Australia's Vertical Disintegration: Part 2

The Telecommunications Sector: On the process of updating wired broadband services from Fibre to the Curb to Fibre to the Premises, or why it takes over a month to travel the last 10 meters.

It is infrastructure week (month, quarter) at the Transportist Homestead.

This post continues our look at Australia’s vertical disintegration of essential infrastructure. Last time, we explored electricity (Part 1 on Electricity).; now, we turn to broadband, another sector where service provision is fragmented, leading to inefficiencies and consumer headaches. Much like the electricity market, Australia’s broadband sector separates infrastructure ownership from service delivery, an approach that, in theory, promotes competition but, in practice, often leads to blame-shifting, bureaucracy, and customer frustration.

We need more fibre in our lives

First, in late last year I got fed-up with my ISP (and Wireless Provider) Vodafone. “Why?” you may ask. No, you won’t ask. The answer is obvious, everyone is fed up with every service provider. This story is the specific instantiation of that fed-uppedness.

Initially it was that I wanted Fibre to the Premises (FTTP), rather than Fibre to the Curb (FTTC), which is what we had for the past 4 years. FTTC relies on old telephone copper wires to connect the house to the curb. FTTP was now available in my neighbourhood, and had been for over a year, since NBN had completed its long-delayed backbone rollout. So this would be in theory an improvement in service from when I moved in, and I had it in Minneapolis in 2014, and it was among the last missing link to ensure that I had no further nominal degradation in quality of services from the US to Australia, the time seemed ripe. This fits in with the general notion that Australia is 10 years behind the US in technology adoption and cultural shifts.¹

To be clear, my previously existing National Broadband Network (NBN) FTTC internet service was certainly cromulent though not excellent, and I was paying for and sometimes receiving 80 Mbps,² this speed being carried on fibre from the Internet Service Provider to a hole in the ground next to the footpath (i.e. the Curb), and copper wires from the Curb into the house. This was sufficient to stream 5 videos simultaneously most of the time without much buffering (if everyone were watching their own stream). But that was the maximum, and there were the occasional hiccups, and it seems like this conversion should be simple enough, and the conversion was free, and being offered and advertised, to be paid for by NBN or the ISP, unclear which, but not me, at least not directly, so why not?

It should be noted that in Australia, there is economic separation of the monopoly providers of wires (electric and broadband) and the service providers riding on top of them. So rather than the vertical integration common in the US (where, e.g. the old cable TV monopoly, say Comcast/Xfinity, provides Broadband Internet, CableTV, telephone, security services and owns the wires those services run on, and may be competing with the old Bell telephone monopoly, say, Verizon, in all of those things), in Australia, the National Broadband Network NBN owns all the wires, but doesn’t deal with end customers, instead that job is farmed out to companies like Vodafone (TPG), Optus, etc. who compete on prices and service nominally, packaging up customers into various tiers that they acquire from NBN, and provide customer service, so NBN doesn’t have to deal with me.

Vodafone

So I called Vodafone³ to do the FTTP for my wired broadband, and the wireless service guy (based in India if my discernment of accents is correct)⁴ hijacked the call and told me he could lower my rates. The annual contract had expired on wireless and rates were going to go up on 4 mobile phones and two watches, and I’m all about lowering rates, so sure. Of course he has to apply the $5 month discount to each and every phone number. This took approximately an hour (seriously, no exaggerations). Lord knows why it took an hour, he was there every step of the way. This cannot be cost effective of itself, so presumably is intentional to get the customer so bought into the process they make a sunk cost fallacy and won’t change providers due to the anticipated headache. After that was done I was forwarded to the Internet lady, also from India.

I say that I want FTTP, and she basically says (and I asked this a hundred different ways because it sounded so wrong) that I would be out of service twice for some period of time (how long unclear, but longer than 15 minutes) because NBN would deprovision my existing service when it provisioned by new service. I would also need to buy a new modem. They were strangely not happy to sell me one. They didn’t seem to want to do this. This went back and forth for a half an hour and I did not get my FTTP in 2024. I did vow however not to work with Vodafone further on this matter.

This experience highlights a core problem of vertical disintegration: responsibility diffusion. In a vertically integrated system, a single entity owns both infrastructure and service delivery, meaning they have full control (and accountability) over performance. Here, NBN owns the infrastructure but outsources customer service to ISPs, who in turn rely on overseas call centers, further removed from the actual product. The result is a system where no one party truly owns the customer experience, leading to unnecessary inefficiencies and frustration.

