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  • Analysis, Telecommunications - Written by on Monday, June 4, 2012 11:48 - 41 Comments

    Tiny niche ISPs join the NBN market

    analysis When you think about competition on the National Broadband Network, you normally think about major telcos like Telstra, Optus and iiNet battling it out to win Australia’s broadband spend. But the truth is that a large number of very small ISPs have already joined the NBN market and are also competing.

    The depth of competition in the emerging NBN market can be witnessed by looking at a page on NBN Co’s site which the wholesaler has set up to provide information and links to the retail Internet service providers which sell services to customers over its network. Initially the page only contained a handful of ISPs. But over the past few months, as commercial services have launched on the NBN, several dozen more have been added.

    The interesting thing is that I’ve been covering Australia’s telecommunications market for the best part of a decade, and I’ve never heard of most of these companies.

    Take Aardvark Internet (whose name appears calculated to win it first place in any directory of ISPs). The company’s modest website states that it’s a mid-sized ISP which providers Internet and Internet telephony services to all Australians, having been established 18 years ago in 1994. It’s hard to know just what sort of NBN options Aardvark expects to provides to customers. Although it lists access to the NBN’s fibre footprint as an available product on its site, it doesn’t list any pricing plans, taking a similar approach to its ADSL broadband options and encouraging prospective customers to contact it directly instead. Later this year it also plans to offer access to wireless and satellite services on the NBN.

    Another company, Ace Internet Services, also has a long pedigree, being established back in 1995 to provider Internet to New South Wales’ Southern Highlands region. The company offers a complete suite of NBN pricing plans, ranging from 12Mbps plans for $45.95 per month with a meagre 10GB of data quota included, right up to a fairly competitive 100Mbps plan with 400GB of data included for a monthly cost of $102.95.

    There are a number of other very similar ISPs to these two — typically ISPs focusing on a specific region which have had their roots in providing dial-up and ADSL broadband throughout the 1990′s and 2000′s, and have built up a moderate customer base over that time. These ISPs appear to be making a pitch to continue their business operations under the NBN by continuing to focus on their region and providing better, highly Australian customer service to customers in those areas. Some examples include RedBack Communications, Fastel, North Queensland Telecom and more.

    There’s also another class of emerging niche providers: Those that appear to have focused on satellite and wireless broadband in the past to rural and regional areas, and are now extending their platforms to cover the NBN, as well as simultaneously signing up to offer fibre as well. Some examples of these companies might be SkyMesh, activ8me and NuSkope. Most of these also offer fairly competitive NBN plans in general.

    However, there are also just some really weird quasi-ISPs out there which have signed up to provide NBN fibre services. Take DeVoteD NBN, for example. The company appears to primarily be a DVD, movie and game retailer and renter, which has a website and also a retail premises in Mill Park, Victoria. The company’s website boasts: “DeVoteD DVD has been in operation since July 2000. We are the largest Online DVD, Movie and Game store in Australia.”

    The company has now set up a dedicated NBN area of its business. “Whilst new to the Retailing on NBN services,” the company’s website states (original capitalisation and punctuation) “We have built a loyal customer base both online and at our Rental in store at MILL PARK. With over 50,000 online customers and over 6,000 active customer at our MILL PARK Store. We pride ourselves in customer service and products we offer .” Despite its relative newness to the NBN market, however, DeVoteD NBN actually has some pretty decent broadband plans, with the company offering 100Mbps plans with 800GB of quota for $109.90, when a basic telephone package is included.

    The quality of the websites advertising these retail NBN services from small ISPs also varies wildly.

    DeVoteD NBN, for example, has what I would describe as a pretty atrocious website. It’s pretty functional and gets the job done, but it doesn’t look pretty. The same could be said of the ORCA Network, which boasts that it’s “an Australian owned and operated telecommunications company created with you, the customer, in mind”.

    But for sheer poor design, the website of a new company entitled ‘MyFibre’ really takes the cake. The company’s use of poor quality images, fonts in bright colours which aren’t anti-aliased and poor English comes across as amateurish at best. “You won’t have heard about us before now, but that doesn’t mean we are some dodgy fly-by-night company,” the website boasts. “We are passionate about all things internety & all things computery. And we don’t think that we have to be excessively formal to bring you a great service either!”

