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The problems of transitional pricing

New all-fibre or part-fibre networks have to persuade customers to migrate from existing legacy copper networks. In the process, regulators and policy makers both in Australia and New Zealand have made the migration more difficult for the next generation network.

This opinion piece looks at how the ACCC missed an opportunity in 2009 and also at the impediment to migration caused by the Commerce Commission in New Zealand.

To read this, click on Economuse 2014-10-15

2014 review of retail broadband pricing

Every September, I review the ADSL2+ and corresponding NBN retail broadband plans to assess the state of price competition. Last year, I concluded that competition had stalled because ISPs were waiting to see realistic NBN wholesale prices and/or settling into a cosy oligopoly.

In the last 12 months, a couple of players (Exetel and TPG) have launched unlimited data plans; which may shake things up a bit. But, it wont help make the NBN more affordable – there are very users who want unlimited data.

To see the results, click Economuse 2014-09-23

Vertigan’s cost benefit analysis

Volume II of the Vertigan reports the cost benefit analysis (CBA) of the NBN. The focus was on the difference between the multi-technology mix approach now used and fibre to the premise. It is no surprise that the former is better in terms of cost and time to deliver.

The surprise was that a key study underpinning the CBA finds that only 5% of households will need 43Mbps by 2023. This has significant implications for the role of mobile broadband, discussed in this opinion piece.

This opinion piece also explores the idea that while there is no current killer application for high speed broadband, the impact of bestowing full speed broadband on traffic and innovation needs to be considered.

In Australia, there is no premium for speed on mobile networks. If the same applied to fixed networks, Australia would lead the world.

The 4 page opinion piece can be read by clicking Economuse 2014-09-15

Hobson’s choice with NBN Co. pricing

NBN Co.’s July consultation paper on pricing and billing has wilfully ignored the only serious option that has been put up against its own product and pricing construct. Unless it is changed, the NBN will not be affordable and will not increase broadband utilisation.

This paper calibrates the options against the 2012-2015 NBN Corporate Plan and other analysis.

It includes the “traffic model” as Option 6 and concludes that this will make the NBN more affordable and give the industry the certainty is seeks in future reductions in unit traffic charges.

The paper can found by clicking here: Economuse 2014-08-14

Option 6: Assessing the revenue impact of the “Traffic Model”

This paper complements others written about the Traffic Model. It is described as Option 6 because it was wilfully neglected in the Options considered by NBN Co. in its July 2014 consultation paper.
The wholesale tariffs in this paper were calibrated from retail broadband prices at September 2013 and the revenues are compared with those in NBN Co.’s 2012-2015 Corporate Plan (the only publicly available plan currently).
It is interesting to note that despite a very low entry level (Starter) tariff of $10pm compared with NBN Co.’s $24 pm (includes CVC component); the Traffic Model is viable.
The Traffic Model is a better match with real consumer expectations and policy goals than NBN Co.’s current revenue model.

The 4 page paper can be accessed by clicking Option 6