The market is competitive. I have my choice of brand of companies who hire probably the exact same customer service teams in developing countries to truck with, and my wife suggests Tangerine.⁵ So I call them in late January.

Tangerine

Tangerine tells me I need a new modem, because the old modem was only good for FTTC and phone cables, not FTTP and ethernet cables, ok, its four years, technology moves on. Vodafone probably could have supplied me a better modem four years ago, but I didn’t think about it at the time. They say it will be “plug and play”. Ok, I pay them money for modem and first month’s service, and wait for modem. The modem is delivered in short order.

But “Plug and play”? … NO, you have to configure the modem AND call them. I have to log into the modem through an IP address, enter a long userID and password. Maybe some things are prepared in advance, but not all of it. It’s “Plug and Open up Browser and Type a string of numbers and Search for the right menu and Type carefully and Call and Wait and Wait and Wait and Pray and Play”. I suspect that expression is not as marketable. It is now January 30.

They cannot for some reason, pre-configure your account to be recognised once the modem is plugged in. Tech Support blames NBN Provisioning Team.

I ordered NBN100, but only get NBN 50 (50 Mbps on a good day, at a good time, when the moon is blood red) when we do this because we are still using the old FTTC, not the new FTTP, since the Fibre Optic cable has yet to be laid from the curb to the premises. But I remember that I was at NBN 80 with Vodafone, so now my service has been downgraded 37.5% because Tangerine doesn’t supply NBN80, only NBN 50 or 100.

This isn't just my experience. As of February 2025, Australia ranks 81st globally in fixed broadband speeds, with a median download speed of 80.49 Mbps, trailing behind many developed nations (Speedtest Global Index). The global average is 93.93 Mbps, meaning Australia is underperforming relative to worldwide benchmarks (SBS News).

Even with a recent $3 billion government investment to transition more connections from copper to fiber, improvements have been slow and unevenly distributed (ABC News). Meanwhile, countries like Singapore, South Korea, and Hong Kong offer far superior broadband speeds (TechHero).

The issue isn’t just about speed, it’s about reliability, latency, and the inefficiencies created by having so many intermediaries between infrastructure providers and consumers.

WiFi

There is interference with my existing WiFi Mesh Network and the WiFi coming off the modem. Because I am sufficiently clever and previously worked at a modem company in a former life, and saw this once before when a microwave oven was interfering with WiFi at my sister-in-law’s house, I figured this out. Normal people will generally not figure this out.

ChatBots

The Tangerine ChatBot “Peely” is worse than useless.⁶ It sucks away time without giving an answer OR transferring to a human, despite it being “within business hours”, and then disconnects. It is somehow worse than an LLM.

Customer Service

Eventually I call. They know what phone I am calling from, but still need a one time password (or OTP for those in the know) texted to me at that same phone number. Like anyone else would voluntarily subject themselves to phone support so that I might get Internet service.

Phone support disconnects me, at least they called me back.

Their staff is also based in India, but I also guess the Philippines, depending on the team. They were all trained to be very apologetic, and the Philippines guy said I would only pay for the lower rate til the higher speed was service, and suggested I might not have to pay at all. (Narrator: He had to pay). The difference in rates was $3/month.

They tell me that NBN install is to be scheduled within 48 notified of update. Staff can’t email, only call or text. Not that it will be installed, just scheduled within 48 hours.

Seriously, these organisations need to engage in Dogfooding. It would appear no one in any of these organisations has ever ordered their own product.

NBN

NBN is appropriately scheduled.

Visit 1

More or less at the appointed time, a team, a young man and young woman, arrive. They ask where the existing cable was, because their plan is to fish fibre optic cable through the existing conduits. I show them where the NBN staffer had gone 4 years ago. They say they can’t go into crawl spaces. The man was pretty big, he might not have fit, but the woman certainly could have. “New rules” they say. “Training requirements” they say. They say something about a house collapsing on some NBN crewmember in Tasmania. (This sounds a lot like urban legend, ChatGPT informs me of an anonymous Facebook post of an NBN contractor dying on site in Tasmania, not being crushed by a house). After 30 minutes of back and forth, they offer nothing, saying it’s the ISP’s responsibility. I later learn the appointment was cancelled (the appointment which clearly happened, though nothing was done). I assume this is more or less dead, Tangerine isn’t sure if it is me or NBN who cancelled, but after about a week someone reschedules.

