In yesterday’s Crikey Clarifier we covered the main options for fixed broadband, and explained why fibre is faster and more future-proof than ADSL or cable. Today, wireless broadband, the magic of the “contention ratio” and how the network provider connects to an Internet Service Provider (ISP) to make “the internet industry”.

Wireless broadband uses the same technology as mobile phones. To build a wireless network, you still need a national network of high-speed cables between the cities and towns, but “the last mile” uses microwave radio links from those ugly cell towers instead of physical wires or fibres.

The advantages, obviously, are mobility and avoiding the cost of laying a cable to every home. But there are disadvantages they don’t mention in the glossy brochures. Wireless is inherently less reliable than fixed lines. Just like your mobile phone, it’s subject to interference, so there’ll be dead spots in valleys, alleyways or inside apartment buildings. I’ve seen a wireless broadband link cut off when a big metal truck drove past, causing signal reflections.

As Crikey explained yesterday, you can increase the capacity of a fibre link through multiplexing: more lasers using the same fibre. But a specific wireless system works at a fixed frequency and, thanks to the Shannon–Hartley theorem, it has a fixed data capacity. If you want to upgrade to higher speeds, that means replacing the wireless systems all round, not just a simple upgrade.

The other thing wireless providers “forget” to highlight is that the quoted speed is under ideal conditions, and is shared by everyone using that cell. If you have a 14Mbit/second ADSL2+ connection, that 14Mb/s speed back to your ISP is all yours. But with a 21Mb/s Next G link, say, that’s just in theory. Unless you’re standing right next to the cell tower and there’s no-one else around, you’ll only get part of that.

Of course all internet connections are eventually shared. It’s just a matter of where the sharing starts. An ADSL2+ or a fancy new fibre-to-the-home (FTTH) link is only “yours” back to your ISP, and then you’re sharing the ISP’s links to the rest of the world.

And that brings us to the contention ratio…

An ISP’s customers won’t all be using their connections at 100% capacity all the time. Most of the time, in fact, the links will be idle — customers are asleep, out, reading the page instead of downloading the next one. So if the ISP sells 10Mb/s plans to 100 customers, it doesn’t lease a 1000Mb/s link up to the rest of the internet, but maybe only a twentieth of that — for a contention ratio of 20:1. If everyone uses the internet heavily, no-one gets their full rated speed.

ISPs are very secretive about their actual contention ratios, but 20:1 isn’t at all unusual and some ISPs run at 50:1 or even more. There’s a reason “business grade” broadband is more expensive: one of the things you pay for is a better contention ratio.

The proposed NBN will also be a wholesale network. NBNCo will only provide the working fibre network in the ground, selling that service in bulk to ISPs with a single monthly or annual payment. ISPs then do the messy work of deciding how to structure the plans, acquiring customers (i.e. marketing and sales), technical support and billing. ISPs will also presumably provide mail servers and other tools, since NBNCo will simply provide the pipes.

ISPs are already familiar with this division of labour. No matter which ISP you chose for your ADSL connection, in most cases it’s using Telstra’s copper wire network — though with your ISP doing everything else.

The quality of support provided by an ISP is a key factor affecting their price and profitability.

Providing a human on the phone is much more expensive that replying to email the next day. A human based in Melbourne is more expensive than one in Mumbai, and more expensive still if they’re expected to translate the average punter’s confused questions into something their technicians can work with, rather than following a series of scripted questions.

Expensive business plans will let you speak directly to an experienced network engineer 24/7. At the low end, where the profit margin on a cheap broadband plan might be only $4 or $5 per month, you can expect to queue up to talk to a customer “service” droid. Again, you get what you pay for.

Crikey welcomes your dumb questions, and will find someone smart to answer them. Send your suggestions to boss@crikey.com.au with “clarifier” in the subject field.