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NBN admits that broadband throughput is an issue.

2 September 2017

NBN admits that broadband throughput is an issue.

With NBN’s admission that they are struggling to deliver the promised connection speeds speculation is rising that price cuts maybe on their way to ease congestion across the network.

In a recent interview, nbn CEO Bill Morrow says that wholesale price cuts for NBN services are being contemplated to ensure consumers get the service they signed up for.

"What we are considering, and we are in consultation, is looking at a restructuring of the pricing mechanism," Morrow told the AFR.

"I am sympathetic with the many smaller retailers, in particular, who say I am stuck in this price war and I can't step up and raise my price to the end users. So, we are thinking can we restructure the CVC (Connectivity Virtual Circuit charge) and the AVC (monthly access charge) to have a minimum assurance of a certain quality of product . . . do we introduce a media streaming product?"

 

So what does that mean for nbn customers?

The nbn is seeking to change the way it calculates charges to Internet service providers. This change should result in the internet service providers being able to buy sufficient capacity that will ensure there isn't congestion at times of peak demand without having to charge their customers more.

Prices for CVC were adjusted downwards earlier this year, but only if providers purchased large amounts, an approach that benefits larger ISPs significantly more than smaller ones. Morrow’s commentary on a changed model is effectively a signal that the existing price cuts haven't done enough.

According to Morrow, only 15% of nbn customers are experiencing congestion issues. With a total of 5.7million connected premises the 15% equates to 855,000 nbn customers who are experiencing below par connections.

 

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