back to article Cheaper broadband will slow NBN adoption, says Turnbull

Australia's Department of Communications has argued that higher broadband prices are necessary in order to protect the under-construction National Broadband Network (NBN). The Department, helmed by Communications minister Malcolm Turnbull, has written to the the Australian Competition and Consumer Commission (ACCC) as that …

  1. dan1980

    I really liked Malcolm Turnbull a whole lot more when he was in opposition.

    There are two things to note here. The first is that the NBN is not providing enough of an improvement to speed and capabilities, due to the downgrading of the original plan.

    The second is that it is amusing to see that the coalition doesn't actually seem to like it when their mantra comes true - that competition between private companies will provide better services, cheaper, than public-owned assets.

    It is really funny to see a Turnbull complain that the private sector is going to provide better solutions for consumers than the public sector and lobby to have it regulated!

    I'd laugh more but, whatever happens, we lose because it's our money paying for this second-rate solution in the first place so not only do we have to foot the bill for something that's sub-par, they want to penalise people for choosing another option!

    1. aberglas

      Give the NBN to people that actually want it

      What Turnbull is saying is that many people are happy with their existing broadband and do not want to pay more for something even if it is much faster, presumably because what they already have is enough.

      Yet there are many people that have no broadband at all and are screaming for service. So maybe it would be a good idea to focus on servicing them first.

      To try and argue that people would be happy to pay even more if the NBN was even faster (FTTH) is nonsense. Most (70%?) people just do not have any need for faster broadband than they already have. That was Labor's folly that Turnbull inherited.

      Turnbull is correct that politically, telling people that the government has spent a fortune providing them with something that they do not really want and will cost them more is not going to go down too well. But the solution is not to hike the price of Copper and give the money to Telstra!

      1. P. Lee

        Re: Give the NBN to people that actually want it

        >Turnbull is correct that politically, telling people that the government has spent a fortune providing them with something that they do not really want and will cost them more is not going to go down too well.

        If that was what's happening then I'd agree, but it isn't. There are large parts of Melbourne where you can't get fixed-line internet, its all rubbish wireless in dense suburbs with tin roofs. More internet is required and it makes no sense to add copper.

        Fibre prevents market segmentation (its all fast) which I presume is why Telstra is so against it. It allows Netflix rather than forcing Foxtel, which will be another black mark as far as Telstra is concerned. And it would require them to get off their backsides and actually do something. People could actually run their own servers rather than being forced to co-lo. Oh the Horror!

        It seems Turnbull is just spouting what's being whispered in his ear.

      2. dan1980

        Re: Give the NBN to people that actually want it

        "To try and argue that people would be happy to pay even more if the NBN was even faster (FTTH) is nonsense. Most people just do not have any need for faster broadband than they already have. That was Labor's folly that Turnbull inherited."

        A couple of points.

        First, some people would definitely pay more. Especially businesses who would love to get faster speeds that they are able to get currently but who are able to spend the money to have fibre installed directly. As an IT tech, I can assure you that there are companies out there from whom this would open up extra ways to do business and allow staff to work remotely - resulting in expansion into other locations.

        Conversely, I have seen at least one company that closed a regional office because the person they had there to try and build a base relocated to Sydney due to the frustration of not being able to access company resources reliably.

        Second, there is a false assumption - bordering on a straw-man argument - that the idea of the FTTP NBN was to be an efficient network that fills the needs that exist today. It wasn't - it was designed to be a network to cope with future needs. So the argument from people like Turnbull (and you) that people don't need more than is currently available is really an argument for not planning ahead when building essential infrastructure and only building what is necessary now.

        Under the Turnbull & Aberglas school of infrastructure, one could now enjoy the wonderful historical site of Old Sydney Harbour Bridge - completed in 1930, this stately bridge's design was chosen in line with the government's policy of 'just enough' and won out over competing proposals that were deemed to be overkill. The final design scaled back the original plans for a 49m deck to a more sensible 28m deck, reducing the cost by approximately 20% and cutting building time by two years.

        Why bother spending a bit more now for something that will last longer. Crazy idea.

        1. mathew42
          FAIL

          Re: Give the NBN to people that actually want it

          > Second, there is a false assumption - bordering on a straw-man argument - that the idea of the FTTP NBN was to be an efficient network that fills the needs that exist today.

