[AusNOG] NBN and CVC

[Matthew Moyle-Croft]

Hi,
I’m going to side step that entirely - I think it’s always interesting to look at other models, but at the moment we’ve got what we’ve got.

I did have some interesting responses - I think it’s pretty clear though that a p95 product for CVC would be popular and unlock a lot of options for ISPs.  It may mean a bit of a drop of revenue for NBN but not too much, but it’d definitely overcome a lot of the issues with congestion where ISPs can’t always keep up and/or predict some spikes.

MMC

> On 29 Jul 2017, at 4:19 pm, Mark Delany <g2x at juliet.emu.st> wrote:
> 
>> 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.
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