    Lastly, there are some companies which have been set up specifically from scratch to provide broadband services over the NBN. The best example of this is Australian Broadband Services (AusBBS), which hasn’t launched yet, but plans to this year. the company describes itself as a “NBN generation ISP” and claims to have access to lower cost business models and technology specifically designed for the high-bandwidth environment of the NBN, as opposed to existing ISPs, which need to deal with legacy broadband models such as ADSL.

    “AusBBS will differentiate itself in the marketplace with a simple low cost product range that offers subscribers flexibility and clear value in comparison to established ISPs and other Telcos,’ the company’s website states. The company’s CEO Rob Appel told Computerworld in April that the company had licensed its platform “in the cloud” and was “the first purely NBN virtual ISP”.

    Now, it’s certainly interesting checking out all the niche companies which have signed on to providing NBN services. But realistically, are these companies likely to provide any significant competition in the NBN marketplace, given the dominance of major companies such as Telstra, Optus, iiNet and TPG, which have pretty much carved up Australia’s broadband market between them at the moment? From a cursory glance, I’d consider it pretty unlikely.

    Each of these small ISPs has put their own spin on the market opportunities that the NBN providers. Some have focused on specific geographic areas. Some have focused on specific technologies, such as satellite broadband. Some have focused on being quite ‘anti-corporate’, or more Australian than the major players. And some have focused on marketing to existing customers in other areas, with their NBN services as a value-added option to their existing main product lines.

    But in each case, it seems clear that these ISPs are not going to have a significant impact on the level of competition in Australia’s broadband market.

    The first reason that I can say that is that in general, the NBN plans being offered by the various players are all pretty similar. Usually they top out at around 400GB of download quota, and offer 100Mbps plans for around the $100 mark, with a range of lesser plans underneath this.

    But, with the exception of Telstra, whose NBN plans are pretty overpriced compared with the rest of the current market, these plans aren’t that different from those offered by the major companies, and often they’re worse. iiNet and Optus already offer NBN plans around that level, and offer bundled services and value-add options which the minor ISPs don’t, such as access to the FetchTV IPTV service, mobile phone bundles, quota-free downloads and more. Much of the similarity no doubt comes from the fact that quite a few retail ISPs providing services over the NBN will actually do so through a third-party wholesaler such as Optus, and thus will have limited scope in terms of pricing innovation, due to reduced margins.

    When you combine this home truth with the obvious fact that these major telcos have a huge marketing muscle which they’re continuously flexing to generate blanket advertising, it’s hard to see how smaller ISPs will be able to compete, even in rural areas. Both iiNet and Optus have blanketed Australia with advertising over the past several years, and this trend looks set to continue. I’m originally from a small country town myself, and I can say that there’s no way regional players will be able to win many adherents in the face of these major brands.

    Of course, there is still the potential for highly financed new players to enter the market and conduct similar marketing campaigns. I’m thinking of the way which companies like TPG and Dodo have come from relative obscurity over the past decade to win large slices of Australia’s broadband market, purely by keeping their costs (and sometimes service levels) down while constantly advertising cheap broadband plans to gain scale.

    We could see this kind of activity in the NBN world from new players. I’m sure that major supermarket chains such as Woolworths and Coles will look into the opportunities offered by the NBN at some point, for example, as they have done in the financial services and mobile telecommunications markets previously, using their existing customer base to drive sign-ups. In addition, I’m sure we’ll also see one or two extra major players enter the NBN market. Vodafone, for example, has publicly cited its interest in the area, and of course TPG and Dodo will start providing NBN services as the network gains some scale.

    Overall though, and despite the fact that I don’t think these small ISPs have much chance of competing strongly in the NBN market, their participation in the whole process is fascinating. The variety of the business plans being pursued, the fact that many companies appear to see quite a lot of opportunity in the NBN infrastructure and the range of players means the whole scene is evolving in a fascinating way, and I’ll be interested to see how it develops in future.

    Would you sign up with a niche ISP for NBN services? Or would you only buy services from a major ISP? Post your thoughts in the comments below.

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    41 Comments

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    1. Posted 04/06/2012 at 11:50 am | Permalink |

      What’s that? More competition? Specialist products?

      Isn’t the NBN supposed to kill all that off?

      :o)

      • Posted 04/06/2012 at 11:52 am | Permalink |

        I personally don’t view much of this activity as true competition, but I guess it’s technically competition … on paper at least.

