NBN Co's 50Mbps push drives up 'underperforming' services

NBN Co’s move to set 50Mbps as the default minimum on its network is leading to an increase in the number of services that “underperform”.

The result is revealed in the second release of numbers under the Australian Competition and Consumer Commission (ACCC) broadband monitoring program, and is set to cause yet more discomfort for NBN Co and the government.

Almost all major retail service providers (RSPs) were stung last year for putting customers on speed tiers that their lines were physically incapable of supporting.

Yet, the ACCC’s latest round of speed tests show that “a minority – but nevertheless significant – number of tests (7.4 percent) failed to achieve 50 percent of the RSP’s plan speed.”

That this is still occurring, despite the regulatory crackdown, points to a more recent change in the network being the likely cause - and this is confirmed by the report [pdf].

“During the second quarter of 2018, a significant number of NBN fixed-line plans migrated to higher speed plans, and a number of RSPs repositioned to make higher speed plans their default product offer, which would tend to increase the number of underperforming services,” the ACCC report revealed.

The report defined an "underperforming" service as one where "no more than five percent of the speed tests that we conducted over the service achieved a speed that was above 75 percent of the maximum plan speed."

"NBN Co set initially temporary - but now permanent - retail pricing for its fixed line services this year, which has the effect of making the 50Mbps tier the most attractive to resell."

The network builder has consistently trumpeted the take-up of the 50Mbps plan, both by new users as well as existing users being upgraded from lower-speed 12Mbps and 25Mbps tiers.

The new 50Mbps plans come bundled with a set amount of connectivity virtual circuit (CVC) bandwidth, which is designed to improve the performance of most connections.

However, it has not been clear until now how well the network can support services sold at these higher speeds.

NBN Co has only sporadically released figures on the numbers of mostly fibre-to-the-node connections that are physically incapable of achieving a downlink in excess of 25Mbps.

The last set of figures was released in August last year and portrayed six percent of connections as being in this category.

That this is roughly in line with the 7.4 percent measured in the ACCC tests would suggest this remains a problem for the network.

Such users may need to be downgraded again to 12Mbps or 25Mbps in future, and the onus for that move is likely to fall to RSPs, given new rules by the Australian Communications and Media Authority (ACMA) which make it the RSP’s responsibility to test NBN line speeds before selling a service.

An NBN Co spokesperson confirmed to iTnews that the onus would be on RSPs to correct any issues.

“NBN Co provides retailers with estimated attainable wholesale speeds prior to an order being placed over the NBN access network, and weekly wholesale speeds reports for each of their active service," the spokesperson said.
 
“It is up to the retailers to sell the appropriate plans to their customers based on the speeds their lines can achieve, therefore we encourage people to talk to their internet provider about the actual speeds they are likely to achieve at their premises.”

The ACCC’s objective in analysing underperforming services was to try to work out how much they are dragging down the NBN’s averages when it comes to overall performance.

Unsurprisingly, they did impact the numbers, and it seemed the problem was worse for RSPs that had larger customer bases.

“We observe that – as expected – overall download speeds were higher across all RSPs when underperforming services are removed from the average,” the ACCC noted.

“Overall, underperforming services were found to decrease the average download speed by 5 percentage points, although its effect varies across RSPs: whilst it is minimal for Aussie Broadband (1.5 percentage points), it is instead very significant for Telstra (9.4 percentage points).”

Other results in the report largely mirror those tracked independently by iTnews around the typical speeds reported by RSPs in the evening peak.