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We never promised a uniform retail NBN price: Conroy

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.
Written by Suzanne Tindal, Contributor

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".

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