Shadow Communications Minister Malcolm Turnbull has claimed that early pricing released by Internode yesterday for services on the National Broadband Network demonstrates consumer prices under the NBN will be higher than those currently levied for access to current broadband services.
Internode will only offer so-called ‘bundled’ plans which come with a telephone connection and prices starting at $59.95 a month and ranging up to $189.95. It is difficult to directly compare Internode’s current ADSL broadband plans with the NBN fibre-based plans, due to the different speed tiers which are offered. However, at the 25Mbps tier, which offers similar speeds to the equivalent ADSL plans (but dramatically better latency, and expected better reliability), the prices are relatively comparable.
However, in a statement published yesterday on his site, Turnbull stated Internode’s pricing revelation had undercut the argument for the NBN and the credibility of Communications Minister Stephen Conroy.
Turnbull cited two examples which, he said, demonstrated that price modelling conducted by NBN Co was “utterly wrong”. In the first, he said NBN Co had estimated a 12Mbps plan would cost between $53 and $58 a month with a 50GB quota. In comparison, Internode is offering a 12Mbps plan for $59.95 with a 30GB quota.
Secondly, Turnbull said NBN Co had estimated that a 25Mbps plan would cost between $62 and $68 with a 200GB quota. However, Internode yesterday put forth a 25Mbps plan which would cost $89.95 with a 200GB quota — which Turnbull said was “32 percent higher than the high end of the NBN’s scale”.
“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,” the Liberal MP said. “As I have said repeatedly, the main barrier to the internet is not distance but cost. The biggest disparity between those who access the internet and those who don’t is their level of income.”
Hackett also yesterday published an extensive blog post detailing his ongoing criticisms of the NBN’s pricing model. The executive chiefly objects to the number of points of interconnect through which ISPs will be able to connect to the NBN fibre infrastructure, as well as the underlying cost of providing bandwidth to end users.
“Mr Hackett makes some sensible suggestions as to how the NBN can prevent wiping out smaller retailers,” said Turnbull “”That he has had to do so publicly on a website shows Senator Stephen Conroy has not bothered to listen to the industry about their concerns. After looking at these prices, Prime Minister Gillard and Stephen Conroy must now tell all Australians how this colossal project – conducted without the most basic cost-benefit analysis – will benefit them.”
Conroy told ABC Radio’s AM program this morning that the Government was also disappointed with the points of interconnect decision, which was made by the national competition regulator, but exhorted observers to remain patient on the pricing issue.
“There are many companies yet to put their pricing in and we expect to see robust competition taking place which will see consumers better off because of NBN as pricing becomes more and more competitive,” he said.
Image credit: Office of Malcolm Turnbull