Do the OECD stats support the NBN?

Do the OECD stats support the NBN?

Summary: Communications Minister Stephen Conroy has seized on figures released by the Organisation for Economic Co-operation and Development that benchmark global broadband pricing, stating that they show broadband prices are still too high in Australia.


Communications Minister Stephen Conroy has seized on figures released by the Organisation for Economic Co-operation and Development that benchmark global broadband pricing, stating that they show broadband prices are still too high in Australia.

The statistics on pricing, dated September 2010, compare the range of prices that consumers pay for broadband in OECD countries at different speeds.

This is how Australia performed:

  • For connections slower than 2.5Mbps, Australia ranked 3rd most expensive behind Mexico and Chile;
  • For connections between 2.5Mbps and 15Mbps, Australia ranked 3rd least expensive, just behind Greece and Austria;
  • For connections between 15Mbps and 30Mbps, Australia ranked 14th most expensive of 33;
  • For connections over 45Mbps, Australia ranked 12th most expensive out of 33; and
  • For connections between 30Mbps and 45Mbps, Australia was not included in the statistics.

Conroy said in a statement that the latest statistics highlighted the critical need for the National Broadband Network (NBN) roll-out to "open up a genuine choice of services and drive competitive prices for consumers".

"The government expects retail prices for high speed broadband services offered on the NBN will be both affordable and very competitive for all Australians no matter where they live," he said.

"If Australia wants to remain competitive in our region as the world moves to a 21st century digital economy, then we need to act now. The NBN is about investing in the future and the Gillard Government is getting on with delivering it."

However, in a blog post this afternoon, Shadow Communications Minister Malcolm Turnbull pointed to Australian Bureau of Statistics (ABS) data that said that most Australian customers do not use high speed broadband, instead opting for speeds between 1.5 and 24Mbps — most of which falls into the lower price range. He said that those on speeds of less than 2.5Mbps should be moved onto higher connections as soon as possible but said that the NBN is not the fastest way to do this, with construction on the project not due for completion until 2020.

He said that government-owned monopolies such as the NBN will not do anything to facilitate competitive prices for broadband.

"In fact, the main reason the government has legislated against Telstra and Optus using their [hybrid-fibre coaxial] networks to compete against the NBN and other operators from 'cherry-picking' NBN customers is because it fears that facilities-based competition will deliver lower prices in the city, undermining the NBN Co's ability to charge higher prices," he said.

Indeed, the NBN may have just the opposite effect on broadband prices, Turnbull warned.

"Most concerning, however, is that the NBN will reverse a long-term trend of very rapidly falling prices," he said. "OECD statistics show that between 2005 and 2008, DSL prices in Australia fell by 45 per cent (because competitors had been kept out of Telstra's exchanges for so long, you could argue that prices were artificially high in 2005 — but nonetheless, the figures reveal what happens when competition is introduced)."

Turnbull argued that it wasn't a lack of access to high-speed internet technology that prevented many Australians from getting online but simply the ability to afford a connection to the internet.

"For all of Senator Conroy's rhetoric about eliminating the tyranny of distance, the biggest barrier to Australians taking up broadband is its cost," Turnbull said. "ABS figures show that there is a disparity in access to broadband between households in major cities and households in remote areas — 75 per cent compared to 62 per cent (the national average is 72 per cent)."

"But the disparity is much greater when household income is taken into account: 94 per cent of households earning more than $120,000 a year have access to the internet at home compared to only 43 per cent of households earning less than $40,000 have access to the internet."

Topics: Broadband, Government AU, NBN


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • "most Australian customers do not use high speed broadband, instead opting for speeds between 1.5 and 24Mbps"

    Turnbull suggests that most people have the option to "choose" their connection speed. As someone whose house only achieves 3 Mb download because of distance, may I comment that I would LOVE to be able to pay extra and achieve 5 or 10 Mb download. But I dont have a choice yet! Roll on NBN....
  • So i choose to be held hostage to .5-4mbps? You gotta be joking.. I want 100mbps, whos going to give it me? Lets drop the tripe and lets keep rolling out the NBN. Dont want wireless either..
    Paul Grenfell
    • You will get 100mbs from your premise to the NBN POI. What happens after that is anyones guess!
      Blank Look
      • While your argument has a kernel of truth to it (as all the best FUD does), it, and it's logical next step ("why bother building a good network if servers/links are slow" being what you are inferring), are effectively is the same as saying "Our roads are congested, so why bother buying a real ambulance, when a horse and cart will do".

