[AusNOG] Simon Hackett's presentation from Comms Day yesterday - NBN fibre on copper prices

[Jake Anderson]

On 18/07/13 13:30, Ben wrote:
> On Thu, Jul 18, 2013 at 12:41:03PM +1000, Jake Anderson wrote:
>> I'd really like to see how funding changes if NBNco charge a fixed
>> price per port regardless of speed, and ditched the CVC charge.
>> CVC is going to be the biggest thing killing off value added
>> services for RSP's I think, different flavours of unmetered content
>> and the like.
>>
>> The issue is probably that the "cheapest" plans would get moderately
>> more expensive and everybody would whine.
> If you have a difference in pricing going up for cheapest plans that would
> be because the basic service cost has gone up, and would only happen if
> the more expensive plans are subsidising the cheaper plans.
They do, its part of the plan.
City also subsidises country.


>
> The biggest reason against I imagine is backhaul bandwidth, but that should
> be improving over time, and so a charge for backhaul bandwidth that resembles
> local bandwidth congestion makes a lot of sense.
>
> That said, charging $20/megabit for bandwidth is ludicrious.  And generally
> speaking the more bandwidth use there is the cheaper it gets.  And so in some
> ways even something like charging for bandwidth utilisation in an area makes
> sense, as well as for any backhaul to connected PoP.
>
> So then you may have situations like CBD sites paying $0.10/megabit, urban
> $0.20/megabit and rural $0.30/megabit.  Then $0.50/megabit for the interconnection
> point which may include an element of all 3.
Lets see about some numbers
page 62 of the latest plan has the revenue from AVC and CVC charges.
If we look at around 2020 it looks to my eye about 60/40 AVC/CVC.
Note CVC keeps going up as a % forever by the look of things.

in 2013 they are banking on an AVC usage percentage of about, with 
(present day) prices of
50% 12/1,     $24
28% 25/5,     $27
1% 25/10,     $30
4% 50/20,   $34
17% 100/40, $38

A weighted average gives us $27.68 for the average AVC price, so plans 
higher than that are paying for plans lower than that.
So if you want to ditch the CVC price and have NBNco get the same 
revenue you wind up with a per "port" price of $38.8 amo.

Note my maths is probably full of errors and I'm taking these numbers by 
eye from graphs

Skymesh are offering 12/1 plans for $29 with 5Gb of transfer.

You can see how googles offering of gigabit for $70amo or 5/1 for "free" 
works.
Nobody could get $70 internet through the public arena here though, not 
with $29amo ADSL plans around (the average punter probably not 
understanding line rental going away)

>
> Then rural users can be limited to slower plans, and business users are likely to
> use more traffic during the daytime, and urban at night, but will both go to the
> same interconnection point.
>
> Then when an upgrade is needed for an urban location because they're congesting their
> local segment, then the cost per megabit should come down as the point is upgraded as
> obviously they enjoy their bandwidth, and as the investment already needs to be made
> in upgrading bandwidth, then there will be lots of slack bandwidth.  Ditto applies to
> rural areas, as their usage goes up, and points are upgraded, (it takes a while for
> the majority of users to make use of newer more bandwidth heavy applications that
> weren't usable prior) the price per megabit drops.
>
> Ben.