Thursday, December 2. 2010Seen Through A Glass Darkly.....John Linton ....may have a 2,000 year old meanings much less trivial than I'm hijacking the phrase for but it seems to perfectly describe my limitations in understanding the current residential communications markets. No matter how hard I try I simply can't seem to understand what is going on - beyond the obvious consequences of a saturated market (at least for ADSL) and the dominant supplier (Telstra Retail) desperate to "win back" market share and with a frighteningly large 'marketing' budget to do that. So the head line phrase I used exactly describes my situation at the moment - I can dimly see various things but I can't make them out in enough detail to really understand what is truly going on. I appreciate that I am not the only person having difficulty grasping the details of the current situation - every time I talk with one of Exetel's suppliers I struggle to work out whether they have wonderful acting abilities or they cannot understand the current situations any better than I can. I base that view on the, seemingly, startlingly naive statements they make about their understanding of the current marketplaces and the actions of the various competitors within those marketplaces. Two press reports about Internode in the last few days exemplify what I mean: http://www.theaustralian.com.au/news/nation/governments-broadband-not-up-to-speed-at-tasmanian-school/story-e6frg6nf-1225961150410
Now, you may well read the statements by 'Internode spokespeople' differently to the way I do. However when a company says it is increasing connectivity by 400% it only means one thing to me - the bandwidth up to the time of upgrade was woefully inadequate. Similarly when a provider ascribes slow user speeds to "problems with Bass Strait back haul" it only means they don't have enough ( as the forced subsequent retraction of those statements clearly indicated). No problem - these things can happen for all sorts of reasons but, in both these cases, they can't blame this situation on 'up stream' providers as both suppliers (and we know this as we use both suppliers referenced) can upgrade these circuits in 48 hours. Again, these things can happen to any provider at any time (including Telstra) but Internode has always made a song and dance about its past provisioning policies that it appears very odd to have moved away from their stated "massively over provisioned, golden network" to a point where under provisioning appears apparent in at least two key services. The issue isn't that it happened and was addressed but that it happened at all. Only one reason springs to mind - less money is available these days at Internode to provision links as they did in the past.....most likely reason for that is.....form your own views....but it appears to have caused a significant change in company policy. That is just one example of my inability to understand what is happening around us and I only use it because of the third party references rather than quoting statements made by people I talk with. It's a strange time in my, longer than most, time in the communications industry I have never been so 'lost' as to what is likely to happen 'next'. This is not a good way to be when your principal activities over the coming days are to revise a business plan. PS: Not wishing to say "I told you so" but those of you that read these musings regularly might remember that I have been saying since June that for all Labor's tub thumping about how good the economy is - I said that I, and the business people I talk with, saw it very differently: http://www.smh.com.au/business/economy-moves-into-the-slow-lane-20101201-18gn7.html Copyright © Exetel Pty Ltd 2010
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something seems to have got messed up in the formatting of the first link, text is correct but the hyperlink is pointing to the Tasmanian story
Comment (1)
There is a follow up story at http://www.theaustralian.com.au/news/nation/early-customers-test-nbns-capacity-limits/story-e6frg6nf-1225961720917
Seems like Internode was caught out and only responded with the negative press. However reading the initial school story, I'd have to at least assume the reporters don't know what they are talking about. They haven't asked the right questions. How does the Bass Strait effect video connections WITHIN Tasmania - from North West to Hobart? Presumably that bandwidth is under provisioned too. As for the Bass Strait issue, I take it from your comments that there are spare circuits across Bass Strait. More interesting still would be the profile of traffic in Tasmania and the proportion of that which goes over Bass Strait. Or even more significantly, what proportion of the new high bandwidth activity anticipated by the NBN will be across Bass Strait? There may not be a lot of Tasmanians, but I imagine if enough were on NBN, the current capacity across the strait or even intra-state will be swamped. There may be an interesting similar question for all of Australia wanting bandwidth to overseas when they have NBN connections. Comments (3)
Simon provided a detailed post here for those who are interested in a response:
http://forums.whirlpool.net.au/forum-replies.cfm?t=1583568&p=2#r21 Comment (1)
It seems pretty clear that Internode deliberately under provisioned the Tasmanian service:
http://www.themercury.com.au/article/2010/12/01/190191_tasmania-news.html It seems pretty clear that Internode has not been providing a "golden network" and has changed its previous policies. The question is why? Comments (3)
Why? Probably because 100mbit is just as expensive as one would expect it to be (therefore high contention ratio?).
I guess they could have shifted because having money tied up in excess capacity may have allowed internode to drop the ball a bit when it comes to competition. With providers such as TPG or Exetel able to offer more for significantly less which is widening the price difference between internode and the rest. This is likely making internode less desirable. However, I've not looked up any stats so this is just BS and thoughts. Also they'll need to drop such policies to compete on a network when any man and his dog can be an ISP for the home user. Comment (1)
Why is it "clear" that Internode deliberately under provisioned?
There are any number of explanations, including in the customer's own networks and machines. I've seen two servers connected with a crossover cable struggle to use the full 100mbs of their interfaces - let alone traffic passing through a residential grade network before getting to the NBN. As far as we know he's trying to use wireless to the NBN connection. I've seen Windows machines with firewalls and anti-virus restrict the data rates to less than 100mbs, or lack of memory or swapping disks etc. The lack of analysis and the jump to the conclusion of "under provisioned" seem more convenient than justified. I'm sure you'll get these customers too. Comments (3)
"Why is it "clear" that Internode deliberately under provisioned?"
ummmm....because the moment that Internode ordered an upgrade to the Aurora circuit the customer speed problems went away? Because Internode tried to blame Aurora for its problems and then had to publish a public retraction of that accusation. Comments (3)
Ok, you must have read more reliable sources than I. I've seen nothing reliable that connects the upgraded circuit to the customer's speed problems being resolved. "Correlation does not imply causation."
Actually I've only read things contrary - that the customer's speed problems still existed after the upgrade. In other words there was not even correlation. With three groups probably tweaking things (Internode, NBN and the school's local IT), who knows who "fixed" it. Nobody is saying! Comments (3)
I'm only quoting the public record.
Yes, I do have more sources than anyone else who: 1) Does not directly talk to senior contacts at bandwidth suppliers on a regular/friendly basis. 2) Does not know the exact time frames in which those suppliers can upgrade customer circuits. Comments (3)
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