Internode likely to change NBN prices

Internode managing director, Simon Hackett, has indicated today that the internet service provider (ISP) will likely revise its pricing for plans it offers over the National Broadband Network (NBN).

Hackett pointed out in a post on Whirlpool that the ISP's pricing released in July this year had been outed before the government had decided to change its connectivity virtual circuit (CVC) pricing changes. This had lead to Internode's NBN pricing being higher than those released by other carriers, such as iiNet, which was released today.

Hackett had long railed against the CVC charges, saying that when NBN Co moved from 14 points of interconnect (where the NBN Co's network meets carrier networks) to 122, it didn't adjust its CVC pricing down to account for the fact that the company would no longer be providing so much long distance backhaul to the ISPs. His arguments moved the government to waive the charges for ISPs servicing fewer than 30,000 premises per point of interconnect.

"This is a change I was really hoping NBN Co would make, but until they made it, it wasn't sensible to factor it into retail pricing. It has significant impacts on high quota plans, especially (as CVC is all about quota and the consumption of quota)."

After the change, Hackett said that he hadn't wanted to change Internode's prices before the other providers have released theirs yet.

"Starting a price battle with ourselves really wasn't a sensible step at that time," he said.

However, now that other retailers have released their pricing, it was "sane and reasonable" for Internode to consider adjustments to its own, according to Hackett.

"[In my honest opinion] the iiNet pricing today only makes sense in the light of that NBN Co wholesale CVC rebate being factored in. This signals that the market in general is probably going to head that way (and presumably we'll all hope that this non-permanent rebate gets replaced with something sufficient by the time it runs out in the future)," he said.

"Given that change in the shape of things via a) that substantial wholesale CVC rebate and b) that others are finally weighing in ... it's sane and reasonable for Internode to consider adjustments to our NBN retail pricing announcements to date, set up for the point at which commercial sign-ups become possible in general (around the start of October).

"So it's a pretty safe bet at this point that we're considering such changes."

He said it would be interesting to see the pricing of other players, such as Telstra BigPond. Hackett pointed out that the NBN market is small and mainly theoretical, at least until NBN Co opens the network for commercial sign-ups, which is slated for October.