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NBN pricing review adds new plans, CVC pools, and TCP/IP header overhead

Layer 2 provider to cater for headers used in layers 3 and above.
Written by Chris Duckett, Contributor

Two charismatic gentlemen: Minister Paul Fletcher and NBN CEO Stephen Rue

Image: Chris Duckett/ZDNet

The company responsible for deploying the National Broadband Network (NBN) has announced the outcome of its wholesale pricing review, with the company confirming its September plan to add 100/20, 250/25, and 1000/50Mbps speed tiers, allowing retailers to pool unused CVC on a national basis, and deciding to add an allowance for TCP/IP headers above its layer 2 remit.

The extra bandwidth allocation to its layer 2 services will only be applied on the downstream where network capacity permits from mid-2020, NBN said.

"RSP feedback to this proposal was strongly positive. Subject to internal operational requirements, NBN intends to introduce an overhead allowance for the downstream component of the majority of NBN Ethernet speed tiers delivered over fixed-line technologies," NBN said.

"Where possible, NBN Co will provision this allowance into its wholesale speed tiers to accommodate protocol overhead, which includes the code used to ensure the correct delivery of data packets that otherwise impact a customer's broadband speed."

Gigabit plans would not receive the allocation.

They actually did it: ACCC decides NBN needs to cater beyond its layer 2 remit

On the CVC front, a constant pain point for retailers, NBN said it would extend the current CVC pooling process for its discount bundles, which can currently happen at its points of interconnect, into a national pooling mechanism. This change is due to happen in May 2020.

"NBN Co will extend this pooling mechanism to the national level across RSPs' fixed line and fixed wireless services," it said.

"RSPs will be able to more cost-efficiently purchase capacity to serve fixed and fixed wireless customers across all Connectivity Serving Areas anywhere in Australia, making it simpler for retailers and helping them to manage costs."

The company also confirmed it would introduce plans at the 100/20, 250/25, and 1000/50Mbps speed tiers in May.

The wholesale cost of the new plans, respectively, will be AU$58 per month for 3.75Mbps of included capacity, AU$68 per month with 4.75Mbps of included capacity, and AU$80 per month with 5.75Mbps of included capacity.

The included capacity would be bumped up by 0.5Mbps for all three plans in May 2021.

See also: Snake and ladders as Australian broadband realigns towards NBN

"In response to RSP, ACCC and industry calls for price reductions on entry level wholesale products, we introduced a modified 12/1 Entry Level Bundle on 1 October 2019, and we fast-tracked a rebalancing of our 25Mbps bundle discount, which will be implemented on 6 December 2019," NBN residential chief customer officer Brad Whitcomb said.

"Since 2016, we have more than halved the effective wholesale price of CVC, which applies to purchased capacity."

Minister for Communications Paul Fletcher hailed the recent increase in 12Mbps plans on the NBN as "great news".

"The introduction of the discounted entry level wholesale bundle has been successful in helping more Australians get online, with the take-up of the 12Mbps bundle more than doubling since the discount was introduced in October," he said.

Last week, former Communications Minister cum Prime Minister Malcolm Turnbull called the NBN a hell of an achievement.

"There is no country, comparable developed country, which has as ubiquitous availability of high-speed broadband as Australia," Turnbull said at the StartCon conference.

"Ubiquitous broadband is a really good idea. The way Labor went about it was insane, certifiably insane. The New Zealanders did a much better job." 

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