The nbn for SMEs: not business grade yet
Many businesses are stuck with consumer-grade nbn connections.
Small businesses, particularly home-based micro-businesses, often use standard, high-end, consumer-grade internet plans for their online connection to support the traffic demands of multiple people sharing the link, or a data-intensive business service. Many other businesses, however, look for higher levels of service and have different traffic demands to residential customers.
In light of the increasing volume of consumer complaints of poor performance, congestion and higher prices for little or no performance improvement than the previous network infrastructure, it is timely to look at whether an nbn connection can be ‘business grade’.
While SME business premises might require similar speeds to consumers, many are prepared to pay higher-than-consumer prices for better service levels — backed by explicit service level agreements (SLAs), such as 24x7 problem reporting and solutions, priority repairs in 4 or 6 hours, and traffic performance throughput guarantees.
While the nbn does have some options like this, these options are not being used. Most who have plans described as a ‘Business Plan’ have found their traffic is still treated as general consumer internet traffic and experience the same level of congestion, despite the higher prices of such plans.
Businesses place a high value on reliability and fast repairs when something breaks — faster than the standard ‘repaired by the end of the next business day’ — as one-and-a-half days of disconnection would cause a costly drop in productivity.
nbn does offer optional faster response and repair times designed for businesses, but few service providers make them available. For a meaningfully faster repair time SLA — which might get a broken connection running again by the next morning, eg, 6 hours repair, including outside business hours — the extra charges to the service provider could double the monthly cost.
A common alternative way of providing reliability, if a non-nbn option is available, is to have a second link from a different network that bypasses the nbn (using different technologies that won’t break at the same time).
Another way is to select a service that includes a backup link, such as the recently announced Vodafone, Telstra and Optus offerings of nbn services with built-in backup over the 4G (and soon 5G) cellular networks.
Much has been written about poor performance and ‘CVC congestion’, with nbn co accusing internet providers of not buying sufficient CVC capacity (which is pooled across all customers), while service providers accuse nbn co of excessive pricing of CVC bandwidth.
This network congestion and poor performance can cripple a business’s operations — as well as provide questionable value for money for the service — and is a very real problem for businesses that have no choice but to use an nbn connection.
Rarely mentioned is that the congestion is primarily in Traffic Class 4 (TC-4) data, which is the lowest priority, ‘best-efforts, no guarantees’ traffic classification given to consumer-grade internet services. The nbn has two higher Traffic Class options — TC-2 for higher-priority, business-grade and video traffic, and TC-1 for even higher priority VoIP telephone data.
nbn provides options that classify a customer’s data as TC-2 rather than TC-4, and which should cut through any TC-4 congestion without any disturbance. However, the TC-2 options are extremely high-cost and low-capacity, and are not being used.
Again, the problem is that the TC-2 option has not been supported by the service providers, who have been focused on residential services. Most of the major wholesale aggregators don’t support TC-2 traffic at all, so none of the service providers that access the nbn through an aggregator can provide business-grade traffic performance and SLAs against congestion. Only recently (June 2017) did Optus Wholesale announce business products that use TC-2 traffic classes to overcome congestion problems.
Also, TC-2 options are severely limited by the nbn. Even on a fibre connection, a 50/20 plan is only permitted a maximum of 10 Mbps (symmetric) of TC-2 data, while 20 Mbps of TC-2 data requires a much larger 100/40 connection, severely limiting any ability to buy better performance. nbn co has released future roadmap plans to make higher capacity business-grade plans available, but not until the end of 2017.
In business parks and business-oriented suburbs and corridors in major cities, the high density of corporate offices, factories and warehouses means there are often alternative networks to the nbn that SMEs are using.
In this scenario, users bypass the nbn completely and access services that provide significantly better performance, consistency of throughput and value, with higher levels of business-grade response and repair service levels, and without having to wait until the nbn is rolled out.
For those located outside these precincts, the nbn may be beneficial in providing higher speeds and, in particular, much better upstream speeds than previous ADSL-based technologies services could do.
But while the nbn does have business-grade enhanced options at a wholesale level, very few internet providers are using them to better-than-consumer-grade experience, and these nbn retailers are unable to guarantee business-grade performance. There is still a large gap to be filled.
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