        • Posted 04/06/2012 at 11:56 am | Permalink |

          Any extra choice is extra competition, even if these guys only get 0.00001% of the market… :)

          • Posted 04/06/2012 at 12:08 pm | Permalink |

            Sorry, I don’t really agree. If competition is defined as keeping the major players accountable through decent rival offers, then most of these companies won’t be able to do that. Competition has to be meaningful to have an impact. There are plenty of Android tablets out there, for example, but nobody is buying them. In a realistic sense, the iPad has an almost monopoly-like grip on the tablet market. There is very little real competition.

            • Posted 04/06/2012 at 12:16 pm | Permalink |

              Partially agree. But ultimately, more choices is better.

              Nobody is holding a gun to people’s heads and making them buy iPads. iPads are just the best option, people are more than welcome to buy other choices.

              The big guys will always win in the ISP market, but that doesn’t mean the little guys aren’t valuable if they provide the best option for someone.

              :)

              • Posted 04/06/2012 at 12:19 pm | Permalink |

                Let’s take the example of the banking sector. Four major banks, which have bought up all the competition in recent years. The smaller players matter very little now. Can we say it’s competitive? Not really … most of the products which the various banks offer are exactly the same, and there has been very little innovation for years. I expect a similar situation under the NBN.

                Are Australians still going to get good services? Yes. But let’s not fool ourselves that there will be strong competition creating innovation. There won’t be, as there isn’t in the banking sector.

                • MarkD
                  Posted 04/06/2012 at 5:07 pm | Permalink |

                  Given that most of the reliability and technical hassles of a DSL/dialup network will disappear, a regional ISP that targets just one or two POIs can be up and running with a pipe from the NBN reseller, a pipe to the Internet and some software to manage it.

                  Frankly, I expect to see “ISP-in-box” products coming from the backhaul resellers who don’t want to do retail.

                  With less marketing costs, easy setup and the ability to add local value – such as home visits, training, PC upgrades, VOIP conversions, etc, a local ISP could get close to the same costs-per-customer as the big guys.

                  Let’s ask this question around the other way. In an NBN world, exactly what is the value-add of the big four? Performance? Support? Reliability? Features?

              • Douglas
                Posted 04/06/2012 at 4:56 pm | Permalink |

                “But ultimately, more choices is better.”
                Except for infrastructure providers, right?

                • Posted 04/06/2012 at 4:59 pm | Permalink |

                  No, ultimately I believe it’s best to have as many infrastructure providers as possible. That’s always been a criticism of mine about the NBN policy — that it moves away from infrastructure-based competition.

                  • Abel Adamski
                    Posted 05/06/2012 at 11:56 am | Permalink |

                    Renai, with due respect I have to question the basic assumptions. Firstly we must ascertain what are our goals, then what is acceptable not just for residential, but also for business needs (there is a lot of overlap here ). Do we value the opportunity to enable decentralisation or is the taxpayer forced to subsidise the rural and low profit areas to enable infrastructure competition, what are the potential benefits, will it mean the destruction of the Standardised Ubiquitous Business capable Platform , is that a good thing ? at this time the prices are not any different and the standards and upgradeability are unknowns.
                    From reading US wireless etc sites I have picked up Verizon and AT&T were primarily installing fibre, not just for superior service but to move their wireless customers volume downloads etc off the wireless network, their fibre services were basically vertically integrated with minimal if any wholesaling.Problem is footprint and coverage.
                    The other issue is that Cable TV has been a major aspect in the US for over 40 years and is close to ubiquitous, a natural fit with broadband even if inferior, the punters want their Cable TV which Verizon etc can’t provide. As a result infrastructure competition is withering in the US, instead counties and Cities are installing Fibre themselves and companies such as Google (they too are having issues, lets face it would you trust Google to provide your broadband, smart guys and sure to work out some way of obtaining all your information )

                    Paul Budde wrote an article in technology spectator covering some of this
                    to quote
                    “Also interesting to note is the retreat of Verizon and AT&T from infrastructure-based competition in the fixed broadband market in the USA – opting instead to concentrate on the mobile broadband market. Obviously this transition will take some time, but they have abandoned attempts to compete with the cable companies. Here we see that the cable companies will soon have the monopoly on broadband. If there is no room for infrastructure-based competition in the USA, what hope is there for a country like Australia?”

                    http://technologyspectator.com.au/nbn-buzz/hfcs-flawed-competition-promise

                    • Posted 05/06/2012 at 12:02 pm | Permalink |

                      Totally agree Abel.

