[AusNOG] Death of the Unlimited Plan? [was] "Sewer broadband provider dumped" - Brisbane fibre plan scrapped

[Mark Smith]

On Wed, 23 Mar 2011 20:14:24 +0000
Bevan Slattery <Bevan.Slattery at nextdc.com> wrote:

> Seems like a few teclo's may have found my calculator...
> 
> http://www.smartcompany.com.au/internet/20110323-nbn-wholesale-pricing-model-threatens-unlimited-plans-telcos-warn.html
> http://www.businessspectator.com.au/bs.nsf/Article/Telcos-warn-of-high-NBN-costs-report-pd20110322-F7QS2?OpenDocument&src=hp6
> 
> "This morning telcos Optus and Internode complained the wholesale pricing model proposed by the NBN is too costly and that it will see unlimited download packages become obsolete."
> 

Is NBNco going to be charging both on bytes transferred and on the size
of the pipes in Mbps? My understanding has been that, similar to
most wholesale telecommunications billing, the billing model would be
based on the size of the pipes.

Usually when I see size of pipe and bytes transferred billing models
conflated together and then used to justify a position, I
assume the person doesn't actually have an "industry" inside knowledge
of how wholesale telco billing commonly occurs. That may be likely in
this case as the "bytes transferred" quote is from "Ovum research
director David Kennedy".

Hopefully NBNco aren't going down this byte and pipe size charging
path. Byte charging at the NBN layer will discourage usage, in
particular of the high bandwidth (and therefore high byte count) NBN
applications that are used to justify why anything but fibre is
unacceptable. When it comes to high volume and low value units of
consumption, people prefer the simplicity of predictable and fixed
per-period pricing as insurance against bill shock at the end of the
month*. This is why the fixed price per month, quota+shaping model has
evolved from the original pure cents/MB, or quota + cents/MB models
we've had in the past. I think it also explains why SMS is popular
compared to short phone calls - the price of the SMS transaction is
predictable and limited before it takes place.

* "Internet pricing in light of the history of communication"
http://www.dtc.umn.edu/~odlyzko/doc/history.communications1.pdf

(I only got to page 11 IIRC, however there is a 160(!) page version here
- 
"The history of communications and its implications for the Internet"
http://www.dtc.umn.edu/~odlyzko/doc/history.communications0.pdf

An interesting historical note was the the post (i.e. letters) were
originally receiver pays, and the receiver could reject a letter if
they didn't recognise the sender. Of course, people side channel
attacked that by encoding short messages in the sender information.)


> Hmmm...   What was it again?  Something about those "with eyeball customers"...?  Straw Man...?
> 
> [b]
> 
> 
> From: Matthew Moyle-Croft [mailto:mmc at internode.com.au]
> Sent: Wednesday, 23 February 2011 2:13 PM
> To: Bevan Slattery
> Cc: Damien Morris; ausnog at ausnog.net
> Subject: Re: [AusNOG] "Sewer broadband provider dumped" - Brisbane fibre plan scrapped
> 
> > You've picked some numbers to make the difference so high.  The actual cost based on project customer behaviour does not produce such a cost difference on average across all customers (national averaged pricing and all that).
> 
> > So, it's easy to create a bit of strawman about what the best-case is for this, but this doesn't represent the average cost.
> 
> >> No strawman, just stating economic fact.  Pushing out a NBN press release with a view to keeping the "headline" wholesale price down to $25/user based upon a user contention ratio of 1:250 on a 12Mb/s (average 48Kbps
> >> over a month) service is just amazing.  That's the same bandwidth as getting unlimited dial-up.  Why didn't they have a table showing costs under a variety of plans?
> 
> >> They actually have a calculator to figure it out.   Again, they presented it at the roadshow recently.   Some of us who have eyeball customers have a fair idea of what this'll cost for different classes of customers now and in the future due to forecast drops in port and cvc pricing compared to existing costs both on our own ports and via wholesale ports.
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