Category Archives: Regulatory

Regulatory

Broadband Speed Claims

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On July 27th Ry Crozier published an article about the ACCC consultation paper on Broadband speed claims. It contains a number of quotes from this short essay I wrote in response to some questions he put to me. I have edited that essay a bit and publish it here. It may form the basis for a response to the consultation paper. 

Over the more than twenty years I have been designing, building, operating and managing ISPs the constant demand from users has been “make it faster!”

The pinnacle of this fetishising speed was the National Broadband Network, which would deliver fibre, the thing everyone saw as synonymous with speed, to everyone’s home.

Sadly selection for one characteristic often comes at cost to another. While everyone obsessed with how many megabits or even gigabits of bandwidth would be delivered to their houses very few people listened to those of us who questioned what other parts of the network would cost to use and how they would be monitored and managed.

The NBN’s 121 points of interconnect added great cost and complexity to retail service provider networks as well as the duplication of cost during the migration from legacy networks to the NBN.

I believe the key issues for RSPs since NBNCo started designing and building it are:

  • The high cost of Concentrating Virtual Circuits per megabit creates a huge incentive to provision them scarcely.
  • The numerous points of interconnect scattered all over the country impose large standing costs with very few customers, certainly at first, again creating a huge incentive to provision them scarcely.
  • NBNCo refused visibility to the utilisation of their Passive Optic Network or their “transit network” but still insisted that RSPs didn’t need to see that information because they would manage it to suitable SLAs.
  • The worst case scenario would be that a change in NBN technology or project goals would see an RSP with customers spread across their own DSLAMs, wholesale DSLAMs, NBN FTTP and any other access technology in the same region, each with its own overheads.

We are seeing the effects of scarcity of NBN RSP POI backhaul and CVC bandwidth in many parts of Australia. For every example of an end user with a high speed port seeing slow downloads there is an example somewhere else of a user with brilliant performance. We are seeing the effects of the worst case scenario where few customers are downstream of a POI and the initial “free” 150 megabits of CVC hasn’t been exhausted. Those customers are the lucky ones! They have abundant bandwidth in their access network so their Internet experience is governed largely by the quality of their ISP’s network.

In my time as a regulatory manager for an ISP I had numerous arguments with the enforcement branch of the ACCC about “speed” claims. They hated “up to” and could not understand that ISPs had no visibility to the Telstra copper that would be used to provide the Telstra wholesale DSLAM service.

Readers may remember iiNet and Internode publishing line sync heat maps of Sydney and both organisations published network traffic graphs for much of their lives showing how hard the network was being used. Ironically those heat maps became one of the reasons the NBN came into existence and with the NBN there is no transparency to access network performance at all.

Readers may also want to ponder the limited availability of prawns and oysters at the all-you-can-eat salad bar.

While I have great sympathy for the ACCC’s position that ISPs should be able to inform customers of what “speed” their Internet service will work at even with an abundance of bandwidth in a private access network the entire global Internet is not under the ISP’s control and the performance of individual services on the Internet will vary massively. While this is not a reason for ISPs to not disclose their traffic management practices and utilisation it is certainly something that makes it a “wicked problem”.

Traffic shaping is all about picking losers. All that giving a packet “priority” means is it experiences less delay within the network. The least worst case for a packet is to be pushed back in time until a hole in the data stream can be found. This is like a spatula applying icing to a cake. The worst case for a packet is to be shaved off like a plane flattens a piece of wood by removing all the bits that aren’t flat. The effect of this on your Internet is to slow your page loads and file downloads, cause your video player to “buffer”,  your videoconference stream to break up and your voice over IP to stutter. It might even cause some applications to stop entirely or be unusable.

In our with-us or against-us world it is very hard to have a rational discussion about these issues. I’m not laying “blame” or suggesting any player is operating maliciously in the ecosystem.

Retail ISPs can buy global Internet access in capital cities for a few dollars per megabit. They have no incentive to create artificial scarcity in this layer. This isn’t the place to look for a problem with NBN performance.

