news Communications Minister Stephen Conroy has stepped in to bat for iiNet, in the wake of claims by the Coalition yesterday that National Broadband Network pricing released yesterday by the ISP was too expensive and demonstrated that Labor’s NBN project wouldn’t bring Australians cheaper broadband.
iiNet’s plans released this morning range from $59.90 per month for an entry level service with a bundled telephone line, all the way up to $109.90 for a terabyte package at 100Mbps speeds. In general, the plans are comparable to iiNet’s current ADSL broadband plans provided over Telstra’s copper network. However, they are substantially cheaper than earlier plans released by rival Internode in late July — in some cases up to $80 cheaper for a similar plan.
Fletcher said he had calculated that iiNet’s NBN prices were substantially higher than equivalent ADSL prices. The MP said it wasn’t iiNet’s fault — due to pricing set by fibre wholesaler NBN Co — however, the prices demonstrated Labor claims that the NBN would drive cheaper prices was false.
However, in a statement issued late last night, Conroy claimed Fletcher was barking up the wrong tree and was continuing to attack ISPs. Fletcher had previously made a number of comments about the prices of other ISPs Dodo and Exetel.
“Mr Fletcher is continuing his extraordinary attack on retail service providers – having already attacked Dodo and Exetel – for providing consumers with low, competitive prices and is deliberately attempting to mislead people with calculations that simply do not stack up,” said Conroy.
The Minister said Fletcher’s price comparison saw the Liberal MP comparing the prices of broadband services only available in metropolitan areas (naked DSL) with iiNet’s new NBN services — which are also slated to be available in regional areas. “If Mr Fletcher had done the honest thing and chosen iiNet’s $59.95 plan – one that is still cheaper than the “entry level” naked DSL product he cites – he would have found a product that is $10 per month cheaper, more reliable, and with two times more included data,” said Conroy.
Fletcher was comparing iiNet’s $69.95 naked DSL plan, which comes with 50GB of on-peak and 50GB of off-peak data, while the ISP does offer several non-naked DSL plans which come with 100GB/100GB, 200GB/200GB and even 500GB/500GB of quota.
“Using Mr Fletcher’s own novel and bizarre calculations, this plan would cost only $0.30 per GB,” said Conroy. “Mr Fletcher is amateurishly copying the dishonest tactics of Tony Abbott and Malcolm Turnbull who will say and do anything in an attempt to mislead the Australian public.”
Posting on broadband forum Whirlpool, iiNet regulatory chief Steve Dalby wrote in June 2010 when iiNet first released its initial trial NBN pricing that the National Broadband Network policy was actually about a variety of complex outcomes — not just the cost of broadband. “There was nothing in any of the Minister’s releases about making anything cheaper,” he said at the time. “Just the opposite, most of the debate (Google, [former AAPT chief] Paul Broad and the NBN) was about how it was apparently going to make things more expensive.”
“The NBN is about a lot of things including improving competition, reducing Telstra’s conflicts of interest, broadening the availability of high speed broadband to 90 percent of the population, generating productivity gains and winning votes.”
Asked whether improving competition was about making prices cheaper, Dalby responded: “That is an outcome, yes and one of the reasons the government wants improved competition. But not the only one, and that has never been the driving motivation for NBN. On a like-for-like basis the NBN may very well drive down prices, let’s see.”
opinion/analysis
AS Dalby wrote, the NBN is a complex policy aimed at achieving many outcomes — and I don’t personally believe lower prices has ever been an aim of the NBN, despite what Julia Gillard may or may not have said in parliament. Broadly, the policy aims to improve competition in the broadband market while simultaneously drastically improving services — not to provide cheaper services.
I’ve expressed my opinion to several of the Coalition’s key MPs (including Fletcher) that I believe it is barking up the wrong tree by harping on about prices. I just don’t believe Australia’s predominantly middle class population is that concerned about telecommunications prices. If it was … we wouldn’t have more mobile phones than we have people, and we wouldn’t have multiple Internet connections per person (think iPad, iPhone, mobile broadband dongle, home broadband, work broadband and so on).
The Coalition is wasting its time by continuing to attack the Government on the sideline issue of broadband pricing.
Note: This article initially cited Steve Dalby’s comments as being made yesterday. This is an error. They were in fact made in June 2010. In addition, Conroy initially referred to an iiNet plan with ten times the data quote included; his spokesperson has corrected this as a mistake — he meant two times the quota.
