Hackett's NBN rejig costs customers: Conroy

Hackett's NBN rejig costs customers: Conroy

Summary: Communications Minister Stephen Conroy has dismissed Internode's proposed pricing model for the National Broadband Network (NBN), stating it will pass costs directly onto consumers.


Communications Minister Stephen Conroy has dismissed Internode's proposed pricing model for the National Broadband Network (NBN), stating it will pass costs directly onto consumers.


Communications Minister Stephen Conroy (Credit: Josh Taylor/ZDNet Australia)

Internode managing director Simon Hackett warned last week that the pricing model for the NBN, in conjunction with 121 points of interconnect, would price internet service providers (ISPs) with less than 250,000 customers out of the national market.

On top of the basic charge for access to the NBN for each individual customer, there's also a connectivity virtual circuit charge which secures bandwidth to a consumer from the point of interconnect. There's also another charge to connect from the point of interconnect to the ISP's backhaul. The former charge, in addition to the costs for deploying a connectivity virtual circuit at every point of interconnect, would be a burden on small ISPs, according to Hackett.

One of Hackett's proposed options was — instead of charging a CVC cost — to increase the basic wholesale cost (Access Virtual Circuit or AVC) for every customer by around $1 to even the balance.

Conroy today rejected this proposal, telling ZDNet Australia that it will be adding costs onto the consumer.

"I think he's acknowledging that [the proposal] will put up the AVC pricing, I mean he's offered a range of options, but the government has made a decision we're not going to charge pensioners more per month," he said. "Simon's said it's only a dollar a month for the base model but we're not going to start charging people more than what they're paying today."

Conroy acknowledged that the pricing model had been the subject of "very informed debate" online, led by Hackett.

"I think some of Simon's arguments have been very valid but that doesn't mean they are the answer to all the solutions."

Conroy said that Internode, the government and NBN Co were in agreement that there should only be 14 points of interconnect on the NBN; the argument was with the Australian Competition and Consumer Commission.

"The bottom line is Simon is agreeing with what the government and NBN Co put forward and I wish that the debate had perhaps gone a different way but we have accepted the umpire's decision," he said.

When questioned as to whether ISPs would be burdened with the cost as Hackett had warned, the minister argued that under the current pricing model, the market would evolve and competition would ultimately drive lower prices. He said that the fact that twelve ISPs today signed up to offer services at the first mainland release sites for the NBN showed that competition is alive and well.

"It seemed like more than five to me. Predictions of doom and gloom are a little early and the point is let's see how the market evolves in this," he said.

Conroy today launched the Australian Communications Consumer Action Network's consumer guide to the NBN. Conroy said that the plain-speaking guide is aimed at explaining the roll-out to consumers in an area where "geeks tend to dominate the debate".

Topics: NBN, Broadband, Government AU, Telcos


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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  • One would have thought the models on installation and pricing would have been in place before attempting the project. How can you build and offer a service if you do not know how much it will cost and what you can charge to attract customers and recoup your outlay because if it is to expensive no one will use it. The mind boggles how dumb is this Conroy guy.
  • Well... it's a good thing that we have experts such as Quigley running the show, leaving Conroy to simply rubber stamp and do the political bun fighting against a bitter and visionless opposition, then eh?
  • Rs. This is not about politics. If the NBN is too expensive it will end up a tax payer funded black hole. Your wasted money as well as mine.
  • You actually believe that by investing in a comms network for the Australian people (remember the copper will not last forever)... a network which will pay for itself in time, simply via clientele and with the potential to be sold off later, making $b's in profit, is wasted money?
  • Don't worry about any future rejig costing customers Conroy have at look at what's happening NOW!

    "QUEENSLAND has all but thumbed its nose at the controversial national broadband network, with consent rates for the high-speed service well below the national average.

    Townsville one of the five national trial sites selected a year ago has recorded a household and business consent rate of just 62 per cent for the connection of super-fast broadband fibres, below the national average of 75 per cent.

    This figure is not a commitment to buy but to have the wiring installed, meaning the ultimate purchase rate could be even lower."


    Oh dear it just gets worse and worse.
    • And those sign up rates will only get better and better when the NBN finally is deployed to second stage sites like Gungahlin in Canberra where the provision of ADSL services is limited.
  • advocate, I noticed you "FORGOT/OVERLOOKED" this little detail from the same article "In South Australia's test site, 91 per cent of homes and businesses have consented to the initial installation." And I believe that Armidale also has a good sign up rate too.

    Avid Gamer
    • @Avid Gamer

      I love the sign up rates that are always quoted for the so called FREE connection ( hey it's free why not!), you overlooked this little piece of detail from the article as well, for obvious reasons.

      "This figure is not a commitment to buy but to have the wiring installed, meaning the ultimate purchase rate could be even lower."

      The first active pilot that has been going the longest Tasmania proved that was the case, with low ISP NBN Plan sign up rates.

      Even Conroy acknowledges the NBNspin machine needs to up the RPM.

      "Despite launching more than seven months ago in three Tasmania towns at a cost of approximately $30 million, the NBN has yet to attract more than 600 of the 4000 eligible premises for the network"

      • I like this piece of spin from the article I linked to.

        " A factor in the low take-up rates in the first mainland site of Brunswick, Melbourne, was the lack of information in languages other than English, according to NBN Co."

