ISPs against broadband speed regulation

ISPs say nearly every factor affecting individual users' speeds are out of their control, including the type of network technology, backhaul capacity, end-user hardware, distance to the exchange, and weather.

Australia's internet service providers (ISPs) have spoken out against the proposal by the Australian Competition and Consumer Commission (ACCC) to force them to report accurate broadband speed information to customers, saying many of the factors affecting speed fluctuation are out of their control.

The ACCC a year ago suggested monitoring broadband services in an effort to encourage competition between fixed-line broadband retail service providers (RSPs) and aid consumers in making more informed purchasing decisions, with a discussion paper released in July.

The submissions from Optus, TPG, and Telstra were all against the proposal, while the National Broadband Network (NBN) company favoured it.

TPG's submission [PDF] said the regulator should not step into an area already taken care of through competition.

In addition, RSPs should not be forced to provide information on speeds because many of the factors affecting speeds are out of their control, TPG said.

"There are a number of factors that affect an end user's perception of 'speed', including the type of technology used, backhaul capacity, end-user hardware and connection method, source of content, distance to exchange, weather, interference, quality of the connection (cable, copper wires). Many of these, as noted in ACCC's Information Paper dated July 2011, are beyond the control of RSPs," TPG pointed out.

"Consumers are, in many instances, not aware of the extent of those issues and often will not understand that local issues, such as underlying computer and network resource consumption that may or may not be known (eg, virus traffic or unknown download traffic), and third-party issues such as congestion at, or a poor quality of, data source, can be affecting their perception.

"These factors limit a RSP's ability to provide representations of actual broadband speed that is likely to be attainable by consumers at their premises."

Telstra's submission [PDF] also pointed toward the many factors that affect a user's speed, such as "the performance of devices, Wi-Fi or cabling within a consumer's premises, the line speed of the broadband service, the capacity of the backhaul network to cope with changes in aggregate customer demand at different times of the day, and the performance of remote servers and their connections to the internet", making it difficult for RSPs to provide accurate information.

"These factors are all variable and many of them are outside the control of the RSP," Telstra said.

"Consequently, it is not possible to accurately forecast a specific speed for any individual customer for any specific time. The best that can be done is to forecast a probability that the actual speed experienced will be within a certain range of speeds."

Telstra added, however, that ACCC guidance on speed claims should be updated to allow more flexibility in speed reporting, as well as minimum expectations for such information.

While Optus' submission [PDF] agreed with the ACCC's objective of ensuring consumers receive clearer information concerning speeds, it said this would likely not be achieved through an increase to the regulatory burden on ISPs.

"There needs to be better recognition of the different factors that influence speed or performance, many of which are outside an ISP's control. A critical first step to delivering this improved transparency is to understand why performance information is largely absent from the market today," Optus said.

All that would result from regulation on the matter is ISPs constantly risking breach of the rules thanks to factors outside of their control affecting speeds, according to Optus.

"Given the technical limitations of legacy-based services, where the length of the copper runs and quality of the copper means that performance can differ on a premise-by-premise basis, it is not surprising that ISPs are reluctant to advertise speeds," Optus said.

"The benefits to be gained from providing performance information are likely to be outweighed by the risks of breaching the ACCC's guidelines and facing enforcement action and reputational damage."

Optus also pointed out that NBN's high CVC charge forces ISPs to "balance service performance and price to retail customers".

In NBN's own submission [PDF], it said it "strongly agrees" that consumers should be provided with better broadband speed information in addition to download quotas and pricing, calling it a "win-win" for both consumers and the industry.

"Network operators are responsible for the performance of their part(s) of the underlying network, and provide relevant information about that network to RSPs. The RSP is then best placed to provide end users with performance information, including service speed, regarding their retail products," NBN argued.

"For RSPs and industry, providing clear and accurate information about speed will result in greater customer satisfaction, lower churn, and reduced cost in dealing with dissatisfied customers. It is also an investment which will likely increase brand loyalty and arguably mitigate regulatory risk."

NBN suggested that speed information should also be provided on mobile services due to "increasing convergence" in the industry. Telstra disagreed with this in its submission, calling Australia's mobile speeds "world class".

The ACCC last month published submissions on the matter from the telco industry with the Australian Communications Consumer Action Network (ACCAN), supporting the proposal that consumers be provided with better information on fixed broadband speed and performance.

"We fully support the ACCC's investigation into this issue, and urge the commission to implement guidelines and other measures that will result in clearer information for consumers," ACCAN CEO Teresa Corbin said.

"ACCAN asserts that consumers should have access to information which helps them compare services and describes how the service will work for them.

"The proposed Broadband Performance Monitoring and Reporting Program, which aims to test service performance, would also help to support and verify the speed claims made by RSPs. Information on any prioritisation over the network that occurs should also be presented to consumers."

In a joint submission [PDF], Communications Alliance and the Australian Mobile Telecommunications Association (AMTA) agreed that while more information on broadband speeds should be provided to consumers, it is questionable as to how this could be achieved realistically.

"Industry strongly believes that it is important to focus on principles, given that it is not realistic to make deterministic statements about speed and performance for individual customers," the joint submission said.

"The market and technologies are also highly dynamic. Any attempt to prescribe a solution will quickly become outdated and there is a real risk that any prescriptive approach would stifle innovation in the industry.

"In this regard, most industry participants remain deeply sceptical as to whether the ACCC's proposal for a broadband quality monitoring regime in Australia would achieve its objectives."

AMTA and Comms Alliance added that for smaller ISPs, adhering to such a regime could have anti-competition effects.

Instead, the two bodies recommended that Comms Alliance create an industry guideline on broadband performance in collaboration with the telco industry, the ACCC, AMTA, the Australian Communications and Media Authority (ACMA), the Department of Communications, and ACCAN.

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