Tony Abbott may have once famously laughed off the nascent National Broadband Network as a “video entertainment system”, but years later Dodo is paying a $360,000 fine because some of its NBN services were incapable of being just that.
The budget retail service provider (RSP) agreed to pay the fine after the Australian Competition & Consumer Commission (ACCC) pursued it over broadband plans marketed as being “perfect for streaming”.
Some of the plans – which were marketed from November 2015 to March 2018 – were entry-level NBN services running at downstream speeds of just 12Mbps, with monthly quotas of as low as 10GB.
With a typical Netflix movie comprising around 3GB of data, ACCC chair Rod Sims said the ACCC was concerned the monthly quota would be accounted for after watching just two or three movies.
Bandwidth available for streaming video would also be compromised if, as in many households, more than one person was using the Internet at the same time.
“We don’t believe NBN plans with just 10GB of included data are ‘perfect for streaming’,” Sims said in announcing that Dodo Services Pty Ltd had agreed to reimburse around 16,000 customers that signed up for the services.
“It is simply unacceptable for an internet service provider to tell consumers that their services are ‘perfect’ for a particular use, and to the charge them extra when they use the service as advertised,” Sims stated.
Sweet stream or a beautiful nightmare
The announcement comes in the midst of a renewed debate about the expectations Australians should have from the $51b NBN, which is rapidly nearing completion next year.
Video traffic’s increasing burden on Internet infrastructure has long been understood, with the Cisco Visual Networking Index (VNI) noting that video comprised 75 percent of all IP traffic in 2017 and would grow fourfold by 2022, to 82 percent of IP traffic.
The explosion of Internet-connected TVs isn’t helping things: by 2022, the VNI predicts, fully 27 percent of fixed consumer Internet video traffic will be due to TVs connecting to Internet video.
With increasing reach and adoption, the burden of video traffic on the NBN is putting new pressures on a project that one senior technologist recently argued “has failed”.
Industry body ACMA’s new quarterly report on telecommunication complaints handling noted that low-speed voice-only NBN services had received 146 percent more complaints – 490 per 10,000 services in operation, compared with 199 – than broadband services.
Although there’s no indication as to how many of those complaints relate to service quality, NBN Co recently kicked off a furore when it was suggested that it was considering compromising long-held ideals around net neutrality by hiving off streaming video traffic into a product that RSPs could sell separately.
The proposal – reportedly delivered to the company’s 50 largest RSPs for comment – was quickly labelled a ‘Netflix tax’ in media coverage even though the company denied that it was a tax of any kind.
What’s in a stream?
Buffering due to poor streaming-video performance is such a sensitive problem with consumers that RSP iiNet has built an entire advertising campaign around it.
Even as NBN Co explores ways to balance its network’s capabilities against consumers’ exploding demands from streaming video, the ACCC’s statement highlights a semantic point that may be crucial in shaping bandwidth demand in the future.
“At 12Mbps, Dodo’s customers could not stream Ultra HD [4K] video at all,” Sims said in announcing the Dodo fine.
Yet is this a fair benchmark for video performance? After all, 4K has only hit the mainstream in the past couple of years and the premium pricing of 4K-capable services means many viewers continue to consume Netflix, Stan, and other services in standard high definition – which uses less data and may run over slower NBN services.
Dodo, for one, no longer sells plans with 10GB quotas – it offers $60 12Mbps 101GB and $70 50Mbps Unlimited options – but a similar $29.99 10GB plan from TPG Internet is currently being marketed with an NBN Key Facts Sheet that warns the service is unsuitable for streaming high definition or Ultra HD (4K) video.
Dodo may have admitted that its use of the word “perfect” was setting false expectations, but as 4K usage increases – analyst firm Strategy Analytics recently predicted the number of 4K-capable TVs on the market would grow from 200m in December last year to 600m by 2023 – the additional pressure on the NBN will mean setting expectations correctly will be critical.