                      The US are having major issues on their wireless networks, from lack of spectrum, coverage, speed and reliability. Meanwhile, individual companies are doing fibre, often to the home. It was already up to 13% of all premises in 2010, I’m sure it’s considerably higher now.

                      AT&T and Verizon have obviously decided on a non-agression pact on competition and to go after wireless. Why? It’s cheaper to provide more service to more people….but it’s not better service.

                      Fixed line will NEVER disappear and will ALWAYS do the heavy lifting. It is a shame that out politicians can’t seem to see that.

                  • Marc
                    Posted 05/06/2012 at 4:31 pm | Permalink |

                    “No, ultimately I believe it’s best to have as many infrastructure providers as possible. That’s always been a criticism of mine about the NBN policy — that it moves away from infrastructure-based competition.”

                    Are you trolling us?

                    The Optus and Telstra HFC rollout experience shows that infrastructure competition DOES NOT WORK. Is really that hard to comprehend?

                    Society gains NO benefit from duplicated infrastructure as it just costs it more money. If company A spends $1b to build a network and company B comes along and builds the same one, then there is $2b companies are chasing from consumers instead of $1b if only a single network was built. That other billion dollars could be better spent elsewhere.

                    • Douglas
                      Posted 05/06/2012 at 5:12 pm | Permalink |

                      Rubbish.

                      Look at how much DSL prices came down over the last 10 years. This was the result of ISPs like iinet, internode, TPG etc rolling out their own DSLAMs and selling cheaper than Telstra were wholesaling it.

                      More recently as people like Vocus and Pipe started selling International bandwidth to compete with the entrenched players, prices of IP transit have dropped through the floor, and these savings have been passed on to consumers.

                      All of this is infrastructure competition.

                      • Posted 05/06/2012 at 6:04 pm | Permalink |

                        True Douglas. But we have not had much since,because that was not true infrastructure competition. They were renting Telstra’s copper lines and, in some cases, backhaul and hardware too.

                        True infrastructure competition has never been in existence in Australia. We are too small a population in too large a country to gain decent returns on duplicated or competing infrastructure.

                        I do agree with Renai though, TRUE infrastructure competition is one of the best ways to lower price and drive innovation….but it’s sadly never been the case here. Hence the NBN

              • alain
                Posted 04/06/2012 at 5:52 pm | Permalink |

                But don’t forget less choice by the absorption into one company of what once were major independent players on the ISP scene, Internode, AAPT , Netspace, Westnet and TransACT.

                I am sure we have not seen the last of that process.

            • Karl
              Posted 05/06/2012 at 4:13 am | Permalink |

              And yet you say Optus HFC will be able to keep the NBN accountable.

      • Posted 04/06/2012 at 10:50 pm | Permalink |

        Well NuSkope would never survive as a NBN only ISP.
        Margin of $1.50 per customer (that then needs to cover, wages, office, email, servers ect)

        compared to wireless… margin of 90%.

        We offer the service because, its the right thing to do, and we have a few people on it, but i still struggle to see how any small ISP will ever survive in a NBN only world.

    2. Posted 04/06/2012 at 12:12 pm | Permalink |

      In fairness to myfibre, if you save the frontpage, its only 800kb.
      if a big chunk of their likely visitors are on satellite and dialup, it’s a fairly clever design, sacrificing pretty in favour of “less dull”.

      • Posted 04/06/2012 at 12:13 pm | Permalink |

        … you can create small file size home pages in antialiased fonts; it’s not that big a deal ;)

        • Hubert Cumberdale
          Posted 04/06/2012 at 2:55 pm | Permalink |

          That website has to be a joke. That’s one explanation for it. At the bottom of the page it links to http://www.rivertel.com.au which doesn’t look any better, it links to http://www.australis.net and it looks the worst of all.

          Verdict: joke, scam or spam… maybe it’s part of the coalitions campaign to “prove” why the NBN = bad. Wouldn’t surprise me.

