Why is this change needed?
We’re stuck between a rock and a hard place.
The rock is the costs of delivering a great network such as the CVC charge from NBN, the backhaul including those cables across Bass Strait are all costs we need to pay that don’t vary. The hard place is that consumers are using more and more streaming services which requires us to expand the network to cope, but often no one wants to pay more for that privilege.
Additionally, the internet is the most complained about industry in Australia. People hate that they don’t get a great product (with other carriers), but often don’t recognise that the crappy networks are a product of carriers congesting their networks to keep prices low. So in short, we need to find a fairer way to pay.
We’re committed to delivering a ‘NO CONGESTION’ network, and to do this we need to ensure we expand ahead of needs – that means buying more bandwidth than we need on average (so we can handle the peaks). This has to happen across the network and to upgrading our hardware too. If you thought of our network like a series of highways, we need to ensure we have enough lanes, even at peak time, so that those with cars with great top speeds can actually use that speed without getting caught in a jam.
Whilst the usage of internet has been traditionally measured by amount of download, it’s actually streaming services that ‘hog’ the most network and they usually come at peak times. This ‘Netflix effect’ is causing congestion problems for all carriers but no one is creating a sustainable solution.
Now this isn’t an exclusive problem to us, but instead of fixing it, other carriers are letting their networks get congested which makes for a crappy experience – that’s why NBN is the most complained about service in Australia through the ombudsman (even though it’s often not their fault).
Here’s a video that explains congestion (it’s a great watch):
What is Netload?
Since the beginning of the internet, ISPs have always needed to provision more bandwidth in their networks to ensure that there is enough capacity to satisfy the demand from their users. Here’s a typical usage graph for our bandwidth each day based on each hour. But now, most carriers go from good most of the time down to crappy at peak times. We want to have a perfect network that at worse drops you back to good.
We have to provision enough bandwidth for those peaks. If we don’t, then we see congestion and the resultant “network crash”, where all the connections slow right down during those peak periods.
Connections have previously been priced using Download or Speed (or a bit of both), but there are problems with those models…
When people are downloading files or doing general web surfing this is a start stop action where the network can be easily shared without really noticing. It’s the driving equivalent of being able to weave between lanes of traffic. So even though people may be using lots of download, it could be in off peak times (when there’s plenty of bandwidth available), or even in peak times the user experience isn’t impacted as much by a slower file download than if you’re watching Netflix and it buffers. So it isn’t really fair to charge people top dollar for big downloads when many of them do it when there’s plenty of network available. Plus when people go over their amount of downloads, they then end up shaped to speeds too useless to use.
Another method which has been used in the past is to price on connection speed. You make the assumption that people who ask for a higher connection speed will use more bandwidth and you charge more for those higher speeds. NBN do charge a little more for speed differences anyway so why not just add to that? The key advantage to this is that there are no download limits to bother with – its a simple product to sell. The biggest issue with this method is clients feel they’re paying for a particular speed and if they don’t get it (during peak times for example), they rightly feel they’ve been cheated. Also, speed and download don’t actually correlate. There are plenty of users who don’t use very fast speeds, but actually consume a lot of bandwidth.
An alternate model – netload
Given the failure of the above models to fairly distribute the costs of running a network, we looked at other models and found burstable billing. This captures the load that streaming was putting on our network, by giving an average peak load measure. This would allow us to more accurately measure the load clients where putting on the network. We have adapted it to work in the daily environment and created a measure called netload.
How is it measured?
This is about getting a fairer system for charging that’s flexible for you to design the type of connection you most value.
1. We take bandwidth samples every minute throughout the day, which might look like this:
2. We then take all those samples and reorder them according to value, so that we have this:
3. We then take a point 120 samples from the left – 2 hours worth and see what that sample reads – that is the netload value. As you can see the biggest 2 hours worth of samples – the peaking activity – are ignored, but anything that creates a constant load over significant time, like streaming, shows up in a higher netload value.
The benefits of this model
- Moving from what is now a low congestion network to a No congestion network.
- You get to choose the power of your own connection.
- Everyone starts the day on a no congestion network and will only move to some congestion if they exceed their chosen netload.
- 50GB Daily Data limit removed.
- The faster speeds become cheaper for lower netload users.
- It’s a fairer system that means that light users are not subsidising the heavier users (currently 6% of our customers use 40% of our network and pay the same price)
- The system is scalable so the network can continue to grow ahead of your needs so we can stay an honestly uncongested network.
- No bill shock as you can set your daily connection price, with an optional buffer limit if you go over your daily netload allowance.
You can still:
- Connect in as little as 20 minutes
- Disconnect if you like.
- Change speeds as you like.
- Do a 7 day free trial which is a great way to see your netload usage.
How will it be charged?
Step 1. Choose your connection speed (the prices have either stayed the same or lowered considerably on old pricing).
Step 2. Choose your pre-determined Netload. Each connection includes 1 netload per day, but you can add more if you like at 80c per netload. You can also see your average netload in the user portal so you can manage your costs and usage. This pre-determined amount will ensure you are on a ‘no congestion’ network until your netload (average peak speed across the day) hits the limit.
At this point you will either fall back to a ‘some congestion’ network, or you can set a buffer as below…
Step 3. Set a buffer for extra netload should you exceed your daily precommitted allowance. The extra buffer netloads are charged at $1.10 per netload.
What will happen if I run out of netload?
During peak times, if you have hit your netload limit, then you’ll shift from being on the ‘No congestion’ network to a some congestion network.
Can I add more netload?
Absolutely. If you pre-commit each Netload allowance is 80c per netload (can set in 40c increements). If you’ve set a higher ‘buffer’ for when you go over, these netloads are charged at $1.10.
Do I have to use the buffer?
No. You can set your daily fee at $3.80 (this would be a 100/40 with 2 netload) and set your maximum daily also at $3.80 which means you’ll be shaped to 2Mbps at 2 netload. Or you could go a 50/20 connection at $2.50 plus 2 extra netload (total 3 netload) as a total maximum cost of $4.10 per day.
Do I have to use the pre-commit?
No. Every connection includes a netload of 1, however you can decide not to purchase any more ahead of time and set your buffer limit instead. Then the system purely charges you on usage, with a pre-set limit. It is more expensive to do it this way, but could work out cheaper if you have a highly varied daily netload.
How do I know how much netload I usually use?
Your last 28 days of netload usage will be shown on the user portal, so you’ll always be aware. We will also be showing you minute by minute daily usage so that you can see what activities use the most netload.
What do the price changes look like?
Here are some examples of pricing with different netloads. You can pre-commit and set your buffer in 0.5 increments.
|NBN Speed||Old Price||Base With 1 netload||With 2.5 netload||With 4 netload|
When will this be rolled out?
All new customers will go on to new netload pricing at the end of this week. Existing customers can stay on the old pricing until April 1. We’ll be offering some sweeteners to move earlier.
Want to know more?
You can ask questions in our Launtel Users Group. If you’re not yet part of the Facebook group, request access here.
Thanks again for being part of this journey. Our dedication always remains to delivering Australia’s best nbn connections.