        Welcome to the World of Tomorrow Visionary! Please leave your horse at the gate...
        • tinman_au, the point I am making is that we need to be thinking now past the POI and encourging debate on the performance of ISPs, esp backhaul.
          Not intended as FUD (as you put it). Lets discuss the issues not insult people.
          Blank Look
          • I agree with you about thinking beyond the NBN, with a network like it, international traffic could become a real bottleneck if the gate ways aren't opened up a lot.

            I also apologise if you found my comment insulting, I was aiming more for humorous ;o)
          • You guys should view two technologies that will definately meat your concerns. Intel have developed Light Peak which is a new communication technique and will be the way of the future for netwok communication. Also visit the University of Sydney website and search for CUDOS which is an R&D body researching photonic chips. These will be the future for netowrk switches. They can't be too far away as I saw a documentary on the ABC in 2009 saying they were already testing the product.
          • Visionary said - "Lets discuss the issues not insult people".

            Hypocritical (and sneaky) comment my friend [sic] considering only a few days ago under your "other posting name - Doubt" you referred to another poster as "a poor deluded soul" and a "goose"...

            Cut the BS, please... what's good for the goose (pun intended) is good for the gander!
          • My good friend "Visionary" does not insult people RS. In fact Visionary told me that his first ever post on another forum was roundly condemned by you and your good friend DW. For that reason I (Doubt) feel as though you and "salad fingers" friend are fair game.
            Knowledge Expert
          • Ah yes... taxi...!
          • Thank you, better than a taxi, take buy a plane ticket to Korea, North Korea. Many would be happy about that!
            Knowledge Expert
          • a one way ticket please!
            Knowledge Expert
          • Certainly goose...

            And I only call you goose, goose, because you claim that you calling another poster a goose (as you did eh goose...LOL) isn't an insult, don't you goose?
          • Thank you, please advise all us your depature date so we can have a party the following day!
            Knowledge Expert
          • The ticket's for YOU goose...LOL

            Are you unable to comprehend anything...?
          • Thank you, I mentioned only one ticket and intended that for your use. I prefer not to travel with people who have narcissistic traits!
            Knowledge Expert
          • Makes it hard for you and visionary then doesn't it? Two narcissistic egos wrapped into the one...goose!

            But to spell it out for those not too bright (YOU), the taxi was called for you due to your obvious intoxication (you had to have been P***ed, with such ridiculous comments surely), but you then asked for a one way plane ticket to Korea, instead, which I agreed to!

            No wonder you find it so hard to understand the workings and benefits of the NBN when even basic correspondence is beyond you!
    • paul grenfell,better checkout nbn's website if you're not in a major centre,if your town isn't on the list in the "our coverage",section for fibre,then wireless or satelite it will be,
      100% FTTH,the only way
  • Turnbull is obviously utterly, utterly clueless about how our industry is structured.

    "Opting for" - Well yes, when the choice is more expensive and slower, you would opt for the cheaper, faster one. However, that is really the only choice we have here - except for those lucky enough to have HFC available.

    I am told on good authority that Turnbull himself "opted" for a 100mbit cable service.
    If he's so keen to point out how we don't need 100mbit, and wireless is the future, then I suggest he should take the lead. Ditch the cable and "opt" for a 3G dongle.

    If he further believes that he should encourage competition, then he should chose his dongle from a provider that offers wholesale products. This rules out Telstra. An Optus based 3g dongle should compare nicely to his HFC.
  • I run my business (an Internet based business no less) on the outskirts of Darwin (which is a Capital City) on a 7mbit connection because that is all I can get. I would happily pay for more if it was offered here, but I can't.

    As others have said, we aren't choosing up to 24mbps we are forced to accept it!