          Labor came up with the NBN when Telstra refused to negotiate on building FTTN.

          > It wasn't - it was designed to be a network to cope with future needs.

          Each of Labor's NBNCo Corporate Plans had ~50% connected on fibre at 12Mbps out to end of the forecast period (2028).

          > So the argument from people like Turnbull (and you) that people don't need more than is currently available is really an argument for not planning ahead when building essential infrastructure and only building what is necessary now.

          The most recent connection figures are 38% on fibre opting for 12Mbps and further 38% opting for 25Mbps. People who require faster speeds have options: move to a FTTP area or FoD. The average house price in Australia is reported to be >$700,000. That means FoD install almost certainly less than 1% and if it is in demand add value like repainting the house or renovating the kitchen.

          1. bep

            Re: Give the NBN to people that actually want it

            You haven't quite picked up on the fact that you are still talking about right now, and he is talking about the future? I'd also suggest you try asking those people on slower connections if they wouldn't like a faster connection if it didn't cost them any extra. I don't think many of them would say 'no thanks'.

            1. mathew42
              FAIL

              Re: Give the NBN to people that actually want it

              > You haven't quite picked up on the fact that you are still talking about right now, and he is talking about the future?

              I specifically mentioned Labor's prediction that 50% would be connected at 12Mbps in 2028.

              i offered options for those who want faster speeds - move or fibre on demand. People move for other reasons like public transport or school zones, so moving for broadband is acceptable.

              > I'd also suggest you try asking those people on slower connections if they wouldn't like a faster connection if it didn't cost them any extra.

              The point is that Labor chose a pricing model for NBNCo which included speed tiers, so faster speeds do cost extra and 76% have opted for speeds achievable on HFC, FTTN & 4G.

              If you want to argue for an NBNCo without speed tiers then you have a defensible argument for FTTP.

              1. Jasonk

                Re: Give the NBN to people that actually want it

                Yes but Mathew the NBN under FTTP only need 20% on high their consuming data. While Turnbull has stated he needs at least 75% connected or his plan will cost $Billions more.

                Labor decision gives you a choice of upto 100Mbps whether you need it or not.

                Turnbull choice is you can pay more get get faster spends that a $41B dollar project can't deliver. Bit of a joke really. Plus the FOD which cost more to deliver than FTTP also has problem with congestion at the node. As the current design only delivers a 5Mbps on a full node. Quite funny really since our average is only 6Mbps. But then we where surprise to get a min 25Mbps and 90% where surprise to get a min of 50Mbps

                NBN could go the way of Google. $120 for 1Gbps + pay TV, $75 for 1Gbps only or $300 connection fee for a free 5Mbps for 7 years free (makes FOD a joke)

                1. mathew42
                  FAIL

                  Re: Give the NBN to people that actually want it

                  > Yes but Mathew the NBN under FTTP only need 20% on high their consuming data.

                  As pointed out previously, NBNCo plans are currently discounted versus actual costs. Significant increases particularly in CVC are required to break even.

                  > Labor decision gives you a choice of upto 100Mbps whether you need it or not.

                  Labor's play favoured the rich by building out a 1Gbps capable network that only the rich could afford to use, making everyone pay for infrastructure that only a few would use.

                  > NBN could go the way of Google. $120 for 1Gbps + pay TV, $75 for 1Gbps only or $300 connection fee for a free 5Mbps for 7 years free (makes FOD a joke)

                  I agree that asking Google to build the NBN could have been a much wiser decision, especially when according to Quigley 1Gbps were only announced just prior to the 2010 election in response to Google Fibre. However the reality is that 1Gbps plans will be higher than $1000/month which is the reason that zero ISPs are offering the plans, which have been available wholesale since December 2014.

                  To have 1Gbps prices around $120/month would require completely redesigning the NBN wholesale pricing model (most likely removing speed tiers). The most likely alternative is that FTTB through TPG and other providers will deliver faster speeds more cheaply.

                2. mathew42
                  FAIL

                  Re: Give the NBN to people that actually want it

                  > As the current design only delivers a 5Mbps on a full node.

