LONG POST!!
The following is our announcement earlier on today regarding the changes.
Bear in mind (if you dont know) than PlusNet policy to be open,honest and make anything available to out customers, all out server and bandwidth graphs are on the website even webcams here in the office!
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There has been some speculation surrounding PlusNet's management of its broadband network and its response to customers utilising the service significantly beyond its design. The following information is provided to bring clarity to the situation.
It is important to understand that the wholesale cost for Broadband is made up of £8.40 (ex VAT) per month per customer for the local loop component and £31,130 (ex VAT) per month per 155Mb segment of a 622Mb central pipe (BT broadband network transit). Depending on customer mix and product mix, typically between 4000 and 10000 customers may be serviced per segment. The resulting costs per customer are common to all ISPs.
In order to frame the discussion further, industry average for Broadband utilisation is circa 7GB per month per customer, across all speeds, ISPs and account types.
PlusNet, Pipex, Zen, Nildram, Eclipse etc. all have to offer a better all round service than BT, Wanadoo, AOL and Tiscali and in most cases are also offered at a lower price. When looking at PlusNet's products specifically, Broadband Home Premier 512k at £21.99 (inc VAT) is a fixed cost service without a data transfer cap and with a contention ratio of 50:1 (up to 50 users sharing 1 unit of capacity).
It is worth bearing in mind that, due to the nature of variable usage across a customer base, there is always going to be scope for bursts of utilisation by individual customers in any given month. The issue is when users consistently use significantly greater resource than the product can support.
Considering all of the information above, we have budgeted for the average usage on Home Premier 512k to be up to 10GB per month. This budget is based on the current wholesale structure and pricing. However, there are many legitimate activities which can push people to using more than this per month, and so we have taken that into account in building the overall platform capacity.
It becomes very clear, if you put all the information together, that no ISP can sell sustainable Broadband for less than £30 inc. VAT per month and support users that continuously use in excess of 50GB per month in the current wholesale environment. By the end of 2005 every ISP will either be leveraging LLU, DataStream, UBC or CBC to provide Broadband services. Indeed, over the last 2 years, a number of ISPs have already started to deal with customers who have unsustainable usage, some covertly but others not so, including Wanadoo and Virgin.
Having established that specific customers were using the service significantly beyond its design, we identified that this issue was threatening the sustainability of the service for all customers. Specifically we have established a model that delivers an above average service for a below average price. However, this model cannot reasonably support customers consistently using an average of 50 times the service design.
At this point we looked at what other providers were doing in relation to this issue. We didn't feel that the approaches already taken were appropriate for our customers. They either went against our open and honest policy when interacting with customers, or did not enable an above average service to be delivered at a below average price for all customers.
We engaged the PlusNet UserGroup
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todiscuss potential methods of managing the very small percentage ofusers undermining the quality of service available to the rest of thecustomers at the price point being offered. Following thisconsultation, actions were decided and taken. The intent was to ensurethe fixed cost Unmetered Broadband proposition was maintained. Theintent was also to avoid the implementation of data transfer caps,which would affect all of our customers. The action taken was also designed to make other customers with usage patterns closest to the 0.3% (who may not have been directly impacted by the current process) also consider their usage levels.
The specific action was to request that 0.3% of all broadband customers moderated their usage. Their level of usage was inordinately high, resulting in an impact on the quality of service for all. This 0.3% of customers were using approximately 10% of the available platform. This equated to data transfer levels that were consistently between 140GB per month and
600GB per month.
The objective of this exercise was to protect 99.7% of the customer base from adverse effects resulting from the usage of the 0.3%. Natural outcomes of this exercise were identified as:
a) A voluntary change in usage by the 0.3% of customers b) Implementation of a solution to manage the overall capacity available to these customers c) Customers who didn't accept either a) or b) moving to another provider
As a result of yesterday's implementation, 8% of our total capacity has already been freed up for the majority of our customers and a performance improvement has been experienced by nearly all of our customers as a result. 0.2% of customers were initially given 2% of our overall capacity. Given the usage patterns of these customers, it follows that their own broadband experience is being impacted by each other's usage. For the first time this usage has not impacted the vast majority of customers.
We are committed to providing a high quality of service at a great price, and we will always take steps, to maintain this for our entire customer base. We hope that the measures that are currently in place will be successful; however there are a number of further options available which can be explored. These could include:
- Reduction in per-customer performance when individual usage goes beyond a certain level e.g. 100GB for a 512k service
- The introduction of charges for usage beyond a certain level e.g.
100GB for a 512k service
Any such additional measures would only be aimed at consistent unsustainable usage patterns, and would be undertaken following consultation & communication with our customers.
As a result of feedback received we are now looking to implement flexibility on the managed platform to facilitate access to the full potential of the network in non busy periods
While not everyone was going to be entirely happy with the events of the past few weeks as there was never going to be a magic solution for this problem. We have taken an approach that benefits the vast majority of our customers, short and long term.
Regards,
PlusNet Customer Support