Image credit: Razvan Cimpeanu, royalty free
“iiNet regulatory chief Steve Dalby wrote yesterday”
Since when is 2nd June yesterday
June 2010, in fact.
Why yes, you are correct. I had thought that thread was for the new NBN plans — but it appears it was started last year when the trial pricing was released. My apologies — I will correct the article.
The comments still hold true, it’s just the ‘yesterday’ reference.
“The Minister said Fletcher’s price comparison saw the Liberal MP comparing the prices of broadband services only available in metropolitan areas (naked DSL) with iiNet’s new NBN services — which are also slated to be available in regional areas.”
Isn’t the NBN supposed to be the same price everywhere? If this is the case, Fletcher’s comparing apples to apples.
Only if you’re a metropolitan resident! If you live in a regional area, the difference is stark. And since the “apple” is not just an apple, you can’t really say it IS comparing like with like.
It’s a bit like saying “land costs in Australia are reasonable!*
(*only taking rural areas into account)
I don’t see why regional residents should be entitled to metropolitan pricing or speeds. That’s the sacrifice you make for cheaper housing, lower living expenses and less commuting.
And you decide this, do you? What else are folks in regional areas not entitled to? Clean water? Driveable roads? Hospitals? Being patronised?
I think the suggestion that regional dwellers are “entitled” to anything misses the point. The point is that many people in regional areas simply don’t have the option to get anything better, whether you pay more or not.
Db, I tend to agree, I chose to live in a regional area for what it offers, I don’t want to sit in traffic for an hour to get to work, or cram into public transport, and for that I don’t expect to have the range/quality of services provided in the metro areas. If regional towns had all the privledges of metro areas, without negatives, then they wouldn’t remain regional for too long.
I think the point should also extend to remote/rural areas, I don’t think it is reasonable to live 10km from your closest neighbour, and expect metro or regional internet speeds and prices.
>>Isn’t the NBN supposed to be the same price everywhere?
The wholesale prices dare required to be the same everywhere, not retail.
That said, our plans are uniform, across the country, but NBN is still only available in regional areas. So comparing something that is (currently) only available in the country with something (Naked DSL) that a is only available in the metro areas is a bit pointless.
Politicians of course, aren’t required to make sense. They are required to make statements.
“Politicians of course, aren’t required to make sense. They are required to make statements.”
lol. Quote of the month :)
*yawn* Politics.
This is all getting a little old now. Lets just get on with building this thing for the future. PLEASE.
Conroy is right, and feel he did a good job of countering Fletcher’s claims here.
Here is some further reading:
http://i.imgur.com/DUdTV.png
Internode released commercial prices, iinet released residential prices. Renai, why did you not point this out?
No, they both released residential pricing, and iiNet additionally released business pricing. The term “commercial pricing” refers to the fact that ISPs will soon be concluding the trial pricing that they have been offering during the early stage rollout of the NBN and will soon be charging market prices.
Guys, guys, you are missing the facts. Here is a comparison of iiNet’s NBN plans (which include Netphone 2) with their Broadband2+ ADSL plans plus NetPhone 2.
– The 100GB/100GB NBN @ 12 Mbit/s plan costs only 5c more than the equivalent ADSL2+ plan which delivers up to 20Mbit/s.
– The 100GB/100GB NBN @ 25 Mbit/s plan costs $4.95 more than the equivalent ADSL2+ plan – $5 more for 5+ Mbit/s more
– The 500GB/500GB NBN @ 25 Mbit/s plan costs $14.95 less than theequivalent ADSL2+ plan at only 20 Mbit/s max.
– The 500GB/500GB 12Mbit/s plan costs $5 less than that.
– The 500GB/500GB NBN @ 100 Mbit/s plan costs only 5c more than the equivalent ADSL2+ plan which only delivers 20 Mbit/s max.
– The 20GB/20GB NBN plans have no equivalent ADSL2+ plan to compare it with. The 12 Mbit/s plan costs $10 more than the ADSL 10GB/10GB plan with NetPhone2, but comes with 10GB/10GB extra a month.
There are some differences however, including:
– the ADSL2+ plans sgive you up to 20 Mbit/s which is distance dependent, whereas the NBN fibre plan give you 12 Mbit/s to 100Mbit/s maximum, which is independent of distance
– The ADSL2+ plans require you to sign up to their phone plan (at least $29.95 per month), otherwise you get less download quota, whereas the NBN plans do not.
