Opposition leader raises ‘your Internet will cost you more’ spook
NBN will be ‘three times the current price’: Tony Abbott
With opposition leader Tony Abbott declaring unchallenged that the NBN is going to “triple the costs” of access to broadband over the weekend, The Register decided to do some plan searching and come up with a comparison.
The quote that got us busy can be found here:
“Malcolm [Turnbull] is the Shadow Minister for Communications. He’s doing a really good job of exposing the fact that the National Broadband Network is a complete white elephant. He’s doing a very good job of promoting our real solution, which is national broadband that doesn’t involve digging up every street to deliver fibre to the home whether you want it, need it or can afford to pay three times the current price for it.”
While the coalition's larger point is that NBN Co's financial projections mean consumers will spend more on broadband in future, some of that future increase can be attributed to natural cost increases, while some derives from an assumption that households will consume extra services over the network. That leaves the "three times the current price" true, in a sense, but also a sound bite likely to give consumers the impression that NBN Co arriving on their street will put a dent in the family budget.
That latter impression is hard to sustain after looking at the 12 retailers currently offering NBN services (others have signed up but aren’t yet offering consumer services, or are only at the trial stage), and the 191 individual plans they collectively offer. Of those, eight also offer ADSL2+ services.
So it only takes a little time suffering boredom to come up with a comparison.
For this comparison, The Register used standard ADSL2+ services as the comparison to the NBN. For naked DSL services, the plan price was used; for other services, the basic Telstra HomeLine price – $22.95 – has to be added to the service price.
The results are in the table below.
It’s interesting, actually. Partisans on both sides will claim that the NBN fibre services are either (a) more expensive or (b) cheaper than copper. Actually, it’s a bit of a jumble, depending on whether you’re measuring the raw monthly price (the NBN wins hands-down) or the value on cost per GB of downloads.
At $29.95, the cheapest NBN plan available is $22.95 cheaper (43 percent) than the cheapest ADSL2+ plan including the line ($52.90). In fact, NBN plans are cheaper across the board, measured on monthly fee alone.
Data downloads are mixed: the NBN offers the cheapest GB of downloads and a lower overall average cost per GB, but the median NBN GB is more expensive, as is the most expensive.
In neither direction is there anything even remotely approaching “three times” as much. But had Mr Abbott’s advisors been awake and reading the news on Sunday morning, they’d have known this already, because this study was published in Fairfax.
“The survey, of users in one of the early sites at Brunswick in Victoria, found that “63 percent of households that had joined the NBN reported their internet bills had either stayed the same or decreased. About 26 per cent said their bills had increased somewhat”, the story states. ®
Re: My understanding of "White Elephant"
We can only hope he meets the same fate as Ahab.
Re: Long term implications
> I think what you like a lot of other people forget, is that wholesale is a natural monopoly. Just like when Telstra followed Optus down the streets when it came to HFC.
We don't forget that, but every signal is that NBNCo will morph into Telstra especially once it is privatised.
> It becomes less of a return on investment at this point, which is why there is only 1 copper network in Australia which is owned by Telstra, because to have every Telco run a copper network down every street (lets say iiNet, TPG, Telstra, and Optus all decide to run a copper network) they will all have to share a piece of the housing pie for the streets they go down.
Actually the problem is that if someone else attempted to build a rival network, Telstra would discount access to the copper network making the new network unprofitable. Have a look at the cost of fibre backhaul to exchanges where Telstra is the only provider or pricing of backhaul to Tassie prior to BassLink.
This principle is well known as far back as railway competition in the US.
> Please don't forget that, you CANNOT have more than one wholesale network, it is not cost feasible.
But you can separate that wholesale network into multiple geographically separated networks and have companies tender to run the networks. Much the same happens with public transport networks now.
@Esskay (Re: Long term implications)
Telstra used to be government owned, until the government of the day needed more money than it was raising in taxes. That this will in due course happen to the NBN is inevitable. That is why I don't like government monopolies.
Based on the rate at which homes are being passed, it will be many, many years before the infrastructure is fully paid for. In the meantime, current prices/caps will not improve.
As far as new uses for the internet are concerned, speed is only half the equation. As long as caps remain at current levels, watching even HDTV via the NBN on a regular basis will be prohibitively expensive. You can forget about seeing the introduction of 4K UHD TV via the NBN (and you certainly won't see it on free to air).
As implemented, FTTH will be great for people wanting sub 20 ms ping when playing Call of Duty, but it is arguable whether this constitutes a sufficiently popular use case to justify its advantages over FTTN, especially since FTTH does not preclude the subsequent introduction of FTTN, would cost a lot less, and would be completed much more quickly. I can only assume that's why so many more countries have chosen FTTN over FTTH. Certainly, if time and money were not issues, we would all rather have FTTH. However, time and money are always issues.