NBN Co says up to 75 percent of FTTN users that pay for 50Mbps or 100Mbps retail services will never see that “absolute” topline speed – but they may not be far enough off it to care.
The network builder has spent most of November trying to distance itself from a scandal where some of its retail service providers (RSPs) likely “overcharged” customers for internet services.
The overcharging allegedly occurred when fibre-to-the-node (FTTN) and fibre-to-the-basement (FTTB) customers were sold retail plans that their copper lines were physically incapable of supporting.
The severity of the gap between the retail promise and reality is something that NBN Co has done its best to avoid disclosing.
However, CEO Bill Morrow last night said NBN Co had uncovered “considerable variation” between theoretical and actual line speed measurements on the FTTN network.
He said the company had done some “correlation analysis” to try to determine the extent of the gap between what RSPs were told the line was capable of supporting, and what it could actually support.
He revealed for the first time just how broad the theoretical speeds given to RSPs in the sale process could be: RSPs may sell a service knowing the line can support a speed somewhere between 25Mbps and 60Mbps, providing a large margin for error.
But he maintained that NBN Co “caveat[s] that carefully”, and insisted NBN Co was not to blame for any portion of the overcharging problem.
“I’m concerned that people are thinking it’s an NBN-caused issue when I don’t believe that’s the case,” he said.
Morrow said he had taken a personal interest in reviewing line speed data.
“I want to know what percent of end users are out there buying a product that’s greater than what the line [is capable].”
Price construct quirks
But Morrow had a clear message for senate estimates last night: not every FTTN user is going to be concerned that they can’t reach the absolute top speed they pay for.
Due to the NBN pricing construct, a user with a line capable of 65Mbps – for example – has a choice: to buy either a 50/20Mbps plan and top out at 50Mbps, or to spend a few extra dollars chasing the extra 15Mbps above that by signing up to 100/40Mbps.
Morrow said technically 75 percent of all FTTN customers that had purchased 50Mbps or 100Mbps retail plans before August this year “could not achieve those speeds”.
Breaking that down, he said a shade under 100,000 FTTN users had purchased a 100/40Mbps plan, “and 65 percent of those could not receive 100Mbps”.
In addition, 31,000 users had taken up the 50Mbps product on FTTN, and 44 percent were not able to get 50Mbps.
But this is where things get tricky, and a more detailed breakdown of the numbers is needed to fully understand the extent of the issue.
“I will caution [that] if someone is getting 95Mbps that would be counted in the 65 percent that cannot [get 100Mbps in the figures],” Morrow said.
“[It’s the same] if I bought a 50Mbps plan [and was getting] 45Mbps.
“I’d caution that those numbers [include] anything that is below that absolute AVC speed.”
It then comes down to satisfaction levels: at what point consumers are happy with their service despite it being below the speed tier they paid for.
This sentiment is reflected in the numbers the ACCC released earlier this month when it revealed Telstra had overcharged some customers.
Of Telstra’s FTTN customers sold a 100/40Mbps retail service:
- 44 percent could achieve the 100/40Mbps they were sold.
- 36 percent had a maximum download speed between 51Mbps and 99Mbps. These users – according to NBN Co – may still be happy to pay for a 100/40Mbps to get the extra line speed above 50/20Mbps. It would simply be down to how much the customer was willing to pay in their search for speed.
- The remaining 20 percent of users were most likely to be aggrieved at what they were sold.
Morrow cautioned last night that NBN Co did not want to police users whose line speeds fell into a grey area where they didn’t get what they paid for but they weren’t unsatisfied.
“We don’t know what the interaction was between the RSP and the consumer,” he said.
“A downgrade is only going to [be needed] if the RSP and end user feel that’s appropriate.”
Line speed data release
Morrow also appeared to back away from a plan to force the hand of RSPs to publish – or make available to their users – accurate data on the maximum attainable line speed of their services.
Both NBN Co and the RSPs measure this but it is often not passed on to the end user.
Morrow has made it clear repeatedly that he believes RSPs should make the data available.
He clarified last night that NBN Co would only step in and do so as an absolute last resort – and even then, “confidentiality agreements with the RSPs” could prevent NBN Co from releasing the data.
Morrow said he had not sought advice on whether the confidentiality clauses would stand in NBN Co’s way, given he wanted other parties to do the data release anyway.
“It’s not our responsibility, but I will go above and beyond our responsibility if the industry doesn’t respond,” he said.
“I’m confident that they will. I’m confident that the current government cares about this. I’m confident that the regulatory bodies are investigating what’s necessary.
“Only if they don’t and only if we are not violating any laws or agreements will I publish that information.
“But I’m banking on the fact I and the company won’t have to do anything.”