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NBN lower-grade services 'not acceptable': Queensland government

By both sticking remote Queenslanders on satellite services and making them subject to rollout delays, NBN is preventing them from 'functioning as equals' in the digital economy, according to the state government.
Written by Corinne Reichert, Contributor

The Queensland government has said that the use of "lower-grade" services on the National Broadband Network (NBN) for those living in regional and remote areas of Australia is unacceptable and inequitable.

Joining the ACT government, which last week said the NBN will be outdated before the rollout is complete thanks to the use of FttN technology, and the NT government, which slammed NBN's "technically inferior" satellite service, the Queensland government used its submission to the NBN joint standing committee to recommend that more premises receive terrestrial connections rather than being put on NBN's Sky Muster satellite.

"The Queensland government has significant concerns that Queensland consumers in regional and remote Queensland may not experience the same NBN service quality and continuity as consumers in metropolitan areas," the government said in its submission to the Joint Standing Committee on the National Broadband Network.

"The number of Queensland residents living in centres with a population below 200 people is over 9 percent. The Queensland government would be very concerned if the original expectation of 4 percent of premises connected to satellite was exceeded. The NBN should be available on an equitable basis to all Queenslanders as far as possible, including equivalent costs, performance, and reliability.

"The widespread use of lower-grade solutions is not acceptable from an equity perspective."

The submission recommended that NBN's Sky Muster satellite service provide higher data caps for remote schools and improve its reliability, adding that NBN should roll out terrestrial services in satellite areas.

Both the current technologies being deployed and the delayed rollout inhibit the state's ability to "function as equals" in the digital economy, it said.

"These [satellite] services invariably provide a less functional customer experience, are more expensive, are subject to the vagaries of the weather, have limited capacity, and high latency," the government said.

"Reliable, low-latency, and fast internet access is critical to most businesses to conduct online marketing, sales, research, communications, download software, transfer documents, use cloud services, back up data, and generally stay in touch with the world of commerce. Any delay or inadequacy in the delivery of such services is damaging the economy of Queensland."

Calling Sky Muster a "last resort", the state government said Queenslanders on the service are inhibited by high latency, low reliability, small data caps, and slow download and upload speeds.

"At 16 February 2017, 16 percent of the premises covered by satellite in Queensland have been activated. Monthly data allowances for satellite services are already inadequate for many customers, and much lower than fixed-line services ... forecasts by NBN Co that it may take years for the software issues to be corrected is of great concern, particularly for Queensland customers in rural and remote Queensland."

NBN said in October that an issue with connecting users to its Sky Muster satellite service had been resolved, with a software upgrade that "didn't go to plan" to blame.

The Queensland government equated the low uptake of NBN services across the state to the shift to the multi-technology mix upon the election of the Coalition in 2013, and to the high pricing of services both in comparison to international standards and to pre-NBN services, with some retail service providers (RSPs) claiming they have been forced to make a AU$15 increase in pricing.

The Queensland government also criticised the lack of a three-year rollout schedule by which to track progress.

"The revised NBN Co website does not provide a transparent, holistic rollout schedule for the state which could be analysed by jurisdictions. The lack of such information inhibits gap analysis and future digital infrastructure planning and investment decisions," it said.

"It is unacceptable that a national project is not reporting publicly on progress against plan."

The government said it also wants more advice, consultation, and support from NBN and RSPs; a reduction in cost impediments when consumers are required to buy compatible devices; service affordability monitored among low-income communities; a mitigation of power outages for emergency services; an updated customer service guarantee for telecommunications; an independent study of the regional telco market; and the federal government to ensure that NBN's wholesale pricing will not negatively impact end users.

The submission also said NBN should ensure that communities have the ability to make emergency calls; there are fewer delays in repairing copper faults; its rollout is prioritised in Aboriginal and Torres Strait Islander communities; it publishes the expected performance on each kind of network technology; it publishes its average availability and restoration times; and it provides better information on how to sign up for NBN services, including for those with literacy difficulties.

In another submission published on Wednesday, Macquarie Telecom also took issue with the rollout delays and change in network technology, as well as the wholesale pricing structure, which it called a "period of market failure".

According to Macquarie Telecom, the wholesale market for NBN services is ineffective.

"The slow and stop-start rollout of the NBN has encouraged a wave of industry consolidation that has effectively removed 'pure wholesale' infrastructure from the market. Instead, the infrastructure connecting NBN to national and international networks has become consolidated in the hands of vertically integrated large retailers," Macquarie Telecom argued.

"Also at heart of the failure of the wholesale market to develop is the effect of the 121 NBN Points of Interconnection (PoIs), NBN's two-part pricing construct, and NBN's products set. RSPs outside the three or four largest -- all of which have their own retail businesses -- do not have scale to economically deploy at 121 PoIs."

Macquarie Telecom accused Telstra and Optus of not offering wholesale products on the NBN that they offer to their retail consumers, which is exacerbated by the connectivity virtual circuit (CVC) pricing structure and the inability of smaller carriers to connect to all 121 PoIs.

"It is not until an RSP has a significant number of connections that it can economically purchase CVC in that area and directly connect to the PoI," the submission said.

"Through this period of attaining scale, the RSP is reliant on a wholesale aggregation service which, in turn, makes customer acquisition highly problematic and uneconomical."

As such, Macquarie Telecom has recommended that NBN step in to deliver the full range of services from regional premises to PoIs.

Macquarie Telecom last year also recommended that NBN report its live net promoter score (NPS) real-time customer experience measurement in order to make customer service more central to its provision of wholesale broadband services.

Also publishing a submission on Wednesday, the Australian Communications Consumer Action Network (ACCAN) similarly recommended that wholesale service obligations and broadband standards be established; NPS and congestion issues be published by NBN; information on outages and repair timeframes be provided; Sky Muster data caps be increased; and only those "without alternative options" be put on Sky Muster.

Among other things, ACCAN also recommended that NBN provide more information on which networks it will overbuild; the ACCC monitor and report on broadband across all network technologies; network access should be enshrined in legislation; RSPs be forced to obtain informed consent from consumers before switching them to NBN services; and that the government work with Optus to standardise the shift from its legacy network, with an 18-month window for switching.

Last week, the Australian Medical Association (AMA) also reiterated its position that NBN's satellite technology is unsuitable for telehealth due to the slow speeds and low data caps in its own submission to the NBN joint standing committee.

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