          • Hubert Cumberdale
            Posted 04/06/2012 at 3:00 pm | Permalink |

            LOL

            Australis Support = 1300 722050
            Rivertel Pty Ltd – Support = 1300722050

            Rivertel Pty Ltd – Sales & Admin = 1800288871
            Australis Sales / Billing = 1800 288871

            • Col
              Posted 05/06/2012 at 11:24 am | Permalink |

              A follow up on webpage criticisms. I bought a house in an ADSL wasteland. Didn’t intend to, but after being dicked around by the ‘big’ guys, found AustralisIT.net in the local Yellow pages. I have a ‘Fixed mobile’ account with them, piggybacked on Optus towers. It was listed as a company in Byron Bay. Was bought by a husband and wife team from Armidale, and Rivertel is aimed at the Armidale NBN market. I only access the webpage to check my Quota.
              I could have switched to another company, but any time I have a problem with the account, I can always talk to her with one call, and for technical, can always talk to him with one call. Probs are fixed within hours. Why would I switch to the big guys, when I am on a first name basis with these people. Few dollars of savings? Nice website not put together on a home computer? No. It is the SERVICE given. That is the advantage of the little guys. No queues on calls, direct feedback, and personal service. Just like Credit Unions in finance. No fees on my account, and GREAT service. Sometimes small is better.

              • Posted 05/06/2012 at 11:36 am | Permalink |

                +1 Col. These little guys might not challenge any real market share, but there will be many tens of thousands of Australians much happier with their internet because of their existence.

        • tom
          Posted 04/06/2012 at 4:30 pm | Permalink |

          You would do better converting it to CSS+sprites. That site looks like they were advertising NBN services back in 1995, from a geocities website.

      • Goku Missile Crisis
        Posted 04/06/2012 at 2:46 pm | Permalink |

        Most geocities websites used to be pretty small too..

      • Hubert Cumberdale
        Posted 04/06/2012 at 3:07 pm | Permalink |

        “it’s a fairly clever design”

        If someone went out of their way to create a website this bad that would be true. Sheer laziness is another option.

        • tom
          Posted 04/06/2012 at 4:35 pm | Permalink |

          What’s really surprising, is that the website was done with Joomla. I was expecting to see some “FrontPage” or “MSWORD” identifiers in the page source.

          But it’s definitely not the worst I’ve seen. http://www.eurofest.org.au/ is implemented with VML, and a token static image provided for non-IE browsers :|

    3. Anon
      Posted 04/06/2012 at 2:46 pm | Permalink |

      I remember reading comments from Simon Hackett last year sometime regarding how many point of presence is required by an ISP to physically be able to conduct business on the NBN.

      From memory, the gist of the whole thing was even a small ISP only targeting a local geographic area of customers would need to physically have hardware installed all over the country.

      In the case of the small ISPs mentioned in this article, they wouldnt have done that and would surely just be acting as a third tier ISP, renting network access off a second tier ISP.

      If that’s the case it’s no different to all to the small ISPs that you can get ADSL through now, but whose services are all third tier and are wholly reliant on other companies for their network quality.

      I’m with Exetel and while I have not had any problems with my adsl, I know full well if the physical telephone cable connection to my house developed a bad connection I would report it to Exetel and they would then have to report it to Telstra and wait for them to fix it.

      Because I’m connected to a RIM, going with some more reputable/premium ISPs is not an option because their pricing for ADSL delivered over Telstra lines is much more expensive than Exetel.

      So even though the pricing is fantastic, I dread the thought of trying to get any physical phone cable problems fixed because then my ISP is just a middle man.

      Now, back to small ISPs ‘competing’ on the NBN platform, I agree with Renai that they won’t make any impact on the pricing etc of the big players, thus not really affecting competition.

      Renai’s analogy of the big four banks is spot on. Think of credit unions as the small ISPs. Did the big four banks see a credit union drop their interest rates after the RBA reduced the official cash rate and follow suit? Of course not. They only dropped once another of the banks did, and NONE of them passed on the full cut, either.

      But, that doesn’t mean the credit unions don’t have a purpose. Sometimes they are very competitive from a consumer’s point of view. I have a new car loan through a credit union because the interest rate was better than I could get through the banks. So they got my business.

      Same reason I’m with Exetel over Telstra, Internode, etc.

      Not because I see them as being better, but the price is right. And thus far service quality has been fine.

      So the small ISPs offering services over the NBN may not cause any ripples, but to some customers they may be offering the right service, for the right price, and be appealing.

      If they’re still around in a decade then I guess they found their feet.

