Last night, Nick Hodge had a rant about slow broadband, a lack of competition and government interference in the whole mess.

The broadband debate is something that I find simultaneously very interesting, and very frustrating.   It’s interesting, because I love the technology involved, and the idea of having a faster internet connection instantly has me thinking of ways to utilise it.  It’s also incredibly frustrating because I know that without major changes to the pricing and regulatory structures - the current debate is merely an expensive waste of everyone’s time.

To understand why I think it’s a big waste of time, you have to understand what is involved in providing you and me with an internet connection over a technology such as ADSL.

Just for the physical network components, you’re paying for:

• A copper phone line (probably pre-existing network, since you needed to have a valid phone service), back to:
• An ADSL DSLAM (at the the exchange typically), which is connected to:
• A private fibre optic data network, which is connected to:
• Your capital city’s data centre for the DSLAM Operator, which is connected to:
• Your ISP’s Point of Presence (routers) in that data centre, which are connected to:
• Fibre optic connections to Your ISP’s data centre(s), or wherever they host their core network, which is connected to:
• Your ISP’s core routers, which are connected to
• Fibre connections to your ISP’s network peers and/or ‘upstream provider’ (aka: Your ISP’s ISP)
• The servers required to do the Accounting, Authentication, and Authorization

Note, the points in italic are not applicable if the DSLAM Operator is also the same as your ISP.

Then, of course there’s the non-network components - which comes down to basically two things: Staff to run all the above, and transit data costs.

What is transit data? Wikipedia describes it best on this article on Internet Peering:

[I]n order for [data from your ISP] to reach any specific other network on the Internet, it must either:

• Sell transit (or Internet access) service to that network (making them a ‘customer’),
• Peer directly with that network, or with a network who sells transit service to that network, or
• Pay another network for transit service, where that other network must in turn also sell, peer, or pay for access.

It’s this last one, that costs the majority of ISPs significant amounts of money. It’s also one of reasons why your ISP will generally limit you to transferring a certain amount of data per month. 

This is because most Australian ISPs are either Tier 3 or Tier 2.  Again, Wikipedia gives a great simple definition of what the different tier levels are.

• Tier 1 - A network that peers with every other network [at this level] to reach the Internet. [This network will also charge Tier 2/3 customers for access to their network.]
• Tier 2 - A network that peers with some networks, but still purchases IP transit to reach at least some portion of the Internet.
• Tier 3 - A network that solely purchases transit from other networks to reach the Internet.

Both Telstra and Optus (amongst others) are considered Tier 1 within Australia, even though on a world-scale they still pay for connectivity to other ISPs. The reasoning behind Telstra and Optus being classified as so is simple: They peer with each other, but sell transit to many other ISPs in Australia.

This massive imbalance in the local market is why I think that the whole debate about who’s proposal is the best, is a giant waste of time.  At least, I think it will be for those who choose not to use Optus or Telstra. 

It is also not a new occurrence. Almost exactly 10 years ago, Bill St. Arnaud wrote a paper about this subject.  Bill’s paper is demonstrates that in all these years, we apparently haven’t figured out how to solve the issue of imbalance in cost sharing. 

In Short: You simply won’t be able to afford to use any really high speed connection as intended for any length of time, because data costs are atrociously high.  I can’t really see the point of having a 100Mbit connection to your house, if you still have to pay the equivalent of $0.15/MB for the data you download.

What do you think? Is there some solution that I haven’t heard of for fixing these problems? Should be just concentrate on getting faster connections, and worry about the data costs later? Should I be banned from writing and publishing long blog posts at 2:30am?