN will overhaul its broadband pricing structure and offer tiered discounts to its service provider partners that will scale as their purchased bandwidth increases.

The network builder first floated the idea last November, as a response to the long-criticised connectivity virtual circuit (CVC) charge retail service providers are levied to buy bandwidth on the NBN.

The expensive fee sees RSPs charged from a starting point of $17.50 per Mbps per month, which grows as traffic over the NBN increases.

But RSPs argue the usage profile on the network has changed as a result of the huge popularity of streaming video-on-demand services like Netflix and Stan, making the CVC charge exorbitant.

Of course, all of this just destroys the so–called CBA us taxpayers paid a mozza for, to Turnbcoat’s cronies, of course.
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Re: NBN drops CVC charge

Postby HBS Guy » 06 Apr 2016, 10:46

Telcos are very critical of the whole CVC pricing concept, the cuts announced recently do not impress them:

"As it stands, the CVC charging regime may be one of the biggest obstacles to the NBN delivering on what it was intended to deliver ... this is because of the Netflix effect, crudely," Epstein said at Tuesday's CommsDay Summit in Sydney.

"What is unfolding is an intersection of a change in customer behaviours and the product economics of the NBN."

This so-called "Netflix effect" -- to which Optus itself will add once its EPL broadcast streams begin in August -- has resulted in more data consumption than the networks were designed for. While some have suggested that telcos simply purchase more capacity on the NBN to allow for this, Epstein pointed out that this has its limits.

"How much capacity can you buy, and deliver services across it, that customers can afford to use, or want to pay for?" he asked.

Epstein added that levying an industry-wide charge will also stymie innovation and competition among providers.

"The problem with industry averaging is that it's a potentially incrementalist approach that rewards the lowest common denominator. It does not reward RSPs who want to exercise initiative or want to innovate by creating new, better-provisioned service offers that compete on quality of experience," he said.

"Under an averaging model, an RSP offering better tiers of NBN services than its competitors at common price points face real risks of paying a larger penalty in a market that can be quite competitive. So where's the incentive in that?"


Probably CVC pricing will have to be done away with, to a very large extent anyway. Then how will the collection of incompatible and obsolete technologies make any money?

Come on Malcolm, come on Fifield, come on Morrow, end this shit and run out FTTH at a rate of knots, ramp up to 50,000 premises passed a week! Skinny fibre and FTTDp, allowing small businesses to offer running fibre from the distribution point to the house or other building so creating a FTTH connection. This would be paid for by the householder.

The MTM is dead, it just remains for the shambles to realise it and redirect the rollout.
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Re: NBN drops CVC charge

Postby HBS Guy » 06 Apr 2016, 17:36

Seems CVC charges will continue to fall over time.

Some of these figures are actually a slight increase over the trial's RSP-by-RSP DBD pricing, but will be evolved and lowered continually over time, NBN said.

They also provide for a higher top speed than the trial's figures, which were AU$17 for 0Kbps to 400Kbps; AU$16.50 for 401Kbps to 500Kbps; AU$16.25 for 501Kbps to 600Kbps; AU$15.75 for those with 601Kbps to 800Kbps; AU$15.25 for 801Kbps to 1,000Kbps speeds; AU$14 for 1,001Kbps to 1,150Kbps; AU$12.75 for 1,151Kbps to 1350Kbps; AU$12 for 1,351Kbps to 1,500Kbps; and AU$11.50 for those using speeds above 1,500Kbps.

NBN first committed to dropping its CVC charge for RSPs from AU$20 per 1Mbps to AU$17.50 per 1Mbps in November 2014, bowing to industry pressure.

RSPs had argued that the CVC charge would make it difficult to offer competitive market prices, with iiNet claiming in August 2013 that it could not provide unlimited broadband plans through subsidiary Jiva with a CVC charge of AU$20 per 1Mbps, while Internode founder and present-NBN non-executive director Simon Hackett fought with the company over its CVC pricing since 2011.

Hackett previously stated that the charge, combined with the competition regulator's decision to expand the NBN to 121 POIs, would result in many smaller carriers being priced out of the market.

NBN is now reducing its CVC pricing in response to such feedback from RSPs, Palmer said.

"It's a reaction to working with our customers since we started the NBN. So in 2010, we announced the pricing structure, and that we had this capacity, or CVC, charge. We said we were going to reduce it over time, because we knew the input costs of ISPs would increase as usage on the network increases," Palmer said.

"We've seen the usage on the network ... and this is a discount to basically adjust to that."

http://www.zdnet.com/article/nbn-solidi ... t-pricing/

I guess Netflix really has destroyed the MTM, especially FTTN.

Fifield is claiming Labor running out FTTDp after winning the election later this year, a weird claim since definite policy has not yet been announced and Labor needs to spend time examining the wreckage of the NBN and what is possible and what not. Libs have wrecked continuously and effectively all during their time in office.
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Re: NBN drops CVC charge

Postby HBS Guy » 14 Apr 2016, 06:48

Changes to CVC pricing hardly even a bandaid:

Epstein today said despite the changes, CVC charges remained the biggest obstacle to the NBN delivering on its promise.

"This is because of the Netflix effect," Epstein said.

"What is unfolding is an intersection of a change in customer behaviour and the product economics of the NBN."

Epstein said according to statistics from IP TV provider Fetch, almost 2 million households subscribed to streaming services as of last December, which had had a "significant impact" on household broadband usage.

"Those 2 million households are consuming 20-30 hours of streaming a content a month... and it's rising," he said.

Dramatic changes to the demands on network capacity resulting from this increase in streaming popularity mean telcos now have to be able to cope with much higher concurrent usage, Epstein said.

Over the last 18 months, he said, Australian telcos had seen a threefold increase in concurrent demand on networks during the evening peak.

"What we're now facing is the challenge of moving from the old internet model," Epstein said.

"And the old NBN business model is very much based on the old internet models of browsing patterns. It was not designed for streaming patterns and the sorts of consumption cycles we are seeing today.

"To keep up with demand load on networks, RSPs clearly need to buy more CVC capacity. But this is where we hit the roadblock in the form of the NBN's CVC pricing regime."

Neither the old model nor the proposed changes have kept up with changing customer behaviour, Epstein said, arguing that even with the planned modifications, CVC pricing encouraged "mediocrity".

"The CVC pricing construct effectively drives RSPs to reduce end user costs by provisioning their networks to achieve a minimum level of acceptable speed through the peak period, rather than to maximise peak throughput," he said.


Since FTTN is set up to be mediocre, one 1Gbps fibre going into a DSLAM serving 192 copper lines peak speed is going to be pretty crap why the hell would an ISP spend too much on CVC, on backhaul? Netflix, Presto, Stan etc have destroyed the MTM, it is just a matter of time until that is recognised. As more and more in an area served by one stupid node cabinet increases the speeds at peak hours will drop and drop. Then the Telstra copper will impose speed limits: dry joints, corrosion and crosstalk in a bundle of Telstra wires etc.
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