Operators of legacy DSLAMs have some mixed incentives. Their entire network has been declared obsolete by the very existence of the NBN. There is little incentive to make capital expenditure on improving the backhaul capacity of those networks for the (hopefully) months of operation left before FTTN migration starts and relieves the demand.

NBNCo will doubtless claim that all the performance problems end-users have with RSPs would go away if only RSPs would purchase enough $15 to $17.50 per megabit CVC. Or should I say “up to $17.50”?

In politics you never have an inquiry unless you know the likely outcome. This review is going to make it plain that RSPs need to purchase more CVC. This is only affordable for them if retail ISP prices rise or if the NBN operating company reduce their charges.

Given Telstra warned earlier this year that NBN costs would reduce their Net Profit by around $2b pa once the NBN is rolled out this enquiry is likely the first phase of a plan that will see a significant rise in the price of NBN delivered ISP services in Australia.

It’s time for the NBN company to reduce the CVC charge significantly and to be more transparent about the link utilisation within its network. That will make it clear to consumers which RSPs have sufficient capacity.

Regulatory

How Data Retention affects web hosting service providers

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The more I deal with Data Retention the clearer it is the Federal Government have bought themselves a disaster. Over the years public servants and politicians have not understood the difference between hosting content on the Internet and connections to the Internet. As a result companies that provide hosting of websites on hardware that belongs to others (like AWS) and no other access to the Internet fall into a peculiar gap.

To be required to ‘Retain Data’ under the new Part 5-1A of the Telecommunications (Interception and Access) Act (which is so new AustLII doesn’t have it consolidated yet) an entity must be at least one of:

What ordinary people think of as an ISP is really a Carriage Service Provider because the interweaving of the definitions mean a business that isn’t a licensed carrier providing services using services provided a licensed carrier almost always becomes a CSP.

So what does that make a pure web hosting business?

Web hosting services are definitely Content Services under Schedule 7 of the BSA.

They are also defined as ‘Internet Content Services’ under Schedule 5 of the BSA.

So the question is ‘are they Internet Service Providers’?

The definition is “For the purposes of this Schedule, if a person supplies, or proposes to supply, an internet carriage service to the public, the person is an internet service provider.”

Parsing that we need to understand the words.

  • Person – a person at law i.e a company
  • “internet carriage service” means a listed carriage service that enables end-users to access the internet.
  • end-users – not actually defined in the BSA but we can take it to mean users of the internet
  • public – the Act contains this “Note: If a company makes internet content available for access on the internet, and an individual obtains access to the content using an internet carriage service, the company and the individual are end-users in relation to the carriage of the content by the internet carriage service.”

So it looks like the Parliament put a nice clear indicator of their intent right in the Act. On the face of businesses that operate websites are end-users of the Internet.

But if the owner of the website pay a hosting business, who allocates IP addresses to its customers and carries IP packets from an upstream ISP to the web server, that is ISP-like behaviour that a reasonable person would think would be captured by Data Retention, but the connection to the Internet is happening entirely within the web server which only looks like a carriage service if you squint very hard.

Squinting at Section 87 of the Telco Act:

Carriage service providers – Basic definition

(1) For the purposes of this Act, if a person supplies, or proposes to supply, a listed carriage service to the public using:

(a) a network unit owned by one or more carriers

And the definition of Listed Carriage Services is in Section 16:

Listed carriage services

(1) For the purposes of this Act, the following carriage services are listed carriage services:

(a) a carriage service between a point in Australia and one or more other points in Australia

So is the same Ethernet port, CPU and memory two distinct points or one point? If they are two distinct points then Data Retention would apply, if not it wouldn’t.

And if the server is a WEB server, what part does the claimed STRONG prohibition in the new Part 5-1A of Act against retaining web browsing history play?:

(4) This section does not require a service provider to keep, or cause to be kept:

(ii) was obtained by the service provider only as a result of providing the service

Note: This paragraph puts beyond doubt that service providers are not required to keep information about subscribers’ web browsing history.

If you were cynical you would conclude that the only reason Internet access providers don’t have to record web browsing histories is because Internet content providers are required to record it already. But only if the web hosting operator is considered to be a carriage service provider.