                  Is all your knowledge on the NBN as accurate as this statement? I suggest reading The Register article 'nbn™ plans for future backhaul upgrade to FTTN cabinets'. In particular I suggest paying attention to this quote from nbn™ chief architect Tony Cross:

                  “In areas where the nbn™ Transit Network is available we could provide all the way up to 20Gbps backhaul for an FTTN cabinet if we chose to do so – but it’s highly unlikely that we will need that amount of backhaul capacity for an FTTN cabinet for quite some time. The reality is that we can quite easily upgrade our FTTN cabinet backhaul capacity whenever we need to do so by simply installing a new optical interface – there is no need whatsoever to run any new fibre."

                  Sadly too many people who have the technical knowledge to know better have been distracted by the shiney fibre and failed to understand what Labor was actually implementing.

                  1. Jasonk

                    Re: Give the NBN to people that actually want it

                    I guess you can't read either as I said the "current".

                    But backhaul doesn't help when NBN can't deliver faster speeds any faster than what they have now.

                    No need to run new fiber. So the ones where there connection drops to dialup speeds or even drops out should be fine. Like those poor people in the coast had not even a phone line for months due to flooded pits. Or the fact it costs an extra $1B to maintain the it. Now the SR even states by 2027 the cost of FTTP and MTM with be the same so really how much money does it need to keep running.

      3. Dagg Silver badge
        Mushroom

        Re: Give the NBN to people that actually want it

        >What Turnbull is saying is that many people are happy with their existing broadband and do not want to pay more for something even if it is much faster, presumably because what they already have is enough.

        BS I've got an old ancient inner city copper connection that is a flaky as all hell, every time it rains or we have an extreme weather event connectivity drops out and/or slows down.

        When it is running at full speed it usable (just), but full speed is a very rare event.

    2. Cpt Blue Bear

      I really can't see what Turbull's game is these days. I used to think it was to give Abbott and Co the rope to hang themselves with and then step in as leader before the election. The best theory we have now is that he's just wrecking the party in revenge for their stabbing him in the back twice. Maybe he also has an eye out for a directorship or two once he's done.

  2. This post has been deleted by its author

  3. RobHib
    Flame

    Fuck them.

    In Oz, we've already some of the highest internet access charges in the world, especially wireless because various greedy and incompetent governments fucked up the deregulation of Telstra--where we citizens have had to pay double, almost triple for everything: The unnecessary Optus network, a fucked NBN, and a buyback of the Telstra copper network for starters.

    Fuck them again!

  4. manitoublack

    I'd gladly join the NBN

    And so would everyone I know. However The NBN rollout speed is nothing short of a joke. My suburb, Hectorville, less than 7kms from the Adelaide CDB is not even on the list. And while the Foxtel cable is around, they tell me I'd have to get satellite thus can't use cable so stuck on ADSL. with no migration planed to VDSL or VDSL2.

    The old labour government had its problems, sure. But the NBN was to be it's legacy to the people. Pity petty politics have ruined it for the Australian people.

    Jordan Allen

    1. mathew42
      Happy

      Re: I'd gladly join the NBN

      > The old labour government had its problems, sure. But the NBN was to be it's legacy to the people.

      The NBN does sum up Labor's failures nicely:

      - Good idea (sound bite)

      - Poorly planned and implemented

      - Unintended consequences - only benefits the rich as poor cannot afford fast speeds

      - Over promised and under delivered (e.g. 1Gbps speeds, yet predicting <1% connecting at those speeds in 2028)

      - Under costed and over budgeted

      1. Jasonk

        Re: I'd gladly join the NBN

        consequences - only benefits the rich as poor cannot afford fast speeds

        Really?

        iiNet ADSL 300GB connection of an upto 24Mbps (average 4Mbps) $79.95

        iiNet NBN 250GB connection of upto 100Mbps $89.90

        But remember Turnbull said his would be more affordable but now doesn't look like it.

        1. mathew42
          FAIL

          Re: I'd gladly join the NBN

          > consequences - only benefits the rich as poor cannot afford fast speeds

          Firstly if you consider 100Mbps fast, then excellent as you will find HFC, FTTB and many FTTN connections to be acceptable. Secondly 76% of Australians have voted with their wallets that faster thatn 25Mbps is too expensive and faster than 100Mbps plans will be significantly more expensive again.

          If you read Labor's first NBNCo Corporate Plan they explained that 100Mbps symmetric was the minimum recommended speed for most applications. Personally my opinion is that the minimum speed to be considered a global leader is 1Gbps.

