NBN Co to spend A$18.4 million on interim satellite upgrades, will expand service 

25 March 2014

Communications minister Malcolm Turnbull has revealed that NBN Co will spend A$18.4 million on capacity upgrades from IPStar and Optus for current users of its problematic interim satellite service, as well as bringing in a new fair use policy. And he has also confirmed work is currently way on a separate arrangement to expand the population coverage of the service.

The revelation follows weeks of speculation around the short-term future of the ISS, which was set up in 2010 at a cost of A$350 million. With Optus and IPStar as providers, it was designed to provide stopgap broadband services in the most remote areas until the launch of NBN Co’s own two specially commissioned satellites next year. But it ran into serious problems; the service hit design capacity much earlier than anticipated, and users and retail service providers complained of poor peak-time performance as a result of contention.

While the government has been guarded until now on any specific plans to improve the interim service, Turnbull has frequently railed against the previous government’s handling of the issue – and yesterday’s Question Time in the House of Representatives, when he made the announcement, was no exception. “The Labor party promised 250,000 Australians that they would be eligible for the interim satellite service, but only bought capacity to service 48,000. They promised the service would deliver 6Mbps down and 1Mbps up for the same price as a city ADSL service... [but for example,] most of the 5,600 interim satellite users in Western Australia now are getting no better, and often worse than, dialup speeds,” declared the minister. “Kids can’t do their homework, farmers can’t access the online national livestock identification system, real-time prices or weather services. The A$351 million ISS of Labor has been a train wreck; the 45,000 unhappy current customers are costing
the taxpayers of this nation A$7,300 each in direct subsidy; that is nearly three times the level of the old Howard-era Australian Broadband Guarantee subsidy and for a much worse service.”

“It is our job to clean up Labor’s messes, including the Conrovian ones – but I have to say that many, including this one, do not lend themselves to an easy or obvious solution. Indeed, the previous minister washed his hands of this in the last few months of his ministry!” Nevertheless, Turnbull announced two separate fixes for the service, with a third on the way. “At the cost of A$18.4 million, NBN Co will upgrade the current capacity to all users on the satellite service by a third,” he said. “Second, we will institute a new stringent fair-use policy to ensure a minority of very heavy users cannot crowd out the majority.”

An NBN Co spokesperson told CommsDay that the firm had been conducting a technology trial over a couple of months before the new deal was announced, mainly around dimensioning to ensure endusers could enjoy better speeds. “At the minute, it’s currently dimensioned for 30kbps per user in peak [times] – so with today’s announcement, we’re adding another 10kpbs for endusers at peaks. So then it’s 40kbps at peak,” explained the spokesperson. “This aims to relieve congestion for endusers, because our overall aim is to deliver a better experience... and strengthens the fair use policy.” “And we’re working together with service providers and ISPs to make sure the endusers get a better experience.”

The NBN Co spokesperson added that the additional bandwidth would be supplied, again, by both Optus and IPStar; while the network builder is not disclosing the split, Optus and IPStar’s initial contracts were worth some A$200 million and A$100 million respectively.
ADDITIONAL SERVICES: Turnbull, meanwhile, also tipped a forthcoming announcement – separate to the A$18.4 million capacity boost – around expansion of the service.“We are... working on additional measures to provide new services, so that at least some of those [people], about 9,000 in total, who have not been able to get on will be able to do so,” he said. “And we’ll have more to say about those in coming days when the arrangements are complete.”As Turnbull implied, details around the service extension are expected very shortly. However, that will present its own challenges; any extensions will need to take into account eventual migration of users to the longer-term solution, but any alterations to that program won’t be finalised until the government’s strategic review of wireless and satellite services is completed – expected to be around the end of April.

Indeed, there is even a question mark over the way the long-term satellites will work commercially. A recent submission by NewSat to the Vertigan review revealed that the firm had made a pitch to buy NBN Co satellites and lease them back, while an Sydney Morning Herald article citing a ‘laundry list’ of options being considered by NBN Co CEO Bill Morrow suggested that such an arrangement might indeed be under consideration (albeit without naming any specific potential buyers). For the moment, though, NBN Co is keeping its cards close to its chest. “The fixed wireless and satellite review is still underway,” said the spokesperson.

 

So will there be further upgrades to the ISS, either in terms of capacity or population coverage, or are these the only changes before the launch of the permanent satellites? “Today’s announcement is about the capacity on the ISS... and we look forward to delivering the long-term solution in 2015,” said the NBN Co spokesperson.

 

ACCAN RESPONDS: Australian Communications Consumer Action Network CEO Theresa
Corbin welcomed the announcement. “It’s very good news for the users of the ISS, who have been complaining for some time about capacity issues,” she told CommsDay. “ “And we’re pleased to hear that [NBN Co] is still working on connecting 9,000 new customers who still don’t have any access.”
Petroc Wilton - CommsDay