      • Mathew
        Posted 04/06/2012 at 8:46 pm | Permalink |

        > I remember reading comments from Simon Hackett last year sometime regarding how many point of presence is required by an ISP to physically be able to conduct business on the NBN.
        >
        > From memory, the gist of the whole thing was even a small ISP only targeting a local geographic area of customers would need to physically have hardware installed all over the country.

        Were you referring to the NBN Points of Interconnect and the future of competition blog post by Simon Hackett?

        Simon states that the initial national overhead for CVC is $480,000 per month + GST. Now NBNCo are currently providing RSPs with 150Mbps of free so it will be interesting to see if that causes a shake out.

        One of the things that wireless / satellite operators realised recently to their displeasure is that to connect to a satellite customer you need to connect to the POI that services the region they are located in. For RSPs who had planned to focus on the satellite market this has the potential to add considerably to their costs.

    4. Frank
      Posted 04/06/2012 at 5:37 pm | Permalink |

      I think the most interesting point on the NBN site is the absence of Telstra in the wholesale services section. Does this mean Telstra is getting out of the wholesale market post NBN?

    5. Posted 04/06/2012 at 7:51 pm | Permalink |

      YAY! Ace Internet! I’m friends with the manager and they’re right down the street from me :D

      In regards to someone’s comment about how many POI’s and what hardware these ISP’s have to have, it was my understanding they could access just 1 of the POI’s to provide their services, but they would indeed have to rent backhaul and International interconnect to provide that POI. Don’t think they need hardware everywhere though. It’s done mostly by software, I think, in switches. Someone feel free to correct me though.

      I think you’re right in general Renai. It is unfortunate we’ve been forced into the situation of government intervention in telco infrastructure, meaning little infrastructure competition. But I think you’d agree it wasn’t and isn’t working in the current market, particularly outside the cities, but also inside too.

      IMO, the NBN is an answer to a diseased Telco industry, mainly the growth that is Telstra wholesale, but also an answer to a unique geographical challenge we in Australia face, when many other countries don’t. There is a good reason that other countries don’t have FTTH as a standard- because their Telco industries are much more competitive AND they have geographic premises locations within very small areas, in general. If Telstra had been separated operationally in 1996, we may have had a much different industry today and the NBN may not have been necessary, or possibly a confined rollout to just underdeveloped regional and rural areas. But seeing as many in mid-level suburbs are getting similar services to those out in the sticks, the NBN is, currently, the only way forward.

      Actually, I was reading about a novel idea of “Fi-Wi”, where high power LTE stations were put atop FTTN nodes to provide longer distance for higher throughput than the copper normally used:

      http://boundlesscomms.com/fibre-wireless-confirmed-rural-broadband-solution-for-lancashire.html

      They seem to be doing quite well and I know it isn’t just them, but it would certainly be worthwhile pursuing for, say, the last 10%? 15%? There’s still the contention to deal with and weather, but with engineering know how and ACTUAL debate, I think it could be worked and end up giving the last 15% considerably better than they get now, but cheaper than rolling fibre out all the way or using satellite/fixed mass wireless. Although, eventually, I think fibre would go all the way anyway. But to me, it seems a better end product now than normal FTTN, but still with the drawback of nodes.

      • GongGav
        Posted 05/06/2012 at 9:29 am | Permalink |

        In regards your fi-wi, I was reading something along similar lines not that long ago. Appologies in advance for the vagueness of the following…

        Was something they were doing in Vancouver from memory, dubbed V-power lines or something like that. Idea was that with all the techo stuff coming into play these days, they combined everything into a single power pole to pretty things up. Wifi broadcasters, mobile phone towers, even electricity inductors for future car use.

        Or something like that.

        Cant find it after a quick search but I know I read it somewhere a week or two ago. Sounded interesting, and the idea isnt that far removed from what you link here. Wouldnt take all that much to make them fibre nodes as well.

        • GongGav
          Posted 05/06/2012 at 1:49 pm | Permalink |

          Found it – http://www.vancourier.com/Novelist+pushes+utility+pole+wireless+waves+Vancouver/6638322/story.html

          Or easier, http://v-pole.com

          Has the same story with a little more, and a few piccies. Not the prettiest looking thing, but nothing a splash of paint wouldnt fix. Concept is to combine various mildly intrusive technologies into 1 product. Worthy of itself, wouldnt be hard to adapt the idea to our needs.

          Doesnt sound like Vancouver is looking specifically at this product, but there are hints there they are considering similar. Be interesting to see one of these niche ISP’s tack on to this idea, and put it to councils as something to consider when attempting to upgrade their technology footprint.

