NBN Co chief technology officer Dennis Steiger says after an upgrade, its networks originally used to deliver cable television will be able to cope when demand for streaming services like Netflix, Stan and Presto accounts for half of peak capacity.
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Speaking at the 2015 CommsDay Summit, Mr Steiger said the hybrid fibre coaxial (HFC) network that NBN Co bought from Telstra and Optus was a relatively modern network, when compared with other countries, and would be upgraded to deal with the growing demand for video content.
"The whole point of HFC technology is [to] deliver capacity when it is needed. This is really just pushing along its key strength; all networks need to be upgraded," Mr Steiger said.
"Netflix isn't new, it's been deployed around the world. In North America, we saw, at times, 50 per cent of the network capacity was being used by Netflix in terms of peak-hour usage. That's the kind of thing we can expect here; we just have to get ready for it."
Some trials of docsis 3.1 have yielded download speeds of one gigabit per second.
Optus upgraded large parts of its HFC network to docsis 3.0 in 2010, and Telstra began upgrading its HFC to 3.0 in 2011. In one scenario outlined in NBN's corporate plan, HFC could account for 27 per cent of the entire roll-out.
Telstra chief operating officer Kate McKenzie, speaking at the same conference, said networks would require investment to meet the growing demand for video content.
"[In] home broadband, the biggest impact is the explosion of video downloading. It is increasing as a proportion of overall network traffic and we've got an average of 50 to 60 gigabits per month, growing at about three gigabits per month," Ms McKenzie said.
"Each month, there's more than 27.5 petabytes of video carried over the fixed network. That's the equivalent of about 13 million hours of high-definition video per month."
Video – be it subscription video on-demand, internet protocol television, apps, YouTube or Facebook – accounted for well over half of Telstra's internet traffic, Ms McKenzie said.
"Content providers have become an important part of the internet value chain. Video on-demand currently accounts for 40 per cent of US prime-time internet consumption. But, that can be good news for us in the industry," Ms McKenzie said.
However, video came at a cost, especially when it was overwhelmingly consumed in peak hours, she said.
"Rapid growth in the quantity and quality of video needs investment to meet that increasing demand," Ms McKenzie said.
"In an NBN world, that means all access seekers paying for CVC (Connectivity Virtual Circuit) charges; that will be a material proportion of these costs and which, no doubt, will adjust to increasing consumption and increasing volumes over a period of time."
The Akamai state of the internet report said, in the final quarter of last year, Australia had an average speed of 7.4 megabits per second.
Akamai, which counts Apple, NASA and the BBC among its customers, helps deliver content such as video and accounts for between 15 per cent and 30 per cent of web traffic.
Akamai chief media strategist David Habben said the company could deliver 4K video streaming to just 6.5 per cent of Australian connections.
"Consumers expect a broadcast-like experience online. It's no longer enough to separate the two as different things," Mr Habben said.
