We never promised a uniform retail NBN price: Conroy

We never promised a uniform retail NBN price: Conroy

Summary: The Office of Communications Minister Stephen Conroy has said that his office guaranteed uniform national wholesale pricing for the National Broadband Network, not uniform retail pricing.

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The Office of Communications Minister Stephen Conroy has said that his office guaranteed uniform national wholesale pricing for the National Broadband Network, not uniform retail pricing.

The statement has come in response to comments from Communications Minister Malcolm Turnbull on NBN pricing criticisms Internode managing director Simon Hackett made when the executive released Internode's commercial National Broadband Network (NBN) pricing.

Hackett said that uniform pricing across Australia was not possible, given the high number of points of interconnect, where the network connects to the networks of internet service providers.

Hackett maintained that the costs to reach distant points of interconnect would be higher than reaching those within a major capital city, which means it would cost more to service a regional customer.

"If the government can't deliver on a crucial promise made to the country independents after the election about national uniform pricing, then I would advise those independents to revisit their decision to support this government," Turnbull said.

According to Conroy's office, however, uniform retail pricing was never the government's intention.

"Through the NBN, the government has guaranteed uniform wholesale pricing across the country, not uniform retail pricing. Retail pricing is a matter for the market and retail service providers," it said.

Turnbull also said that Internode's prices showed that the NBN wouldn't be delivered at prices comparable to the cost of current ADSL2+ plans.

"We know that the price modelling conducted by the NBN is utterly wrong," he said.

He pointed out that the NBN Co business plan, released in December last year, had estimated that a basic 12Mbps downlink/1Mbps uplink plan on the NBN with a 50GB download limit would cost around $56 and compared this to Internode's price of $59.95 for 30GB. He also compared estimates of between $62 and $68 for a 25Mbps plan with 200GB to Internode's $89.95 pricing.

Turnbull said that previous assertions from the government that prices would be comparable to current day prices weren't correct, which he maintained undermined Communications Minister Stephen Conroy's credibility. However, NBN Co has previoiusly said that the business plan would need to be revised given the increase in the number of points of interconnect from 14 to 121 and the delay in the signing of the Telstra deal.

"These serious gaps in the NBN business model will prove costly to taxpayers and more importantly, to internet users who may not be able to afford the hikes," Turnbull said, repeating previous comments that the main barrier to internet was cost.

Conroy's office said that Internode's prices were "comparable to Internode’s own current prices." "Importantly, the NBN will provide a far faster and more consistent service," the office continued.

The prices listed by NBN Co in the corporate plan were only ever indicative, according to the office, but it also said that it believed that competition would heat up once other providers released their prices.

The Australian Communications Consumer Action Network agreed with Conroy's office that Internode's entry level prices were comparable to current offers, referring to a table it had created, but added that those who wanted faster speeds needed to pay.

(Credit: ACCAN)

"We're pleased to see that entry-level pricing for bundles is comparable but those who want super-fast speeds will pay more. At present, the speed and reliability of your internet service depends very much on where you live, how far your home is from the exchange, and how many people are connected to the exchange."

"Even in metropolitan areas, internet speeds can be very slow and there are few people in Australia who are currently getting speeds of Internode's entry-level plan available on the NBN. One of the objectives of building a NBN is that Australians everywhere will have access to reliable, fast broadband speeds."

Conroy's office said that it would be working on making sure that affordability was in front of mind for the new NBN environment.

The Competitive Carriers Coalition (CCC) also welcomed the pricing announcement, saying that it expected to see "compelling offerings" from other providers flow in the wake of the internet service provider's announcement, driving lower prices as competition ramps up.

The CCC appeared to ignore Hackett's concerns about pricing, saying that the announcement showed that the NBN was beginning to "have a positive impact on the CCC’s core concerns around the promotion of competition in the local telecommunications market, and in rectifying the flawed structure of our sector".

Topics: Broadband, Government, Government AU, Telcos, NBN

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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Talkback

19 comments
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  • As I just posted elsewhere on this site, complaining about having to pay somewhat above the current average to get dramatically better speeds is a bit like complaining that you have to pay more than the average to get a 55" or larger brand new HD TV.

    Well, duh.

    But quite a few people ARE willing to pay more for a super-sized TV, just like quite a few will pay more to get 100/40 speeds. You can still get a pretty decent 32" or 40" for much less - depending on your needs and willingness to pay more to get more.

    And it will surely come as a surprise to no one to find that prices come down over time.
    Gwyntaglaw
  • Wow, Internode is **** about having to charge 5c more for a similar bandwidth, for superior technology. We should all run to the ACCC and complain!!

    As Gwyntaglaw says here (and elsewhere), the pricing is set up so that people can pick and choose their plan. Internode and Turnbull are laying it on thick that its 'more expensive', when by their own advertised plans the costs are the same.

    I now wonder what Internode's agenda is. I know Turnbulls, but Internode is complaining about 5c for christs sake. You want what you currently have, by Internodes own figures you're pretty much going to be paying the same. You want the better connection FTTP offers, of course you're going to pay for it.

