Broadband Has to Remain Expensive Because…NBN? Come on…

In terms of broadband Australia doesn’t fair too well, ranking somewhere around 58th in terms of speed whilst being among some of the most expensive, both in real dollar terms as well as in dollars per advertised megabit. The original FTTN NBN would’ve elevated us out of the Internet doldrums however the switch to the MTM solution has severely dampened any hopes we had of achieving that goal. However if you were to ask our current communications minister, the esteemed Malcolm Turnbull, what he thought about the current situation he’d refer you to a report that states we need to keep broadband costs high in order for the NBN to be feasible. Just like with most things that he and his department have said about the NBN this is completely incorrect and is nothing more than pandering to current incumbent telcos.

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The argument in the submission centers around the idea that if current broadband prices are too cheap then customers won’t be compelled to switch over to the new, obviously vastly more expensive, NBN. The submission makes note that even a 10% reduction in current broadband prices would cause this to happen, something which could occur if Telstra was forced to drop their wholesale prices. A quick look over the history of the NBN and broadband prices in Australia doesn’t seem to support the narrative they’re putting forward however, owing mostly to the problems they claim would come from a price drop already happening within Australia.

You see if you take into consideration current NBN plan pricing the discrepancies are already there, even when you go for the same download speeds. A quick look at iiNet’s pricing shows that your bog standard ADSL2+ connection with a decent amount of downloads will cost you about $50/month whereas the equivalent NBN plan runs about $75/month. Decreasing the ADSL2+ plan by 10%, a whopping $5, isn’t going to change much when there’s already a $25/month price differential between the two. Indeed if people only choose the cheaper option then we should’ve seen that in the adoption rates of the original NBN, correct?

However as the adoption rates have shown Australians are ready, willing and able to pay a premium for better Internet services and have been doing so for years with the original FTTP NBN. The fact of the matter is that whilst ADSL2+ may advertise NBN level speeds it almost always delivers far less than that with most customers only getting a fraction of the speeds they are promised. The FTTP NBN on the other hand delivers exactly the kind of speeds it advertises and thus the value proposition is much greater than its ADSL2+ equivalent. The MTM NBN won’t have this capability unfortunately due to its mixed use of FTTN technologies which simply can’t make the same promises about speed.

It’s things like this that do nothing to endear the Liberal party to the technical vote as it’s so easy to see through the thin veil of political posturing and rhetoric. The facts on this matter are clear, Australians want better broadband and they’re willing to pay for it. Having cheaper options aren’t going to affect this, instead they will provide the opportunity for those who are currently locked out of the broadband market to get into it. Then for those of us who have a need for faster Internet connections we’ll happily pay the premium knowing full well that we’ll get the speeds that are advertised rather than a fraction of them. The sooner the Liberal party wakes up and realises things like this the better, but I’m not holding out any hopes that they will.

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