          1. Jasonk

            Re: I'd gladly join the NBN

            Let's see HFC which according to Telstra already delivers an up to 100Mbps so why do they need a "Free" upgrade to 3.1 when you bang on about FOD surely if they want faster than an upto 25Mbps service "insert your quote here".

            I don't mind FTTB as the copper is very short and not prone to weather. It's a good stop gap that labor should have adopted.

            FTTN now consider that report are saying upto 70% of the copper is not up to scratch and our national average before the NBN was only 4Mbps and Telstra own claim as to why they don't do naked DSL (they would have to register faults and there would be many) as many would not get it considering a fully laden node ATM supports 5Mbps or 20 premeses at 100Mbps if they can get it. So I would say many more like a few

            But then NBN is only now required to deliver a once a day 25Mbps for $41B 1Mbps faster than ADSL2. That show real great value for money right there doesn't it.

            1. mathew42
              FAIL

              Re: I'd gladly join the NBN

              > FTTN now consider that report are saying upto 70% of the copper is not up to scratch and our national average before the NBN was only 4Mbps

              What is the basis for this figure? The only meaningful public figures I've seen on ADSL network speeds were published by Internode & iiNet in 2008 in response to Labor's FTTN plans to demonstrate that close to 50% already had 12Mbps on their ADSL2+ networks. 12Mbps was the promised minimum speed of Labor's FTTN plan.

              As for Telstra comments on the state of the copper network you need to be aware that the cost of maintenance on the copper network is a big input into the ACCC determination on wholesale prices that Telstra can charge. Telstra's comments are slightly more trustworthy that Labor promising a budget surplus.

              1. Jasonk

                Re: I'd gladly join the NBN

                2003 5 minutes to midnight

                Lets the term Baghdad Network didn't come about for no reason.

                CEPU "Because of faulty pairs, ageing, water intrusion, changes and split-redeveloped blocks, redundancy in the cables is now much less than the original 'near 100 per cent.' It is now closer to zero." Now add to this the adds, moves, changes, and the repairs performed by contractors who have no ownership of the infrastructure and who have not updated records for over five years. The result is we have no redundancy and a 30-plus per cent error rate in the records for the last kilometre - the pillar to the home.""

                then there's The Gel debacle

                2004 the cross-party, Environment, Communications, Information Technology and the Arts References Committee "The Committee does not believe that Telstra has given sufficient weight to its role as the guardian of the CAN in the past - on which all other access is essentially dependent."

                An additional headache is that copper condition directly affects the promised minimum download speeds of 25Mb/s by 2016. For instance, in the UK, corrosion has seen average speeds drop from 53Mb/s to just 6Mb/s. Furthermore, to hit the promise of a minimum 50Mb/s for all Australians by 2019, following German upgrade paths, the copper would need to be remediated for FTTN and then remediated again to add the subsequent "Vectoring" speed boost. One commentator puts the latter cost at an additional $20bn. There's also no word on who would fix problems that occur with the copper within people's own premises.

                Remember we where suppose to get a MIN of 25mbps not 5Mbps in the current design rules.

                1. Jasonk

                  Re: I'd gladly join the NBN

                  And now the 200000 premises that where suppose to get FTTN trial has been cut back to 120000 which is going to take a year to complete atm FTTP is faster than that.

                  If you remember Turnbulls claim before the election there we would all have MIN 25Mbps by the end of 2016

  5. Anonymous Coward
    Anonymous Coward

    Why more expensive ????

    I'm intrigued as to why prices will be so high for NBN? Given that fibre networks are, on the whole, much more resilient and less prone to failure, they should be cheaper to maintain as a result. The price may initially be high for the early adopters, but I see no reason why we should be getting shafted long term as we are at the moment for broadband. We're already in the top half of the table in terms of pricing worldwide, and in the bottom half of the table for broadband speed, and have a government that is apparently obsessed with ensuring that the big end of town (Telstra) still gets the lions share of the money from those of us who work in an industry where we have to use high speed links. Having come from a country where I was paying a tenner a month for unlimited, all you can eat, super high speed ADSL and/or cable, I think Mr Turnbull needs to wake up and smell the coffee....

  6. rtb61

    The real message, NBN ain't did yet, so to put a bullet in it's head as per Rupert's orders we are going to raise prices to kill adoption and prove no one wants it.

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