        Oh so it was the language barrier was it, what happened to the 'high rental rate and we couldn't get to the landlords' story? what's next there are too many trams in Brunswick? LOL

          It's not a trick question, in fact it's not even a difficult question... it's so simple I'm sure even you can understand it (maybe)...well... yes or no?

          WHAT ARE YOU HIDING FROM...? I look forward to you again being stumped and typically going MIA...sigh!

          Back to your ridiculous FUD... who cares why Brunswick's take-up is low. NBNCo says language barriers were "A" factor. So what... are you being racist now? Not considering that others (like you...LOL) may not have a complete grasp of the language and may not be able to comprehend?

          For what ever the reasons, it is allegedly lower than elsewhere, it is admitted as being lower, I admit from the figures I see, it's lower than the projected percentage... cest la vie... get over it. You try to make mileage on a topic everyone agrees on...LOL!

          But since YOU wish to dwell on ONE area alone, be a good boy and look at the flip-side...

          So...AGAIN I reiterate, you supply no comment on the "75% nationally" (not in one selected area) eclipsing the 70% projected? No comment either, on the 91% take up in SA - "ALL PRESENTED BY YOU VIA YOUR URL"...LOL!

          These more than cover for the low Brunswick take-up... YOUR URL clearly shows this too... so thanks again for shooting yourself in the foot... gees it must look like Swiss cheese now...LOL!

          Anyway, for those who don't know, advocate here posts under the name alain at Delimiter (what do you call yourself at CW, as I have seen neither there...LOL).

          And both here and at Delimiter I asked him umpteen times to please simply explain two simple, yet completely contradictory comments of his.

          1. You betcha the NBN will be a success, that's how monopolies work
          2. The NBN will fail just like HFC

          Now I don't think it's too much to ask of one so opinionated, who wants to tell us all how it is, to explain how this can be...!

          But instead of actually fessing up that one was wrong, FUD, BS, lies or that he has since simply changed his mind (keeping in mind this is a deceitful person who posts baseless FUD at many forums under many different names) he said he would no longer correspond with me...LOL

          But it seems he was lying again as he certainly appears to be doing so, right here - whilst trying to vainly appear as though he isn't...OMG.

          And I thought those few TLS shareholders had problems...!
          • As predicted above alain/advocate...

            "WHAT ARE YOU HIDING FROM...? I look forward to you again being stumped and typically going MIA...sigh"!
  • Interesting article from the Courier mail (a subsidiary of you know who...LOL).

    You can tell the bias of any author from their first paragraph. "Qld has ALL BUT thumbed it's nose at the CONTROVERSIAL NBN..."

    62% is apparently "all but" for this "controversial build"...LOL.

    It is below the national average you say, alain (oops advocate, you're using one of your other names today)? Ok thanks for highlighting and admitting that the national average is in fact a whopping 75%...

    So as the government factored 70% as the required take-up rate, they are nationally (according to you and your supplied URL) already 5% ahead of their projections...pretty impressive I'm sure you'll agree (well they're your figures so you "have to agree", don't you?)!

    Oh and you forgot to, in the spirit of fair play...(ahem) mention this from your URL...

    "In South Australia's test site, 91 per cent of homes and businesses have consented to the initial installation".

    That 91% and the extra 5% nationally (thanks again for that) more than makes up for the small shortfall in Townsville and Brunswick...!

    Dear oh dear you one-eyed Lib muppet FUDsters, just get worse and worse.
  • @GBE Rs. This is not about politics.

    Not about politics? It has been about politics from the very beginning. Labor have staked their reputation on this new monopoly and are determined to do this no matter what it costs the taxpayer.
  • Psst, Mr. Impartial... you forgot to mention that the other side are determined to perform as much political bastardry of their own,"to slow and waste more and more tax" dollars to make the government look bad (yes oppose all you like but do it with at least some fairness and dignity) simply, for their own selfish political ideology.

    Please... both sides have their political motives... what we need to do is determine what is best for Australia and clearly imo, building the NBN is it!
  • Unfortunately, the statements made by Senator Conroy (as noted above), about me and about my propositions of late regarding NBNCo pricing are simply *wrong*.

    My intentions here are to improve the NBN access model for the benefit of consumers.

    It is unfortunate that he has compounded his completely false statements a week ago ( http://blog.internode.on.net/2011/04/04/correcting-the-record-on-internode-and-nbn-submissions/ ) with this further set of incorrect claims about my propositions.

    I would ask those who are interested in this topic, please, to take the time to read my rebuttal of this latest set of incorrect claims.

    I have written that rebuttal down here:


    Simon Hackett
    MD, Internode
  • How many ISP's has Conroy actually run? Zero
    How many ISP's has Simon run ? 1 and a successful one at that too.

    Nice to know that the NBN is being created by a clueless person
    • I know who I'd take my advise off.

      Surely it wouldn't hurt to investigate the constructive advise provided instead of completely ignoring it and doing what Conroy does best, talking ****.that's mightn't even be the path they end up taking but who knows, it may provide some insight on the what needs to be done.
    • err didn't type "that's" seems i used a few too many .'s??
  • For sure lachiex... when someone like Simon says (pun intended) it would be silly not to at least listen...!
  • I wonder if its a personal vendetta because Mark Newton has been very vocally against Conroys internet filter.
    IRC that Conroy tried to get Mark sacked as well.