NBN Speeds Are Too Slow – And ISPs Aren’t Doing Enough To Fix It

NBN Speeds Are Too Slow – And ISPs Aren’t Doing Enough To Fix It
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Internet service providers are promising they will spend more money to ensure higher speeds for customers using the National Broadband Network, but it remains unclear how much difference that will actually make.

Users of the high-speed network have become increasingly vocal about congestion problems, especially during evening periods when thousands of people are watching streaming services like Netflix. That problem can occur even if customers are paying extra for one of the faster speed tiers the NBN provides.

The Australian Competition and Consumer Commission has ordered providers to start promoting more realistic speeds in their advertising, specifying evening peak speeds rather than quoting the theoretical maximum speed, which is hardly ever achieved.

Many factors can influence the speed of individual connections, and some are the responsibility of customers, including the placement of their Wi-Fi routers and the condition of wiring within their home. However, one factor which providers can control is the amount of Connectivity Virtual Circuit (CVC) they buy. In simple terms, the bulk network capacity they purchase and then share amongst all their customers.

Providers have tended to skimp on CVC, purchasing as little as they can get away with in order to minimise their own costs. On wired NBN connections, the average contention ratio across all providers is about 1:30, meaning that ISPs are assuming that only 1 in 30 customers will be connected at any given time.

Network builder NBN Co adjusted CVC pricing earlier this year making bulk purchases cheaper for ISPs. CEO Bill Morrow said during the company’s annual results announcement earlier this month that CVC purchases had begun rising as a result of the change, though he has flagged the possibility of further adjustments.

The major telcos have said they will be buying more CVC. Telstra predicts it will double its spend on CVC. “Fixed broadband usage is increasing, so that means we have to increase CVC and we intend to do that,” Vodafone general manager of broadband Matthew Lobb said when Vodafone launched its NBN plans last week.

While extra capacity would be welcome, actually avoiding congestion is likely to remain a problem for consumers. Even if Telstra doubles its spend, that implies a typical contention ratio of 1:15, which means sluggishness is still going to affect some people. Even for customers of the same provider, congestion levels may vary depending on where they are located.

The most practical step consumers can take is to avoid signing up for long-term NBN plans, and carefully comparing what’s on offer. Congestion can vary markedly between providers, so if you end up with an atrocious service, it’s handy being able to switch without being tied to a 24-month deal.

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Angus Kidman is editor-in-chief for comparison site finder.com.au and a former editor for Lifehacker Australia.

This article originally appeared in Digital Life, The Sydney Morning Herald’s home for everything technology. Follow Digital Life on Facebook and Twitter.


  • They don’t need to. They all keep up appearances of being “competitive” to keep the wet fish regulators off their backs but when they do a cost benefit analysis of improving their offering it doesn’t stack up.
    It’s the reason it took a government and not private industry to build a 21st century network in the first place… and look where that got us…

  • Angus,

    Glad to see you writing something for Lifehacker once again.

    If the ISP’s were actually provisioning there networks with contention ratios of 30 to 1 then most users would probably be getting a significantly better experience then they are currently experiencing as the ISP’s are actually provisioning there networks with contention ratios as high as 300 – 500 to 1.

    A sales representative on a major ISP (which also acts a wholesale NBN provider to a lot of smaller ISPs) recently cold called trying to sell their Premium NBN services and the key selling point for the Premium NBN services is that they guarantee a contention ratio of 25 to 1 for these services.

    During the call they said the contention ratio on their standard NBN services is typically 300 to 1 and can be as high as 500 to 1 in some areas.


    • Its the contention that kills it, but that’s driven by the cost of the bandwidth. The ISP’s get an amount for free, which isn’t much more than a single person using their full capacity, then pay something like $11/Mbps after that. Which gets passed on to the consumer.

      Problem is, nobody uses 100% of capacity 100% of the time, you’re only getting squirts of data in spikes. Something like 200 Mbps bandwidth can comfortably service a cluster of 32 for 90% of the time.

      But when you have 4 or 5 properties in that cluster streaming Netflix, theres suddenly not 200 Mbps to spread around, theres only 120. With another 10 properties gaming, surfing the net, or whatever else they’re doing. And that’s when the contention issues kick in. But its only for a 3 hour or so stretch.

      What the ISP’s need is a way to cheaply get that peak bandwidth need covered, without having to pay for the remaining 21 hours of the day that its wasted. Kind of like how electricity goes up in cost when peak usage causes surges at the power plants.

      Let ISP’s access more bandwidth during those surge periods, for something less than the $11/Mbps it costs. If it was $2 for a 3 hour block, they should be able to provide a 50 Mbps increase in the bandwidth available, which seriously reduces the contention issues.

      A simple process like that solves a lot of the ISP’s supply issues (ie, cost), which in turn solves a lot of users peak contention issues.

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