Visit 2

A few weeks later a competent person comes, he’s a contractor, not an NBN staffer. After much effort, he cannot successfully fish the fibre in the existing conduit because it was blocked. So new conduit is required, and that requires a Civil team. Nevertheless, he gets the box installed in the house, and a connection to that outside of the house. Surely the first crew could have done that with the slightest bit of imagination or experience, even if they could not go into a crawl space or lay conduit because that was beyond their skill set.

Visit 3

The civil crew was guaranteed to occur by March 25. In fact, it occurred on March 10, a Sunday, when the contractor called me out of the blue and asked if I would be home in the next 10 minutes. OK, I was. Apparently they had rolled up earlier in the week without calling, and I was not home, and my daughter didn’t know what was going on, and didn’t inform me. So three Vietnamese immigrants get out of the truck, set up signs in front of the in-ground cable boxes, they prod the conduit after the find it (really, it’s 2025 and we don’t have digital maps of where cables go, I made fun of my friend in 1985 who worked for the phone company for not knowing where cables went), and they dig holes. Eventually (~6 hours later, so 18 person hours), mostly new conduit is laid, the cables are connected to what the previous contractor had set up, and my NBN lights up with the correct colours. To be clear, these guys were working fairly hard and continuously over this time.

Visit 3: New Conduit being laid. The tree roots probably broke the previous conduit with the existing copper wires preventing the NBN staff from fishing. The contractors returned everything to good condition before they left.

Time to Plug-in

So I bring my modem downstairs to plug into the new NBN box and crickets. It doesn’t work. Wait, they say, it takes time, NBN has to provision it. A few hours later I call. After waiting on hold for 30 minutes with Tangerine (It’s a Sunday, so whatever, but get new music and replace the stupid messages) they were surprised anyone had come out at all. They would look into and get back to me tomorrow (Monday). They may have looked into it, but they didn’t get back to me. I called Tangerine Tuesday morning, they said NBN had been asked to chase it up. In the early hours of Wednesday morning I got a text from Tangerine saying NBN had provisioned it and I can plug in my modem. Which I did, and which remarkably worked correctly the first time (although only at 90 Mbps from my measurements using Speedtest.net, so no guarantees, but nevertheless, better than previously).

Later that morning I got another text from Tangerine saying they are still waiting for an update from NBN. Then I got a phone call from someone who said they were from Tangerine. (I assume they actually were, but how does one actually know?). They asked me my name … ok. Then they asked my account number. What!? It’s a violation of any kind of identity security to be giving out numbers to people who call you out of the blue. Anyway, I gave him a fairly mild mannered (for someone raised as an American, probably really rude for someone from their country) “what the hell man” and a brief speech about security, which I think he understood, and told it to pass it up the reporting chain. And I told him my NBN service was now working, which surprised him.

It is now March 12. Both my old and new NBN services are presently active. I imagine the old service will be deactivated at some point, as I would hate to be paying for both. (Narrator: It was eventually disconnected, so the system worked eventually.)

Coda

Obviously in retrospect the time lost in getting this installed (me, vendors, installers) won’t be made up for a long time in terms of faster downloads. So knowing what I know now, I don’t know, it’s certainly not socially beneficial to go from 80 to 100. However, FTTP enables 250 or 1000 or higher Mbps which might be useful in the future of 3D holographic images or high-definition real-time gaming. But today it makes no difference, since the other end of almost every connection is also bandwidth limited.

The real issue isn’t just whether going from 80 to 100 Mbps is worth it today. It’s whether this fragmented model of broadband delivery will allow Australia to scale effectively in the future. The NBN’s structure all but guarantees bureaucratic inefficiencies, as responsibility is endlessly recirculated between ISPs and infrastructure providers. Would reintegrating service and infrastructure improve reliability? Should Australia move toward a more direct, customer-facing NBN? Why does the seemingly similar disintegrated electric sector work better than wired broadband? These are questions policymakers need to take seriously if they want an internet system that’s not just barely functional, but genuinely competitive on a global scale.

1. (10 years is probably an exaggeration, this is no New Zealand)

2. 80Mbps, ~80 million baud. My first modem was 110 baud, 110 bits per second, with a Hayes Modem on my Apple ][+, so this was a clear upgrade in service over 4 decades, and I should be grateful for technological progress. But I also nominally get 1000 Mbps at work. In practice, the bottleneck is not on-campus internet, but everything else in the world.

3. This is Vodafone Australia, which is historically related to other Vodafones, like Vodafone Hutchison Whampoa, but also isn’t any more, and is now part of TPG: https://en.wikipedia.org/wiki/Vodafone_Australia

4. Another perspective is that NBN just outsources customer service to these needless middlemen. It’s a rort, creating jobs in developing countries whose people have the good fortune to speak English at the cost of an additional layer of Australian-based profit extraction.