– The ADSL2+ plans require you to pay a $79 joining fee and purchase a modem, whereas the NBN plans have no connection fee at present.
– The off-peak time on the 500GB/500GB plan is less generous than the equivalent ADSL 2+ plan – 2-8am vs. 1-9am.
The issue is particularly with the entry level prices. They can throw as much speed as they like, but for most of the population they just want to check their email and visit facebook for as cheap as they can. People with lower wages are less likely to have internet [http://nbnoptions.org/Research.aspx]
Seems you also left the 2 lowest brackets out of that graph, nil or negative had 57% with internet connections and 1 – 149 had 45%. But its best you leave those ones out otherwise it might make the graph seems stupid.
“SOURCE: Australian Burea of Statisctics… – Patters of internet access in Australia, 2006”
Also, you may want to base that on something a bit more current. 5 years is an eternity in internet time.
People don’t live on $0 and negative income. Newstart is currently $486.80 for a single person. I excluded those lower categories because they appeared to be more affluent people with negative gearing. When omitted, the graph reads, people with more money are more likely to have internet. Rather than keep all the other information in, and explaining to the lowest common denominator, I felt there would be more efficient to just leave it out and answer criticisms from people such as you independently (of which you are the first) – BTW, feel free to write this criticism on the website so all visitors can see.
The most recent Sensis survey was only recently collected. I will wait for a newer report to be released.
I have a feeling that Conroy meant twice as much, not ten times as much.
It wouldn’t be the first time he has fumbled, not too bright, and undeserving of the portfolio too imo.
On the other hand, Fletcher intentionally misrepresents the figures, stating black is white and thinking/hoping the general public won’t notice.
And half of the news lets him get away with it, instead of pulling him up for being a liar, in the true sense that he is intentionally trying to deceive.
Conroy was comparing these two;
Home 1 – 10G+10G $60
vs
NBN 12Mbps 1 – 100G+100G $60
http://i.imgur.com/DUdTV.png
I guess my point is, why is his behaviour/remarks not being scrutinised? He is treating the public like idiots, the media should be tearing him to pieces.
Both he and Turnbull just make up crap, dodge from one issue to another when they are proven wrong, and they aren’t pulled up on it, they are not worth air time on this issue.
We don’t consider the testimony of known perjurers as worth anything, why consider theirs? They are both lying opportunists first and foremost.
I do tear the Coalition holes when it’s warranted … for example:
http://delimiter.com.au/2011/05/17/in-defence-of-an-honourable-man/
However, in this case I thought it worth letting Fletcher have his say. I knew that you guys would tear him a new one in the comments anyway, but he does have a background in telco and knows enough to debate Conroy on the issue.
“The Coalition is wasting its time by continuing to attack the Government on the sideline issue of broadband pricing.”
Well it depends, one persons sideline issue is another persons major issue, the assumption being that most people spend their time analyzing the pro and cons of NBN pricing in discussions like this in Delimiter.
It will not be a waste of time if the Coalition keep niggling away at the pricing, all they have to do is make a few points stick, create the impression that the NBN is a Rolls Royce solution that the majority of the population don’t need (that won’t be hard) and bingo they are running the country post 2013.
It should be a waste of time, as it is proven time and time again that the prices in general are cheaper.
But you don’t care, you will keep believing whatever you like even though the facts don’t support your beliefs…or you will find a few tiny examples of someone being “worse off” as justification, completely ignoring the thousands/millions that will be much better off.
Create the impression? So reality and facts dont matter after all, what the population actually need is not important either. What is important however is that Mr Rabbitt gets to be prime minister and stops the NBN because he knows better apparently and we are suppose to believe him…
Exactly, thanks for pointing out that the coalition clowns dont care about facts all they have to do is make enough noise like a crybaby, but hey it doesn’t matter if they contradict themselves on a regular basis they’ll find someone dumb enough to believe their excuses. I hear most of them post comments on The Australian.
Spot on. The wholesale prices are higher, the entry level prices are higher, and NBNCo have even promised wholesale price INCREASES in a few years (after they have captured their prey….)
Individuals do have their opinion, however the facts tell us that cost does matter: [http://nbnoptions.org/Research]
$34.50 for entry level exetel NBN internet doesnt seem very steep at all. Dont know where you are pulling the higher entry level prices from.
