Wednesday, August 27, 2014

NBN and the Vertigan Report - economic modelling gone silly

Wednesday! Where has the first part of the week gone? Tonight, just the national Broadband Network.

Communications Minister Turnbull has released (part released; some of the content is redacted) his cost benefit study into the NBN. I haven’t had time to read it yet. I do want to comment, however, on some of the reporting.

As I write, my local area network connection shows a nominal download speed of 100 Mbps. As we all know, actual speeds are always lower than nominal speeds. I am on 100 MBps because I have my computer plugged directly into the wall socket. If I go though the modem, my nominal download speed drops to 50 mbps. That’s with one user.

I am on an ADSL connection over copper. Working via the modem, the connection speeds are sometimes so slow, not always, that I cannot watch a You Tube video, properly download some software. If I were to really set the house up in the way I want with the main computer in the front office plus wireless connectivity that would accommodate visiting friends  or another device of my own, my connection speeds are likely to drop to blazes.

I mention this now because the Vertigan report is based on some modelling by Communications Chambers. It is that modelling or more specifically some of the underlying conclusions that I want to address. Now before going on, I want to quote some of the reported conclusions from Communications Chambers (CC). I am quoting reports. I am happy to accept corrections.

Subject to that qualification, it seems that according to CC:

  • in ten years’ time, only 5% of Australian households will demand internet speeds of 43Mbps or more
  • The 2023 household median demand will be just 15 Mbps. CC reckons that this low demand needs to be seen in the context of the continuing benefits of video compression and the fact that 58% of households only contain one person
  • The growth in the number of households who use (the internet?, broadband?) had risen from 64% to 83% from 2007 to 2014, but this growth was driven by older single-person households who place significantly less demand on the networks than families.
  • At the busiest time of the evening, the average connection was used to just 1.7% of its capacity.

Sorry CC and Vertigan, you have really annoyed me. Let’s leave aside the question of what demand might be like if the bandwidth was there at the right price and just focus on me as a user, one who already has to pay a considerable price and cannot do all the things he wants when he wants at current connection speeds even though his nominal 

Now this single person older household demand driver is, just at the moment, writing this post. The email connection is on, one just arrived, but but my bandwidth usage is very low. Silly me, bringing down the average. Even when I post in a few minutes, my usage will be low. You see, what is relevant to me is not the average but the peak, and there I am already in a degree of trouble.

Our blogging friend AC has been in Poland. Poland has quite good bandwidth, apparently better than Australia in terms of top speeds, real connections over 100 Mbps. To save money, AC went for a 25 Mbps connection while she was there, then found that that 25Mbps did not work when it came to Skype video conference or even phone connections. The low bandwidth made for very poor quality, especially in reproduction.

This is 2013, not 2023. I am not getting value for money at the moment on my phone/broadband connection. I can’t upgrade the service to meet my peak needs because the pipes aren’t there, and I’m in a densely populated part of Sydney. Think what it’s like elsewhere.

None of this means that the NBN is the best solution. But economic modelling carried out to support a case does not help. That may be unfair. Perhaps the modelling is simply bad.

As I read this stuff, I thought what planet are these people on? The Vertigan report appears to give me a 2023 solution based on a 2103 reality that already makes me unhappy. Thoughts of tar, feathers, sharp poles with splinters came to mind! Not happy, Jan. 


A brief follow up now that I have had  chance to at least skim the underlying reports.

We are all influenced by our own experiences.

I am clearly not a typical internet user, nor are most people I know. I use the internet quite heavily for a mix of personal and professional reasons. So do they.

I am on a notional 50 Mbps download ASDSL broad band connection. That puts me already on Mr Turnbull’s notional target speed connection.

As of this morning, speed test shows a 6.34 Mbps actual down load speed, an 0.71  Mbps upload speed.  In a previous discussion, commenters explained the reason for the divergence between rated and actual speed. I won’t revisit that discussion at this point.

In broad terms, I generally don’t have a download problem, although this does get very slow from time to time. I do have a recurring and sometimes frustrating upload problem because I use photographs. Yes, I  can compress the photos, but sometimes I require high res and, in general, it’s just easier to use the photos as is.

The new things that I would like to do centre on upload. I wish to develop and upload new material. To do this, I have to learn new skills and will probably require new kit. However, once I have all this, it is nor clear to me that I can do what to do with my current upload speeds. I don’t think that I can.

Herein lies the rub with all these arguments. They rely on averages. They just don’t dig down deeply enough to find a Jim who already finds the 2023 projected usage patterns inadequate.


Noric Dilanchian said...

On reading the linked report below concerning the Vertigan cost benefit analysis of the NBN, my tweet @noricd today was this:

"Mostly true or mostly false? Public policy in Oz is gamed - govt, public service, & independent analysts eg #NBN."

Anonymous said...

The report appears to show that the Government FTTH model, which still relies on copper, will deliver $24 billion in benefits while the Labor FTTP model would have 'only' delivered $ billion in benefits. In other words, both models showed a profit. But stacking the review commitee with public opponents of NBN (Henry Ergas for one) instead of putting in through the Department of Infrastructure as Turnbull originally intended does not fill me with confidence. Our target is to be equal with South Korea 7 years ago. And they are currently upgrading.

I am convinced that the more bandwidth there is, the more it will be used, particularly the easier and more efficiently people are able to stream.

Anonymous said...

Jim, second comment:

1) forgive excessive crlf's in the above cut and pastes from pdfs. They were not apparent in the small blogger comment box. But I believe the stark differences between these two reports should be more widely publicised.

2) On your personal setup, the 100 mb you refer to is what is provided within your house via wifi or coax connection to your home lan. This is not related to the speed of the actual adsl internet connection you have.

While 100mb is ok for shifting stuff from one device to another within your home lan, it has no effect whatsoever on the speed of your actual external internet connection - which I think you think is 50 Mbs? Allow me a smile: my adsl connection is rated as 250k - just under what is workable for use of ABC iView for instance.

So I read books, and long posts, such as yours, instead of catching up on back episodes Desparate Housemates and whatever a Kashardian is :)


Rod said...

My ADSL2+ is notionally 24mb/s. However, since it is over copper it is only 6mb/s (depending on other users in the area too). I'm located about 2km from the nearest exchange. I'd be very happy to get the 24mb/s!

100mb/s sounds FAST but having something close to the maximum ADSL2 is something I would like... Beyond that might be useful for something that I don't know about using yet... and I'm in the young super-user demographic.

My work-place however, is a different situation and

A good way to find out how fast your speed really is, is to ping a test website. For example: is what I usually use.

Jim Belshaw said...

Mmmm, Noric. The IT Wire stuff a bit too heavy on the sarcasm for my taste.

kvd's points are very interesting.I am not too distressed by the scissors and paste aspect, we all do that, but the juxtaposition of the two is quite revealing.

Rod, I am not at my own computer at present, but ran the test on this computer twice eight hours apart. The download speed is 27.59, the upload speed just 1.12.

At the moment, my normal download speeds at home are okay for general purposes, although I strike the occasional problem. kvd, I do remember low speed dial up! Upload is sometimes more difficult. It can take a little while to post where photos are involved.

The big choke point in ordinary domestic use at present is in video upload of things like sporting matches.

I have been considering using podcasts as a way of promoting some of my ideas. Have wondered hos difficult that might be with current connections.