5. Who owns Tangerine? ​Their website doesn’t tell me much. ChatGPT says “Andrew and Richard Branson, [Ed: Not that Richard Branson] originally from Somerset, England, moved to Australia in 2004. They began their journey in the telecommunications industry by establishing a small telco sales business. In 2005, they founded IF Telecom, which they later sold to Smart Business Telecom (now Vocus-owned) in 2013. Following the sale, the Branson brothers launched two ventures in 2013: More Telecom, focusing on business-to-business services, and Tangerine Telecom, targeting the consumer market with NBN services. Under their leadership, Tangerine Telecom experienced significant growth, ranking third in the Australian Financial Review's Fast 100 list in 2021. In 2021, the Commonwealth Bank of Australia acquired a minority stake in both More Telecom and Tangerine Telecom, forming a strategic partnership to offer discounted NBN services to CBA customers. ​Both Andrew and Richard Branson are Australian citizens residing in Melbourne.” There is also no wikipedia page, Commonwealth Bank is a former government-owned bank here that remains the largest bank in Australia. From other information it appears Tangerine seems to rely on Vocus Communications for the actual telecommunications part, so near as I can tell, I talk to “Tangerine”, and they are resellers for or subcontract to Vocus, which interfaces with NBN to provide the actual service.

6. TO BE CLEAR, I DID THIS 3 TIMES, WITH EQUIVALENT RESULTS

Start Time: 30/01/2025 08:22:14

End Time: 30/01/2025 08:24:34

Agents: Peely

Transcripts:

Peely has joined the chat.

[30/01/2025 08:22:14] Peely : Hi I'm Peely, Tangerine's hero for all things internet and mobile

Let me know how I can help you today by choosing from the options below or typing in the chatbox, but keep it simple I'm just a bot [Sales] [Customer Service] [Tech Support]

[30/01/2025 08:22:33] Visitor: I ordered NBN 100 and was provisioned for NBN 50.

[30/01/2025 08:22:36] Peely : Are you an existing Tangerine customer wanting to find your nbn® plan's capable speeds or a new customer looking to purchase an nbn® speed plan? [Existing Customer] [New Customer]

[30/01/2025 08:22:40] Visitor: Existing Customer

[30/01/2025 08:22:40] Peely : You can check your download and upload nbn® speeds at any moment by doing a FREE speed test online here. To find out your property's max attainable nbn® speed you should do a speed test during peak (7pm-11pm) and off-peak (any other time) periods over 3 separate days. The highest of the tested speeds may be your maximum attainable speed.

Did this answer your question? [Yes] [No]

[30/01/2025 08:22:46] Visitor: No

[30/01/2025 08:22:50] Peely : Sorry I couldn't answer your question today. Let me transfer you to one of my human team members to help you

[30/01/2025 08:22:51] Peely : Can I check if you are a new or existing customer? [New Customer]

[Existing Customer]

[30/01/2025 08:22:56] Visitor: Existing Customer

[30/01/2025 08:22:56] Peely : I will verify your identity by sending a one-time-pin (OTP) to your mobile. Please enter your account number

[30/01/2025 08:23:17] Visitor: XXXXXX

[30/01/2025 08:23:17] Peely : Thank you. Now please enter the primary mobile number on your account.

[30/01/2025 08:23:26] Visitor: XXXXXXXXX

[30/01/2025 08:23:27] Peely : Sorry, the details you have entered don't match our systems. Please enter your 5 or 6 digit account number. This can be found at the top right of your bill or in the Customer Portal.

[30/01/2025 08:24:10] Visitor: XXXXXX

[30/01/2025 08:24:10] Peely : Thank you. Please enter the mobile number of the primary account holder.

[30/01/2025 08:24:22] Visitor: XXXXXXXXX

[30/01/2025 08:24:24] Peely : We have now sent you an OTP on SMS. Please enter the 6 digit code below.

[30/01/2025 08:24:30] Visitor: XXXXX

[30/01/2025 08:24:31] Peely : Your ID verification was successful, thank you Hold tight while I get someone from our Sales team to help you.

[30/01/2025 08:24:34] Peely : Apologies as there are no agents currently available. Please check our contact us page for our opening hours and other ways to contact us. [Contact Us Page]

The chat is ended. (30/01/2025 08:24:35)

YOU WOULD THINK THEY COULD CHECK IF AGENTS WERE AVAILABLE BEFORE GETTING THE INFORMATION.

FIN