Re: Ban unlimited plans
> 'using' an internet connection does not - use as many packets of data as you like. no animals will be harmed in the process.
WRONG! Those packets require require electricity to move. Last time I checked climate change was harming animals.
> yes, there are infrastructure costs, but these are already factored in.
WRONG! NBNCo GPON architecure is 2.5Gbps more data flowing across the network will require upgrading GPON and internal routers.
> yes, it costs more to deliever a 1000mbps service, but thats ok too - just charge the actual cost of providing the service.
WRONG! Every single FTTP connection is capable of delivering 1Gbps with no physical change. The cost of the hardware remains the same if it is turned on or not and irrespective of the speed. It is only when multiple customers start to transfer data concurrently in sufficient quantities that the limits in GPON and routers are reached, meaning that NBNCo need to upgrade hardware.
> unfortunately, we just chose a bad model for recovering costs.
Something we agree on. Labor chose a dogs breakfast for cost recovery: An artificial model containing high access charges and high data charges. The Liberals are tweaking the model slightly by reducing CVC costs to reduce the portion of revenue from CVC so that AVC prices cannot be reduced as quickly (if at all) ensuring that demand for higher speeds is muted.
Labor wrote in the NBNCo Corporate Plan:
"Despite the movement of residential consumers up the speed curve shown in Exhibit 9.12, the growth in AVC (PIR) ARPU is relatively modest. This reflects the small price differential between AVC tiers, and the decline in prices for the higher tiers. However, the consequence of more End-Users moving to higher speed tiers is reflected in the significant rise in the contribution of the CVC to overall ARPU, as increased speed drives increased usage."
AVC should have been set at <$10 wholesale to encourage everyone to connect. As services using more data grow, people will naturally increase their usage (e.g. Stan streams become high quality 4HD streams, instead of highly compressed SD with out the user touching anything). Every so often high end customers reach their quota and upgrade plans, enabling RSPs to purchase more CVC.
CVC revenue increases as quotas increase providing NBNCo with the revenue to upgrade hardware and reduce the CVC pricing. Reduced CVC pricing enables RSPs to increase the quota on plans as we've seen with ADSL.
A higher proportion of revenue from CVC incentivises NBNCo to offer faster speeds and maintain a congestion free network. For example upgrading from GPON2.5 to GPON10 has the potential to increase CVC revenue 4 fold delivering a rapid return on investment. The alternative is a high connection fee (AVC) meaning that NBNCo have less incentive to reinvest in the network because very few will upgrade. Evidence for this is the 13% and falling on 100Mbps and the inability of RSPs to develop a viable business case for faster NBN connections.