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How PlusNet Buy Capacity

This page was produced by the PlusNet comms team in response to questions about capacity on the PlusNet network.


Introduction

We have designed our range of Broadband products to offer great value for money and a quality of service for everyone in a sustainable way. We want to provide clear expectations to our customers about how your product will perform now and in the future. We have developed a model that means we can guarantee a quality experience while providing increases in line speed while still allowing for increased usage from new applications.

UK broadband networks

BT provides almost every UK ISP with the connections between their customers and the ISPs own networks. ISPs pay BT to connect their customers from the local exchange in two ways. BT charge ISPs a rental for each customer’s ADSL line, and also for the amount of data transferred across their network. This model is replicated by the wholesale LLU providers. At the end of January 2006 there were only 250,000 lines compared to nearly seven million delivered by BT Wholesale - the impact of LLU simply isn’t there at present.

The PlusNet Network

 

In 2004, through the introduction of Capacity Based Charging (CBC), BT lowered monthly rental costs, but increased bandwidth charges across their network to compensate. This enabled PlusNet to pass on big subscription savings to customers, and demand has rocketed as a result of the lower pricing that became possible.

ISPs pay their wholesale suppliers for the cost of the ADSL line, usually between £6 and £13 per customer per month and then for the backhaul bandwidth for all their customers. For example, a 622Mbit/s BT Central, which would support around 300 2Mb/s customers downloading at their full line speed, costs £125,000 per month.

At the same time as moving to Capacity Based Charging we also moved from 155Mbit/s BT Central Pipes to 622Mbit/s BT Central pipes with 155Mbit/s segments, which are more efficient and deliver higher capacity The lead times and associated commitments involved when ordering capacity from BT exacerbated these problems..

Because of this, along with our planning rules at the time, we ended up with approximately 1Gb of over-capacity in our DSL backhaul infrastructure by January 2005.. It also became clear that looking at a future of increased connection speeds; we needed to manage our network carefully to prevent all of the available bandwidth being used by a small number of customers. We also needed to ensure that we no longer commission too much capacity which would undermine the sustainability of the service we provide.

The over capacity problem was further exacerbated as the majority of downloads changed from being predominantly music, to much larger files DVD sized files. Because of the over capacity described previously, very heavy usage customers were able to continue to use as much bandwidth as they wanted.

During 2005 we developed the systems that  ensure that customers’ higher speed connections will not become unresponsive due to a single program taking too much priority when multiple applications are in use

Having gone through the pain of this process (some of which was self inflicted) we have now solved this issue, where many other ISPs are only just getting their heads around it.

How we plan budgeted bandwidth

Our products have always been designed around the wholesale access costs we incur. We plan the amount of money we spend on network capacity based on the number of customers using the service, and most importantly the type of products these customers are on. There is a direct relationship between the amount a customer pays, and the budget for our overall network capacity. Likewise there is also a direct relationship between the total number of customers on the network, the total revenue and the amount of bandwidth we supply in total.

The following table gives some rough examples of how much bandwidth we can provision on a sustainable basis for each customer, based on current wholesale costs. We’re not able to give the exact figures as these are commercially sensitive and as a PLC we have to be careful about disclosing sensitive information:

Planning Bandwidth Costs

* These sums are for demonstration purposes only and are therefore approximations. The relationship between the amounts is accurate, so can be used to compare between products.


With the money budgeted for backhaul bandwidth we then work out how many GBs per month customers can use. We call this the ‘budgeted bandwidth’ which is the level of average usage for each product which is sustainable to provide. We also need to make sure it is attractive against competitor offers so that we remain the best value ISP.

Because of the variable nature of usage across nearly all of our customers, it is possible for us to provide a substantially higher bandwidth allocation for the Sustainable Usage Policy for our products. This headroom can be used by those who want it, provided that the overall usage by every customer on that product type stays at or below what is a sustainable amount of capacity for us to provide. You can also see a clear differentiation between products with different prices – in the above example Premier gets more than three times the budgeted bandwidth than Plus does.

Managing the network to budgeted levels

Maintaining our overall network capacity at a level which matches the design of our products is essential. By achieving this, we can guarantee both performance and great value for money. Our approach also allows us to utilise the quieter times on our network for everyone’s benefit. We will continue to offer the ability for customers to perform large downloads overnight and at quieter times, without needing to monitor or manage usage levels - Ideal for those people who are prepared to schedule larger downloads which they don’t need immediately.

By setting realistic expectations for customers, and where necessary through the use of network management and traffic prioritisation on our platform, we can ensure that as speed upgrades are provided to all our customers we won’t have to increase prices. Our goal is always to make sure that at the busy times on our network, sensitive services like web surfing take priority over other protocols such as those used for file sharing (any slowdown while web surfing quickly becomes very frustrating!). As we continue to develop and automate our management techniques, we will be in a position to make these processes smoother. 

Meeting the demand for ever faster connections in the future, coupled with the continued growth of high bandwidth applications, is a challenge facing every broadband provider. Balancing the economics we face against the demands of our customers has taken a lot of time and effort and has been a far from flawless process. We have now developed a network management strategy that we believe is fair for everyone and will allow us to continue to offer a quality product even when much higher speeds are common. A better understanding of our users, coupled with the improvements we are making in our network management technology now mean we are very close to meeting the challenge.

Adoption, convergence and evolution

Following the nationwide rollout of up to 8Mb services from April, and as services such as IPTV become more popular, bandwidth demands will increase and customers will start to download more and more movies overnight ready for watching the next day. Alongside that, customers may choose to pay a small premium for short term speed boosts at peak times, or could pay to have higher capacity products. Our products will evolve to accommodate these changing demands. We will also respond to the changing nature of the wholesale costs we face, as and when they occur. As those costs naturally become lower, our model ensures the benefits can be passed directly onto customers through lower pricing and additional capacity. We are also continuing to develop our relationship with a number of alternative network providers, who at some exchanges are able to provide competing wholesale ADSL products.

We published our Vision for 2007 and we’re now delivering on it. In the coming months we’ll publish our vision for 2008 with more detail about how we view a world of converged communications and entertainment applications which have high-speed broadband at their heart. We will continue to work hard in order to keep our products up-to-date and attractive for all our customers. As ever, we welcome all feedback on any aspect of this discussion.

Regards,

Stewart Norriss
PlusNet Comms Team

Related Links

Usage split by month page (Plus)
news_BBPlusDecUsage.php

Current network management policies - http://www.plus.net/support/broadband/network/traffic_management.shtml

PlusNet Vision for 2007 – http://www.plus.net/features/news/plans2007.shtml?link_reasons=5_plans_2007

Article last edited on Saturday, 13-Mar-2010 01:05 AM