At some point this is likely to be tested in the Federal Court and High Court. That will be fun to watch.

Regulatory

Everything on demand?

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Grahame Lynch, publisher of CommsDay wrote a piece yesterday that got me thinking. I wrote the following as a reply to his post to Facebook.

The future of lean back entertainment is everything on demand. Broadcasters today can still earn good to great money for advertising on live sports events but it’s a race to the bottom for the filler ads on the reruns of Gilligan’s Island on the digital dividend junk channels. I’m not currently buying ad spots but I believe the News shows and early evening still command a reasonable premium because they are watched live. Other entertainment shows are being recorded on PVRs and the ads skipped. The PVR industry, under the influence of broadcasters under the Freeview brand have tried to limit the amount of storage in PVRs to 1TB because they know every show stored in the box is another lost opportunity to display ads during live shows. When you add VOD services operated by the PVR vendor there is an added incentive to reduce recording because it impacts VOD revenue. Along comes Netflix with the equivalent of a infinite back-catalogue of TV shows and old movies. Binge watching ensues.

The ISPs deluded themselves that they would get to clip the ticket on video services but when the opportunity to do it via their monthly access charges came along they stuffed it up. They _are_ dumb pipes and every time they try to be anything else it’s either by being highwaymen holding customer performance to ransom or by building the sorts of bundled-with-crap services only telcos can dream up. To win, build a set of products that customers need, price it to make a profit, provision, rate and bill it correctly first time every time and provide awesome customer support services. But the commercial model of the NBN makes it very hard to make a profit unless you have vast numbers of highly profitable low consumption customers. Many of those are quietly shifting to mobiles as the PSTN is turned off in NBN service areas.

Fixed line ISP retailers are going to have to raise their retail prices or face sharply falling profits.

Years of begging the ACCC for increased margins by forcing the reduction of Telstra’s wholesale prices in a market with a dominate ex-incumbent with three parallel private access networks have left them with no way out.

Regulatory

VDSL2 in basements and carrier powers

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In Australia companies that sell telecommunications services are called Carriage Service Providers. They don’t have to hold a “carrier license” to sell services.

A carriage service provider that wants to own cables or run radio links must hold a carrier license in Australia. This costs money and comes with compliance overheads. In exchange the government gives carriers certain rights, particularly “land access” which means the carrier can install cables on crown land like footpaths and even on private property like farms, basements and even your back yard.

These access rights are limited. For instance building owners own the cables in the risers in buildings unless they were installed by a specific carrier who has labelled them as their private property. The right is specific to servicing a customer so you can’t demand to install your cable on the off chance of landing a customer later. Finally, the carrier doesn’t have a right to have power delivered to active equipment. The access powers were designed in an earlier era of copper cables.

Of course carriers have been able to strike access agreements with building owners to provide access to power and building cables.

Where all of this gets interesting is when a carrier like NBNCo or TPG wants access to a basement. They are entitled to serve notice that they need to install cable to service one or more customers. The building owner has limited rights to refuse access but isn’t obliged to provide access to power or in-building cabling.

So when a carrier comes and demands access to your building and the terms of their access agreement state no other carrier is entitled to “interfere” with their services when they use your building cables and that you are obliged to provide them with electricity think carefully before signing the agreement. The TIO arbitrates land access disputes so you might like to call them if you think you’re being treated unfairly. You must allow licensed carriers to access their customers in your building but they must pay for power if they need it and they can’t demand exclusive access to your riser cables. They can install new cables in the riser at their expense.

Of course the whole issue of in-building interference is mostly a reason to insist on access monopoly. The real reduction in speed over sub 200 metre loops inside buildings is negligible, from 100Mb to perhaps 90Mb but that isn’t the narrative most people want to hear. That avoiding this reduction in potential maximum speed comes at a premium cost of say $200 per year of lost competition won’t dawn on them until they get the bill.

Don’t believe me? Go read Ericsson’s document, page 9.

Click to access Vector_globecom2009_final_v2.pdf

The image at the top of the post is from that page and shows performance of VDSL2 over 0.5mm copper loops commonly found in riser cables.