    Be real, what part of this has caused people to expect a free leg up by an order of magnitude over what they currently have?
    Gav70
    • One structural issue that does make it harder to compare prices between the NBN and existing ADSL offerings, is that the NBN pricing literally adds an extra dimension to the matrix - that of peak speed.

      No ADSL plan can do this. Have you ever seen a plan which advertises 12Mbps for $60, but a max 24 Mbps for $80+? You can't offer graduated pricing based on speed, because no provider can guarantee that you'll even get 1Mbps! (And for a time, I myself truly couldn't!)

      So this is truly a new dimension in pricing. And this means that you can't do apples-to-apples comparisons.
      Gwyntaglaw
      • I reckon Turnbulls NBN building FTTN can offer a guaranteed 12Mbps... if lets say 20% of people can get 50-100Mbps, 20% around 30-50Mbp, and the remainder 60% get 12-30Mbps...based on copper length to the Node, then this is pretty decent.

        Better still since it costs less to build, it should be charged at a lower cost, so lets say we reduce the cost of todays broadband say $10-$20 pm. Of course it will provide a better quality service, greater bandwidth and larger quotas, because it doesnt have to factor in everyone downloading at 100Mbps in peak times, and not causing congestion, because say only 20% will get that speed, ie, short copper length.

        If donee well, and given that FTTN is much simpler to roll out and less risky, it can be built very quickly and at low cost, whcih should be passed onto the consumer.
        ADFSAFSAF
        • "then this is pretty decent."

          False. It's actually quite crappy for 80% of the population and that's before you take into consideration uploads speed will still be woefully inadequate with this patchwork plan. It also doesn't address future speed requirements.



          "Better still since it costs less to build, it should be charged at a lower cost"

          Except it wont, you'll just be paying the same price for an inferior service.



          "FTTN is much simpler to roll out and less risky"

          False. It is riskier due to to the fact that it will instantly become redundant. It is a waste of taxpayers money.




          "it can be built very quickly and at low cost"

          Before or after you pay Telstra?




          "whcih should be passed onto the consumer."

          Not building anything and sticking with ADSL2+ is even cheaper. Why dont we just do that?
          Hubert Cumberdale
        • ADFSAFSAF's argument assumes FTTN is cheaper. But he must factor in the $15-20 billion compensation to Telstra to cut their copper lines to homes, and the cost of building electrified cabinets in every suburban block to get the advertised speeds from copper. Because Telstra owns the copper to homes, FTTN costs more than FTTP. Because FTTP is infinitely superior, NBNCo is building FTTP, but it also costs less and does not hand the whole network back to Telstra like Malcolm Turnbull's back to the future anti-competitive proposal.
          umbria
  • Well, that took less than 24 hours for competition to emerge (surprise, surprise).

    Dodo has just announced an entry level NBN price of below $40 per month (for 12/1 Mbps).

    So... this whole exercise in chest-beating over $60 entry level charges has been complete tosh. What's that - FUD being used to try to nobble the NBN? Never heard of such a thing! :)
    Gwyntaglaw
  • The News Ltd propaganda machine and other publications are already out in force... "NBN price shock" blah blah. These plans are just ONE provider (Dodo just came out with much cheaper prices already) and one that is trying to prove a point on NBNco pricing. Even then when you compare the cost of the phone line rental ADDED to the cost of the ADSL plan and compare a virtually speed guaranteed FTTH service at these prices to a russian roulette like ADSL service it is STILL a no brainer.

    Yet the FUD Turnbull machine is out painting the town red proclaiming these prices are not competitive...and unfortunately enough people will buy that crap

    When you compare many ADSL plans (especially the tens of thousands, myself included, who are stuck on ADSL1 paying
    djz-25775
    • "The News Ltd propaganda machine and other publications are already out in force."

      Yep you are right about that djz, I just saw a reporter on that crappy 7pm show talking about the plans, he said something along the lines of "if you want to get the full benefit of the NBN then you have to pay $190" completely ignoring the fact that there is a $99 100/40mbps plan. I'm certainly not saying this 30gb plan is value for money but it would be good if these reporters did a bit of research before presenting their knee-jerk reactions. To be fair he did mention that Internode is just one ISP but I doubt they'll be reporting anything when an ISP comes up with cheaper plans.
      Hubert Cumberdale
  • The iiNet NBN plans for Tasmanina was

    http://www.zdnet.com.au/iinet-confirms-nbn-pricing-339303556.htm

    to be honest, give me TPG unlimited, I get for $60pm, line rental included in that price...
    18Mbps syncing ADSL2+
    Unlimited download....

    WIN.

    ... do I want fibre? hm lets see, $60p/m 12mpbs, 30Gigs... are you serious?
    ADFSAFSAF
    • "18Mbps syncing ADSL2+"

      I am overwhelmingly thrilled for you. We'll just halt the roll-out right now because your connection speed is above average. To hell with everyone else that is not in your situation.