Tell the full story Mike, 12 month contract, $100 installation fee and a strong recommendation for a router supporting firewall, WAN connection and NAT capability at $85.
Sorry, yes, its on a 12 month contract. I’m not entirely sure how this has any bearing on what I said. Also a strong recommendation is still a recommendation.
I’m assuming you can renew this contract at the same price. So 24 months worth of this connection is $1013. This includes the installation and the “Strongly recommended” extra.
I base this on the following:
1 Minimum Total Cost for NBN Fibre plans over 12 months contract period = Installation Charge + (12 Months x Monthly Access Charge). – Fine print of the Exetel page.
$514 – Minimum cost for 12 months with this plan. This $514 counts installation. So for the second 12 months, it will only cost $414, as it’s already installed.
I’ll now post a 24month minimum cost for the bottom of the barrel bigpond adsl plan. Brace yourself.
1. Minimum cost for BigPond Elite Liberty (5GB) plan is $1,509.60
To be fair, that bigpond includes a phone line. so add 9.95 per month to the exetel plan. over 24 months thats rougly $240. still $250-$260 cheaper than a current (more inferior) entry level product.
Have a told the full story now?
Still looks cheaper to me.
I noticed you picked BigPond one of the most expensive ISP’s for your comparison, any reason for that other than trying your hardest to make the disparity look really bad?
From a quick look around, the basic plan of iinet for ADSL is virtually the same as this exetel NBN plan. Exetels basic ADSL is about the same again (I believe this exetel NBN plan is maybe $20 cheaper?). Optus is in about the same boat as telstra, but optus has a much more generous data quota.
(I couldn’t find the total cost of the lowest internode plan in the 2 mins i was searching)
I’m simply refuting what Todd said above, that entry level NBN plans are higher. Which they aren’t. Granted some are, but if someone is really trying to save every dollar possible, they should shop around and reach the conclusion that exetel is a good option for them.
Yes but customers are not going to base their sole selection criteria on who has the cheapest NBN plans, their selection criteria will be the same as it is today, otherwise BigPond and Optus would have zero BB customers and the likes of Dodo and TPG would be the two biggest ISP’s in Australia.
The initial NBN plan pricing discussion at the moment is just a somewhat interesting sideline to the main show yet to come, the main show of course being Telstra shutting down copper based exchange areas and BigPond and Optus migrating their substantial customers bases including HFC BB onto the NBN, and they hope 100% onto their own NBN plans.
It’s better to compare apples with apples – The entry level on the iiNet website for ADSL2+ is $39.95 [http://www.iinet.net.au/broadband/plans.html]. The new entry level on NBN of $49.95 is $10 more, a 25% increase. The entry level (regardless of download volume) is very important. If people want to improve their home budgets they should be able to reduce their broadband spending – ie. download less illegal movies in return for a monthly saving for things like food and shelter.
RE: Exetel, I use them at home for ADSL2+, and I have been following John’s blog for some time. John is very much against the NBN2, but is of course in business and still keeps his options open – he can’t bet his business on the coalition winning the next election. On the price being lower with Exetel, I think this is the only exception – they are very innovative at Exetel. Note that iinet have their own DSLAMS and exetel resell Optus and AAPT services. Perhaps the NBN wholesale costs are cheaper for resellers, given that wholesalers add a little fat to their charges.
If you want to compare Apple’s with Apple’s you might want to note that the Entry Level ADSL2+ plan you refer to requires you to have a home phone line whereas the NBN plan does not, further we do not know how much line rental for a proper product (i.e. inclusive of emergancy calls) will cost on the NBN yet.
Also I’ll add in this tidbit. BigPond Elite® 5GB Liberty $29.95 over 24 months. Then in the fine print: 1. Minimum cost for BigPond Elite Liberty (5GB) plan is $1,509.60.
Now iinets plans. 12/1 NBN 20g + 20g $49.95 over 24 months. Then in the fine print: Minimum total cost over a 24 month contract on the NBN-1 plan (20GB + 20GB) + standard turbo pack (12/1 Mbps) is $1198.80.
seems to me like even though the monthly access is higher, the overall cost is actually $300 cheaper than bigponds minimum of minimum plans.
Sorry for the double post.
