Opinion: NBN Co 1Gbps promise a win for the Coalition

The reintroduction of the "peak speed" into the market is likely to cause headaches for customers and the ACCC alike

Based on political prowess, common sense and pure technical know-how, it can be said that the Coalition didn’t win many battles this week in the war for broadband. The combined failures of Tony Abbott, Tony Smith and Andrew Robb as well as the complete absence of the one person who has some experience in the area - Bradfield Liberal MP and former Optus man, Paul Fletcher - didn’t bode well for a party who seemed so keen to tear down the Labor party’s white elephant.

But the Coalition did win one battle this week: terminology.

While confusion continues to rein over whether the Liberal party intends to deliver at least, equal to, or a maximum speed of 12 megabits per second (Mbps) to 97 per cent of Australia, it’s simple use of the term “peak speed” has cemented the market mentality that has existed in Australian telecommunications since the introduction of the Internet.

No one ever expected to receive the speeds promised to them by their respective carriers, no matter where it was 100Mbps over cable, 24Mbps over ADSL2+ or 56Kbps over dial-up; physics didn’t allow it, and service providers could easily use that as an excuse for under-delivering on service commitments. So, when communications minister, Senator Stephen Conroy, made the commitment to deliver 100Mbps to 90 (now 93) per cent of Australians through the proposed National Broadband Network (NBN), it was a breakthrough.

As the chief executive of NBN Co, Mike Quigley, used to say over and over again, committed speeds are different from peak speeds. By delivering 100Mbps committed speeds to consumers, there was no question of whether the speeds would fall below that: For all fibre-connected Australians on the network, 100Mbps is 100Mbps.

With NBN Co’s latest promise of 1 gigabit per second (Gbps(), however, all that goes out the window.

The mass media were quick to jump on the figure as “ten times” the amount initially promised 16 months ago. Of course, what those media outlets failed to realise - or at least clarify - was that NBN Co had suddenly switched from using the “committed” speed to a peak speed.

Customers are unlikely to receive 1Gbps consistent speeds as soon as the NBN is connected to their door. Sure, they might someday - or perhaps if they are the only adopter in their neighbourhood - but otherwise, that speed will likely only be attainable in the dead of the night. To take Kerry O’Brien’s apt definition:

“Peak speed is the best speed at which you can download material, usually when people are least likely to be using the Internet, like at midnight. At other times, when there is congestion on the net, the speed will be much lower than that.”

Under the NBN currently being rolled out around Australia, the limitations of physics have once again come into play.

That’s because the network is predicated on Alcatel-Lucent’s gigabit passive optical network (GPON) technology, which splits a single optical fibre for use at up to 32 premises using the magic of light waves. That means that a single GPON splitter box can serve 32 premises.

The problem, however, is that each GPON box is currently limited to a maximum bandwidth of 2.5Gbps downstream and 1.25Gbps upstream. Not only is it asymmetrical - a problem for another discussion - but it means that, if 32 premises connected to that splitter adopt the NBN, the maximum bandwidth they will receive is 78Mbps.

NBN Co readily acknowledges this and, instead of installing multiple boxes or limiting each splitter to 16 premises, appears to be relying on the idea that the NBN won’t see 100 per cent take-up in a given area. In the first instance, that assumption is likely to prove correct across Australia, but the wholesaler simply can’t guarantee that for every single neighbourhood. Those technically-inclined communities may just consume NBN like it’s dinner fit for a king.

Until the wholesaler upgrades to 10G GPON - which is a few years down the track - the promise of 1Gbps peak speeds is technically unfeasible.

Using the “peak speed” terminology, while a quick win against the Liberal party’s backwater broadband plan, simply concedes defeat to the Coalition’s war on words. The Labor party can no longer provide a promise it can stick to. Instead, it has raised the bar to a new high, one which will ultimately see it garner bad press when it doesn’t deliver.

The problem goes beyond that, too. In the only live NBN trial site of Tasmania, where 4000 premises are currently connected, three service providers are currently offering a range of access speeds from 25 to 100Mbps. Those speeds - unlike the ones you normally see advertised under ADSL2+ - are minimum commitments. If you need a faster speed, you can be guaranteed it.

NBN Co’s new promise, however, has opened the floodgates for service providers to once again promise speeds and subsequently under-deliver. Basic market dynamics dictate that the providers will offer the highest possible speed - now 1Gbps - at a premium, to which it ultimately can’t deliver.

So, while we wait for the first complaints to flood into the ACCC claiming false advertisement, all I can say is poor game.

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Tags broadbandnbn coFederal Election 2010National Broadband Network (NBN)Mike QuigleyNational Broadband Commission (NBC)

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