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
The ACCC regulates the price of terminating calls on mobile networks. The bottom-up cost model it has been using was built around technology that is old. It is rightly concerned that any new bottom-up cost model based base on 3G could soon become redundant when operators start to carry voice over 4G – which they will within the term of the pricing determination.
With 4G (where voice will be IP based) and the NBN, there is no need to distinguish between voice and data as all traffic is bytes. The tried and tested way of exchanging bytes is peering and transit – which are unregulated. There are no termination fees for voice and SMS now – if they are carried as bytes over apps like Skype and Whatsapp. In this emerging context, there is no need to model costs or to regulate termination.
In the short term, the ACCC is considering using “actual costs” to model costs from the top-down – which is the same as the Building Block Method (BBM) the ACCC is now using in the fixed network. That seems the best approach for now. But, when voice becomes data (4G), the ACCC can step aside and leave it to the market.
To read the opinion piece, click here: Economuse 2014-08-08
How compelling is the NBN value proposition? From May 2014, the early NBN release sites are being disconnected from the copper and HFC networks.
The column looks at the implications of take-up and speed choices for NBN’s viability and the national interest.
It also shows how the alternative traffic pricing model (that I have advocated for a number of years now) would make the NBN more affordable for voice-only users and also make the NBN more competitive against mobile services.
To read the column, click here: Economuse 2014-07-21
In late 2013, the three Australian mobile operators reduced overseas roaming charges. But they are still way above cost. We can fix that!
This column compares domestic and overseas data charging for mobiles with particular reference to New Zealand; which is the most important destination for short-term departures from Australia. More importantly, governments on both sides of the Tasman share a concern over the costs of mobile data roaming with the draft International Mobile Roaming Bill 2014 providing an opportunity to match the European proposal that that mobile operators should not distinguish between use of data domestically and (initially) in New Zealand.
To see the column, click Economuse 2014-07-3
The focus of NBN Co. management has been on supply – stabilising the roll out of the access network under the new design rules intended to make the NBN available more quickly and more cheaply.
The focus needs to shift to demand – what pricing structure will efficiently recover costs, achieve policy objectives and promote the adoption and utilisation of the NBN?
This opinion piece explains why the current AVC/CVC pricing model is flawed and needs to be reviewed before the next corporate plan is completed.
For more, see Economuse 2014-06-10