      • Douglas
        Posted 05/06/2012 at 1:50 pm | Permalink |

        Hi seven_tech,
        You need to interconnect to each of the 120 POIs that you want to provide end user services to.
        Now – this doesn’t mean you have to have 120 sets of POP equipment around the country (although you could if you wanted to).
        Most people will have one set of hardware at Globalswitch in Sydney (for example).
        If they want to provision end user services nationally they will then have two options:
        1) Buy NBN services wholesale from an aggregator (like Optus or Telstra Wholesale)
        OR
        2)Buy backhaul from someone like nextgen (for example) to everyone of the NBNs 120 POIs. The ISP then also needs to purchase 120 sets of CVC from NBN. Gets expensive real quick without scale.

        Most ISPs will do a blend of the two options above. ie – they might interconnect directly with NBN in the Sydney POIs (if Sydney is their main customer base), and then use an aggregator to service the rest of the country.
        In terms of the hardware – it’s a lot more than just a switch :)
        The high packets per second rates on thousands of 100Meg NBN services really requires a hardware based forwarding platform. Something like a Cisco ASR9K is what a lot of NBN ISPs are using. The silicon on those things is not cheap!

        Regards,
        Douglas.

        • Posted 05/06/2012 at 2:04 pm | Permalink |

          Hi Douglas,

          Thanks for the reply. I had figured about the backhaul. And, as you say, I would assume these guys would hire it from Telstra or nextGen.

          In terms of hardware…..you’ll have to forgive me. I work with Cisco 3400 Series….that’s my version of big hardware!! lol :D

          I see your point. I think there’s still the possibility of regional area competition though, with these small ISP’s possibly ganging up in a single large hub to provide better services overall to locals.

          Time will tell I guess.

          • GongGav
            Posted 05/06/2012 at 2:10 pm | Permalink |

            Like credit unions used to do to compete with the big banks? Individually they serviced small groups, but collectively represented a national conglomeration.

            Be interesting to see community ISP’s band together in a similar way, and there’s no reason they couldnt.

            • Posted 05/06/2012 at 2:13 pm | Permalink |

              Definitely GonGav. My Credit Union is brilliant because it’s teamed up with several smaller ones and leverages better rates off the big guys as well as access to services like deposits at bank branches (it only has 3 itself) and ATM withdrawal fee waivers (I’ve NEVER paid an ATM fee)

              Bring on the Mouse that Roared! :)

    6. Drew
      Posted 04/06/2012 at 11:19 pm | Permalink |

      Seems to me the homogeneous price argument can cut both ways. If you’re paying more or less the same price for more or less the same service, then which RSP are you going to prefer? If you live in a regional country town, are you going to choose the big corporation run by wankers from the Big Smoke, or are you going to go with John and Bob who live around the corner?

      • alain
        Posted 05/06/2012 at 9:17 am | Permalink |

        I think you will find BigPond wins every time in the answer to your question.

        • Posted 05/06/2012 at 9:47 am | Permalink |

          Possibly alain, but possibly not. I know for a fact Ace Internet has done well with local business poaching ISP services and with the NBN coming to a small part of our region in the next year and obviously, pending elections/changes, coming to the rest of the region at some point. If they can produce attractive cheap end plans, with Telstra’s plans being amongst the most expensive for the NBN and the sentiment for Telstra down here is already pretty poor. That would see people flocking to Ace Internet.

          • GongGav
            Posted 05/06/2012 at 10:41 am | Permalink |

            The big providers are going to always have an advantage. They can undercut prices based on sheer volume, and that alone will be enough for plenty. The flipside is the loyalty aspect, like your situation 7T, where you’re willing to pay that little more because they have served you well over time.

            But by their own admission (witness NuSkope’s comment above), these small ISP’s arent offering these services as competition, they are simply offering them as an alternative for existing customers. Its not their bread and butter, its their cream.

            The big providers are the opposite – these connections are their bread and butter while the satellite services offered by these niche ISP’s are the cream for Bigpond and friends.

            End of the day, a portion of people will stick with these niche ISP’s, and it wont make a lick of difference. Which is a good thing. Bigpond doesnt really need to care about any satellite connections they get, just like Ace wont really need to care about any fibre connections they might get – its extra business, but not what makes th respective company their main money.




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