[AusNOG] NBN and CVC

[Mark Delany]

> Is buying the CVC in fixed amounts the right model?

I've always wonder why it's been a speed-based system. It strikes me
that speed has always been a poor proxy for resources consumed and now
that model is just getting in the way.

Would it be better and simpler to set the local-loop (LL) line speed
to the maximum the tech allows and charge on bits delivered to/from
POI to LL along with a flat rate for LL upkeep?

Just like other utilities such as electricity and water.

It's been shown that most people don't generally consume unlimited
amounts of data - they consume what they need. And, now that people
are well and truly comfortable with quotas on their service, moving to
a true resources-based system is hardly much of a mindset change like
it once might have been.


The advantages of this approach are:

a) RSP scaling costs match revenue much better than a menagerie of speed
   proxies

b) Consumers aren't penalized with slow speeds just because they are
   light users

c) All consumers get the best speed experience possible and are thus
   likely to grow their usage which means quicker revenue growth

d) No "chilling effect" on the development of high speed applications

e) RSPs have no incentive to throttle consumers

f) It makes pricing transparent to the consumer

g) It takes NBNCo out of the performance discussion

h) It lets NBNCo focus on continuously improving the LL


All that needs to be done is:

a) Replace CVC with a quota/resource system to maintain an appropriate
   ROI on POIs. Basically $X per MB delivered.

b) Replace AVC with a fixed LL upkeep/ROI fee


The main down-side is that given the MTM - it will expose the lower
speed services for what they are: vastly inferior to the higher speed
services. That might not be politically palatable under the current
regime.

It will also more directly expose RSPs who under-provision rather than
what we have today which is to smear the blame between NBNCo and
RSPs. But that's a good thing, right?

Of course the resources-consumed pricing could still be set absurdly
high to suit the politics of making the NBN "profitable" for a future
sale but that is obscured now with the complex pricing. It will be
much more transparent with a simpler resources system. Also a good
thing.


Mark.