Promised higher prices? Bullshit. Their business plan actually says the opposite, they plan to bring CVC wholesale costs down over time. I’ve see no “promise” made.
http://www.smh.com.au/technology/technology-news/nbn-push-for-rise-in-key-rates-flies-in-face-of-reduction-pledge-20110822-1j6ur.html
“raise prices by up to 5 per cent more than inflation for high-speed services once the network was complete early next decade”
NightKhaos, the prices will be kept artificially low to get as many customers on board as possible. Furthermore, the entry level price will not be immune after 5 years: “The cheapest broadband services would not be affected by the proposal because wholesale prices for the lowest-speed connections would be capped at $24 a month for the first five years of the network.”
Nice try, they haven’t “promised” to raise prices, they haven’t even said they will, they just want to be allowed to raise prices more than inflation, which is a valid concern, would you force a power supply company to continue to drop prices even through they recently faced a disaster wiping out half their grid? Same thing could happen to NBNCo.
Notice the wording in the article: “have the ability to”. A supermarket “has the ability to” start charging you $4 for 2L of milk tomorrow. Will that supermarket do that? Not likely.
The fact is, the rest of the documents submitted via NBNCo, like the I mentioned, show that they intend to reduce prices over time in nominal terms.
As I said: they haven’t “promised” to do it.
Isn’t it the case that iiNet’s prices are on the high side for entry level but very attractive for power users? Could they be trying to corner a particular segment of the market and taking advantage of the NBNCo’s changes to pricing for ISPs with fewer subscribers?
Can we just build the damn thing and get over it?
I think NBN Co is trying to do as much as they can before the next election :)
Well if they are then they are doing a poor effort of it, delays and delays is the default for NBN Co.
Agreed, this doesn’t help their cause either.
http://www.itnews.com.au/News/272657,nbn-committee-stalls-after-rollout-data-withheld.aspx
iiNets pricing, both entry level and power user, seem perfectly reasonable to me. Cheaper than current ADSL for a more reliable and faster service.
The ability of the Opposition to claim that black is white w.r.t the NBN is just astounding. They keep doing it. Perhaps they believe it themselves?
People here are used to high prices? Sorry but as a Canadian and American, I’m used to paying far lower prices for broadband both in North America and in Asia (where I lived for some time), and to have it installed the day I move into a place (and without worrying about if the phone/cable TV line is of good enough quality), not 2 or 3 weeks later and with uncertain results.
We should be comparing prices to what is abroad, not what Australians are used to.
I hear what you’re saying Tom, but it’s also difficult to compare Australia to places like America and Asia where the population is far more concentrated in terms of area than in Australia. That’s the reason the government is building this, because the spread of the Australian population is too wide to make it commercially viable for an organisation.
I was very impressed by the internet in the USA (not the mobile service however, which was ghastly), and agree that prices are still rather high… but we’re making steps in the right direction in terms of speed and so on, competition can always drive the prices down later.
But Canada is similar to Australia in terms of population density and having vast spaces where nobody lives – all the population is concentrated in cities just like here.
And Internet and cable TV connectivity is like the U.S. – assumed and expected to be there as soon as you move in, with the landlord or property manager having no right to make a fuss when you try to wire a place, unlike in Australia.
Did Canada and the USA Govrenments require all existing working privately owned funded fixed line infrastructure to be switched off so that a taxpayer funded FTTH rollout can survive?
No, so both countries are not even close to being like Australia.
Alain, what’s your point?
Just proves that the Australian communications system is messed up. Should have left it entirely up to private companies as in Canada, with the government giving those companies (particularly the cable TV providers running coax and fibre) utility access rights to ensure that every single building can be wired, no questions asked or permission required.
FYI Conroy’s spokesperson has clarified his comments to note that he meant ‘two times’ the data quota — not ‘ten times’.
So he was correct in binary!
“Conroy claimed Fletcher was barking up the wrong tree and was continuing to attack ISPs”
That’s an outright lie.
Fletcher specifically covered himself. He said he wasn’t attacking the ISPs but rather the NBN. The ISPs set costs based on the wholesale by NBNCo, which is higher than CAN wholesale and is planned to increase!
Conroy is avoiding any responsibility in this matter, trying to divert blame with deceitful statements.
The more I see of these NBN prices the more I am keen to repeat:
If you were to compare the 12/1 and 25/5 NBN plans against ADSL2/2+ plans the key factor in determining cost difference comes down to this one simple point:
The landline / home phone line.
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