Telcos refuse to guarantee NBN speed

The Australian, July 24, 2017

None of the nation’s major telcos will guarantee that customers will experience super-fast internet under the National Broadband Network, or even that they will deliver the same speed packages being sold to them by the agency in charge of the $49 billion project­.

NBN Co, a wholesaler, sells a range of monthly connection packages to the telcos of 12 megabits per second, 25Mbps, and super-fast connections of 50Mbps and 100Mbps.

The telcos are also required to buy from NBN Co costly “bandwidth” to ensure those speeds can be achieved at peak times, such as after 5pm weekdays, when many people are using the internet at the same time.

Telstra, Optus, TPG and Dodo are all unable to guarantee that customers who sign up for a certain NBN speed tier will actually achieve those speeds, particularly during peak times. The failure of telcos to buy ­adequate bandwidth has led to people even on the highest 100Mbps connections achieving peak time speeds of as low as just 1Mbps.

While it continues to spruik NBN packages of 12, 25, 50 and 100Mbps, Optus told The Australian it did not “make speed guarantees” and that those speed levels were “not indicative” of the speeds customers would consistently experience.

“Speed tiers indicate the maximum upload and download speed that a service is provisioned at,” an Optus spokesman said. “The speed in each tier is not indicative of the speed that customers will experience at all times.”

Telstra’s Steve Carey said “maximum speeds referenced” were “not guaranteed” by the telco, which services about half of all existing NBN customers: “Speeds on the NBN vary due to quite a large number of factors. Some of these factors are managed by ­retail service providers like ­Telstra, others are des­igned and controlled by NBN Co.”

The monthly speed packages telcos must buy for each customer are known as access virtual circuit charges, and the bandwidth costs are called connectivity virtual circu­it charges.

NBN Co has been forced to impose high CVC charges in a bid to deliver a return to the federal government on the $49bn it has committed to the project by way of debt and equity.

Until recently, most telcos had been widely advertising “up to” speeds of 12, 25, 50 and 100Mbps.

However, the Australian Com­p­etition & Consumer Commission has announced a crackdown on the practice following revelations many users were achieving peak speed at just a fraction of that advertised.

Telstra said it had dropped “up to” speeds and was now referring to its top three NBN packages as “fast, very fast, and super fast”.

An Optus spokesman said the telco was awaiting ACCC guidelines before changing tack.

Sydney’s Jaime Ruggier, who works as an IT professional for a children’s hospital and separately as a consultant, said the NBN was riddled with connection problems and slow speeds, but that the problems lay with the telcos not buying enough bandwidth, not with NBN Co or the type of technology delivered.

“The problems is the (telcos) just can’t keep up in congested times,” Mr Ruggier said.

TPG chief operating officer Craig Levy said the group was ­unable to guarantee customers would consistently achieve 100Mbps from its top package.

He said TPG offered NBN Co’s 12, 25 and 100Mbps packag­es, but would now refer to them as “between 5Mbps to 12Mbps”; “between­ 5Mbps to 25Mbps” and “between 12Mbps and 100 Mbps”.

A spokeswoman for Dodo ­declined to comment.

There has been a substantial political debate over the types of technology used, with the Coal­ition moving away from the former­ federal Labor government’s costly fibre-to-the-premises rollout, to connect most homes via fibre-to-the-node connections, which cost half as much and are much quicker to deliver.

FTTN connections create a connection “node” for about 200 homes and those homes are connected to the fibre NBN network via existing copper phone wires.

The ALP has attacked FTTN as slow and the cause of speed and connection problems. However, experts increasingly disagree and say the high cost of bandwidth, built into the NBN by the ALP, is by far the biggest problem. “I think NBN fibre-to-the-node is fine,” Mr Ruggier told The Australian yesterday.

“Many clients I am dealing with are getting dropouts, but nine times out of 10 it’s the (telcos­) and not the NBN.’’

As revealed by The Australian last week, an estimated 2.6 million Australians in capital cities, except for Darwin and Hobart, will have their super-fast Telstra and Optus hybrid fibre coaxial cable internet connections, which deliver consistently high peak speeds of 40Mbps or more, switched off in coming months and will be forced to the NBN.