As a technologist at heart, and as an organisational, customer and user experience expert, the Australian NBN project tugs at my heart strings. A nation-wide infrastructure project, driven by the government, with a push to get everyone communicating better. When the project was initially announced all those years ago, anyone with an inkling of technical nous was falling over themselves with joy, and the utopian dream of ubiquitous connectivity. How things have changed…
There was an interesting article in online IT news site ZDnet the other day. In it, Bill Morrow (the current CEO of NBN Co) tries to shrug off the fact that CVC pricing has nothing to do with poor end-user experience. You can read it here (ZDnet).
“I don’t believe that the price of the CVC has anything to do with that experience the end user is having. We have a lot of evidence against this … that’s not really what is driving any kind of experience issues for them.”
Bill, geez. Maaaate. What were you thinking?!
To understand why Bill is so very, very wrong in his assessment of his end-user’s experience, we need to dive into things in a little more detail.
Connectivity virtual circuit (or CVC for short) is the thorn in the side of every retail service provider (RSP). It’s a usage fee, charged by NBN Co for data transmitted over the NBN network. Providers need to buy up allotments of CVC for each interconnect point (POI) that they are servicing their customers from. And of course, the more CVC they buy, the less contention there is for the end-users of those providers.
Businesses are built to make money: welcome to the world of capitalism. Rightly or wrongly, most of them will look to balance their customer’s experiences with the profitability of their organisations.
Here’s an example; most end users currently connect to the NBN network on a 25Mbps plan. That’s the speed that they can download ‘the things’ at. A provider might have a thousand customers (or more) connected to a POI. To get data in and out of that POI, NBN Co charges a provider usage bandwidth fees (CVC) that they need to buy in order to service their end users. So, a provider buys a 30Mbps allotment of CVC for a particular service POI. That 30Mbps has to be shared between all the users of that POI for that provider. Sure, the RSP could buy 30Mbps for each and every customer, and guarantee that they will always have the ability to use all the throughput that they can… however, the resulting cost would be many hundreds of dollars per month, per user. No end user will buy that service unless there is absolutely no alternative.
Providers instead choose to buy only 30Mbps of CVC, and let all of their users ‘contend’ for it. So when all of those users come home from work on a Friday evening, and flick on the Netflix at around 7.30pm after a bite to eat, the internet all comes to a grinding halt. Potentially thousands of users all contending for a fraction of the CVC allotment…
The CVC allotment immediately becomes a bottleneck, artificially limiting the rates at which end users can consume data.
In comparison to similar national networks, the CVC fee is an oddity. It’s not unique, but it’s certainly not standard, nor best practice. Networks in countries like Singapore or New Zealand do not have a similar fee. Instead, they only charge a flat connection fee per month to the provider. This means that if they supply a 10Mbps connection, or a 1000Mbps connection, there is not a major difference in the cost for them to deliver over that network. As such, we see Singapore providers delivering residential gigabit connections for circa $70 a month. Contention in the network still remains, however it moves to areas where the constraint is a little more physical – like the connections between countries, or the connections between major providers. Sending a large file for work on a Friday night will work as blazingly fast as possible, as it should.
Oh, and of course these providers build their networks to be best in class. That way all customers consuming as much of ‘the things’ as they can at any time of the day wouldn’t cause the whole thing to come crashing down. Simples.
Perhaps Bill says pricing has nothing to do with user experience because he defines experience differently. For example, the fact that the service is connected and data can be transmitted according to the measure or target that he (and NBN Co) are bound by might be all he’s looking at. Sure, in that definition, price is not a factor, because the ‘target’ has been met, and service has been ‘delivered’.
Customers do not see it that way, though. When a customer buys a service from an RSP, they aren’t buying a part of a service – they are getting the whole thing. From the phone call they make to order the service, through to the bill they get every month, as well as all that service delivery stuff in between. It’s all part of the experience.
The NBN delivers the majority of that service; most of the the physical parts. The connection from the POI, to the street, to the house, to the network termination device (NTD). Then there’s all of the stuff in the back that makes it all work, and that ends up getting you connected to the provider’s network. NBN Co is responsible for all of this, much like an electricity provider would be. The RSP handles the connection from the NBN to the internet, end-user support, billing, and the rest. Wow… not much, in the grand scheme of getting the service where it needs to go.
NBN Co are a wholesaler. They sell ‘the things’ to RSP’s, who then go on to sell them to end users. Perhaps Bill thinks that end users are defined as the RSP’s..? They certainly are his direct customers, that’s a fact. Make no mistake though: defining end users in that way would be the wrong way.
Back to purpose
The idea behind the NBN in the first place was to squash inequity in communications for all Australians. To foster innovation and growth. To provide societal benefits. To connect us all.
There’s a bunch of rules and regulations that encumber that purpose, and they are defined in the government’s Statement of Expectations (NBN Co). Much of that document was written with political partisan slight, as is unfortunately the norm in a two-party preferred political system. However, the original idea of the NBN remains, with slightly different wording.
Holding that purpose, Bill’s statement misses the mark entirely. It’s not possible to achieve that purpose whilst ignoring parts of the system that you have created and are upholding as gospel. Every part of NBN Co should be coming together to deliver on that purpose, and not do wasteful things that get in the way of achieving it.
The CVC is an example of stuff that ‘gets in the way’. It doesn’t actually help to deliver any kind of value to end users, and yet it is held on high like a flag planted on the summit of Mount Everest. It’s only reason for being is to help prop up a severely flawed economic model. A far better solution would be to build an organisation and its processes and procedures around achieving a single goal: delivering on the purpose of connecting everyone. If that means a visit to the minister’s office to highlight the fact that their measures and targets are imaginary, unachievable, or downright stupid, then that’s what needs to be done.
So, Bill… maybe you need to go back and explore your commitment to the end users before you start throwing around terms like ‘evidence’ in conjunction with user experience. By making such a statement, you’re showing us that either your hands are tied and you do care, and are saying it anyway… or you don’t care, and are saying whatever you want in contempt of all Australians. Either way, it’s not a good look for an extremely high-profile leader of a GBE…
We deserve better.