ACCC report and COVID-19 highlight how CVC is an artificial handbrake on the NBN

In usual quarters, the total bandwidth purchased by retailers from NBN increases by a percentage in the low teens, but not this quarter.

But in its latest Wholesale Market Indicators Report, the Australian Competition and Consumer Commission (ACCC) has said total capacity purchased on the network grew 40% to 17.8Tbps, while the average capacity per user grew 31% to 2.5Mbps.

The figures from the ACCC were as of the end of March, while NBN offered its 40% capacity boost in response to the coronavirus pandemic only seven days before the end of the month.

Examining traffic and capacity graphs and history from Aussie Broadband — which is one of the few to publicly disclose capacity and usage at each NBN point of interconnect — the information shows the retailer did not jump all-in as soon as the offer came into force. Instead, it steadily ramped up throughout April, a period the ACCC report does not capture.

All up, it highlights how much the loathed connectivity virtual circuit (CVC) pricing structure — where retailers are charged on a per Mbps basis — has been holding back the network.

A 40% jump in CVC is the sort of growth the network experiences yearly, and it happened in this quarter, and there is more to be measured next time.

Little wonder telcos have hated it since its inception, and it has been seen as an artificial handbrake on the speeds consumers receive.

Elsewhere, the report said 455,000 services were added to the network over the quarter, representing a 7% growth and taking it past the figure of 7 million connected premises. Of the new premises or ones that changed plan, over 310,000 were added to the 50Mbps speed tier, almost 94,500 moved to 25Mbps plans, and over 56,000 connected on 100Mbps plans. This was offset by the total number of 12Mbps premises dropping by 6,500 premises.

In total, 4 million premises are on 50Mbps, followed by 1.16 million on 12Mbps, 1 million on 25Mbps, and 772,00 on 100Mbps.

The ACCC also pointed to what it labelled as “smaller RSPs” picking up market share, with genuine small player Aussie Broadband picking up 3% of the market, while the Australian output of the Vodafone international behemoth sat at 1.9%.

Telstra is still well ahead with 47.6% of all NBN services, followed by Vodafone-marriage-partner TPG with 22%, Optus on 15.3%, and Vocus on 7.1%.

During the quarter, Aussie Broadband took its total number of premises on 1000Mbps connections past 50, and on Tuesday, said it would widely offer a 1000/50Mbps plan to consumers on full fibre and HFC connections from next week.

In February, Telstra said it only offer speeds greater than 100Mbps on full fibre and HFC connections.

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Article source: https://www.zdnet.com/article/accc-report-and-covid-19-highlight-how-cvc-is-an-artificial-handbrake-on-the-nbn/#ftag=RSSbaffb68