This week, Bill Morrow announced another tweak to CVC pricing which seems to imply a $1.75 cut in the current $17.50/Mbps CVC price as early as July. But even with this and tiered discounts (for which an implementation date has yet to be announced), CVC costs per end user are going to be double what the sector is looking for.
In the PC world we have seen that bigger chips and improved performance have been closely followed by more sophisticated software that eats up the new capacity. But, we have a chicken and egg situation with the NBN. We know that users are not prepared to pay for speed. Users will not need more speed until the applications require them. And the applications will not arrive until users have the speeds to use them.
We can cut through this impasse and unleash innovation if nbn™ Co. turns on speed with just one or two AVCs (say, up to 100 Mbps and unlimited). It would catapult Australia to the top of global speed ratings. More importantly, Australia would become the global lab for developers looking for ubiquitous, true broadband.
NBN is doing another consultation on CVC pricing with some of its customers. CVC pricing has been a problem for the NBN from the outset and these secretive consultations do not reflect the openness and transparency promised the current management team.
However, enough details have been leaked to make some comments on the latest ideas; which are due to be trialled from April. I just wish it would try the ideas I have been telling it for over 6 years now.
So, here it is: Economuse 2015-11-30
NBN pricing is back under the microscope with attacks from industry heavy weights like iinet’s Chief Technology Officer, Mark Dioguardi, and serial telco entrepreneur Bevan Slattery who recently called CVCs “evil, stupid and counterproductive”.
This column looks at the challenges for CVC pricing posed by iinet in the context of increased video streaming.
T o read more, click Economuse 2015-05-14
In the previous column, I argued that the TPG-iiNet merger would cause an alarming increase in industry concentration and less price competition. But with or without this merger the competitive process can still be strengthened with a few changes that will shore-up both competition and NBN Co.
To read how, click Economuse 2015-04-02
If iiNet’s shareholders accept the TPG offer and the ACCC approves this take-over (neither of which is certain), the prospect of vigorous retail competition in the fixed network is dim. The extent of price competition currently is debateable and increased industry concentration is irrefutable.
To read this column, click Economuse 2015-04-01
The next column will examine how the competitive process can still be strengthened, with or without this merger.