      What a self-centered, ignorant being you are.
      Quark-f7545
      • Yours will be among the last premises upgraded to fibre, ADSFSAFSAF (hope I spelled your Christian name correctly on my QWERTY keyboard).

        Only 1/16 of premises in a 4 km radius of an exchange actually get speeds of 12 Mbps from copper, which is why the NBN is being built to service 100% of Australians. By the time it reaches you around 2018 you will be happy to upgrade your ADSL to fibre. Regional Australia will just be grateful to finally get broadband at any speed, so it might as well be the best from day one, since it is also the cheapest solution over the decade-long build period.
        umbria
  • They say NBN pricing starts at $50 to 200 dollars per month, too expensive for mum dad and the kids with a mortgage and not needed for granddad and grandma. The rest of you will end up paying double. Wait for the inevitable pay for the past the front door use or not pricing.
    GBE-71384
    • You know that Dodo has just announced that their entry-level NBN product will be priced below $40? Just like the current market, the NBN will produce a spread of offerings from the budget to the premium end.

      I have no idea what you are talking about with your "inevitable pay for the past the front door use or not pricing" statement. If you're saying that people will be charged for a basic connection when their copper is replaced with fibre within the fibre footprint, well then that's just a false and baseless assertion.
      Gwyntaglaw
    • GBE, for 80% of households the phone and internet bill is cheaper with a quality provider like Internode offering a $60 all-inclusive phone and internet bundle guaranteeing 12 Mbps speeds (fibre burst speeds are higher, by the way, but you always get the full speed unlike copper ADSL/FTTN).

      The average ADSL account Australia-wide today buys a 50GB data allowance of which only 7 GB is consumed.

      Those who use more can buy a higher plan, but NBNCo expects 50% of homes to still be on the entry level plan in 2020, and almost all phone calls will by then be free, since they are no longer made to copper-based numbers with a last-mile connection cost. And the day one data costs will come down over time, because they always do. (This last assertion will withstand any scrutiny you care to apply to it, by the way.)

      Everyone will be better off accepting the free fibre when offered, but they have a legal right to stupidly exclude themselves and pay for an install later if they wish.
      umbria
  • $60 per months will be inflated due to Internodes high cost base. Dodo have already flagged a sub $40 entry level plan including telephone.

    Not that I would use Dodo but competition in the market will drive pricing and companies that have lower overheads and profit margins will have better pricing as they do now.
    fredyfinn
  • The NBN was also forced to increse the number of points of interconnect to make the backhaul industry more "competitive"

    Telstra must be laughing. They leased the NBN it's black fiber, and now the NBN can't use it, and Telstra gets to charge to deliver data to the outback.
    Paul Krueger
  • i spent 3 solid years back in 1999-2002 lobbying for better regional telecoms services, and met with Alston, Smith, Lundy, and Tanner several times, to expose hundreds of millions of $ in wasted public money on NTN projects which was eventually raised in parliament but by then the money was all gone and NTN was wound down ..i also participated in the Besley Enquiry in 2001 and submitted that 100Mb be the minimal standard for ubiquitous coverage and i remember Alston actually laughing at my suggestion in that Grafton meeting in 2001!

    However the real truth is that the Australian Telecommunicions portfolio has been poorly managed (huge understatement) by both labour and coalition gov'ts for more than 15 years now and by the looks of the emerging detail of the NBN continues to be so.. What a wasted opportunity this country has had to be a world leader. shame on all of you.
    invisbileink
  • Well a few points

    dodo pricing is for a heavily 'contended' service. The wholeseale NBN rates require to spend $20 per mbps of bandwidth that you want. If you have a 100 customers at $40.00 per month on the 12/1 plan, then you'd to spend about 12*20*100 or $24,000 per month just for bandwidth alone. Considering these customers are paying $40 per month your gross revenue is only $4,000. Really you need to be supply 1mbps for every 100 customers you had (which would bring your costs down to $2,000).

    The above doesn't even get into port costs or the other expenses.

    Now that said I don't believe its doom and gloom for the telco industry. Most senior managers/execs make very very good money in the business and the pricing definitely allows for a return to support the lavish pay packets of the echelon who run this crooked scam.

    However its evident that you couldn't sell anything but a highly contended service for anything less then $60 (12/1mbps) with a modest download limit.

    I continue to argue though that NBN pricing should be based purely on inter-capital transmission and not intra-VRF traffic (usage within the POA/POP). Australia could be stimulating internal traffic consumption and actually making the NBN a useful service for locals.

    Imagine I oculd setup a video decoding business. Clients in my local area could upload/download their material into my systems (vs versa) and I could add my value and send it back to them free of hitting their download limits (and mine too).

    Just imagine local hospitals hooked up to each other, moving HD video of surgeries back and forth only to find that they've exhausted their 1TB download limit.

    Fair enough if the traffic passed the international interconnects i.e. Southern Cross, Pipe-Networks Guam cable, but within Australia, within that state we should be in a wonderland of free data usage.
    chugs1