news A spat between fibre-optic wholesaler Opticomm and retail ISPs iiNet and Internode has broken out online after the company was forced to defend claims that the prices it charges for access to its infrastructure in new estates are significantly higher than that ISPs pay for access to fibre under the National Broadband Network.
Opticomm is one of a handful of companies building fibre to the home solutions in certain locations around Australia. In general, NBN Co will work with the companies to ensure the NBN does not overbuild in areas that they cover. So far, Opticomm has laid fibre in several dozen housing estates around Australia.
However, in a discussion which had taken place over the past month on broadband forum Whirlpool, a number of aggrieved customers pointed out retail prices over the infrastructure provided through ISPs like iiNet and Internode were dramatically more expensive than similar plans on NBN infrastructure.
The maximum download limit which iiNet allows over Opticomm’s infrastructure, for example, is a 90GB/90GB off- and on-peak plan at 100MBps for $159.95. But for just $99.95 per month, customers can get a 100Mbps NBN plan with a whopping 500GB/500GB worth of quota. Similar massive pricing differences exist on Internode’s plans.
“Opticomm charges more than NBN. What’s the mystery?” wrote iiNet chief executive Michael Malone on Whirlpool, in reaction to customer complaints on the issue.
Internode representative Michael Kratz noted in early October that the ISP had “some improvements” in the pipeline for the fibre estate plans, but couldn’t give a date for the new plans to land. “I will say: they won’t be the same as the NBN plans, but they will have Fibre Power and Business packs,” he said, referring to add-on features Internode offers with other plans.
However, Opticomm general manager of operations Stephen Davies was having none of Malone’s criticism. “Hi Michael, I am sorry to say that is incorrect,” he wrote. “The particular point most of the posters are raising is not about the access speeds, but about the lack of download quota – something which Opticomm has zero control or influence over.”
Davies stated that NBN Co charged ISPs $24 per month per end user for the access virtual circuit component of its network charge for a 12Mbps connection, compared with $20 per month for both the AVC and backhaul connectivity virtual circuit charge equivalent for a 25Mbps service. “If we put aside the wholesale charges (which all can see Opticomm is cheaper) why the difference on the quota, when the quota is entirely influenced by iiet domestic and international purchasing capability?” asked Davies. “Perhaps give us a call next week and we can discuss,” he told Malone.
In a later thread, Davies clarified that it wasn’t his intention to “bag” the ISPs — “who work with us extremely well”. “[Retail service providers] have their own reasons — which I am sure are justified — to charge whatever retail prices they like,” he wrote. “The reason I responded was to counteract a number of statements which were claiming the reason for the price difference between FTTH via NBNco and FTTH via Opticomm was due to Opticomm charging higher prices.”
However, Davies did note that as a company, Opticomm in general didn’t think much of the Government’s NBN project as a whole.
“… it’s the opinion of the company that I work for, not just my opinion. While Opticomm fully supports the Government’s National Broadband Network policy – the implementation by NBNco has in our opinion been a failure and will continue to be a failure,” he wrote.
Davies said considering most of Opticomm’s staff had been building fibre to the home networks for more than eight years and had visited many such installations around the world, they were suitably experienced to know “what works and what does not”.
“It’s not unprofessional for me to state an opinion that NBN Co will not survive in its current form (and particularly with the political atmosphere),” he added. “It may well be an unpopular opinion with most on this forum, but we are entitled to our opinions and I think we are in a better position than most in Australia to offer that opinion. What everyone needs to understand is that NBN Co is NOT ‘The NBN” policy’, and as I said before we fully support the notion of a National Broadband Network, just not how it’s being implemented by NBN Co.”
Put simply, there must be a reason why iiNet and Internode are so far charging such outlandish prices for access to Opticomm’s infrastructure, and I do believe Michael Malone when he says the company’s pricing is more expensive than NBN Co’s — after all, what reason does the iiNet CEO have to lie in a public forum about this kind of stuff?
However, I also think that with the scale of users that both iiNet and Internode have, that they should be able to negotiate better prices from Opticomm here. Is Opticomm really in a position of power? Sure, it may be the only broadband provider in the new housing estates it’s servicing. But it’s still a tiny company compared with the retail ISPs. I’m sure a better solution can be worked out here.
It is also possible that part of the reason that the ISPs’ prices are so high in the new housing estates is that they may be charging end users the same prices to access estates fibred by Telstra (Point Cook in Victoria being an example) as they are to access estates fibred by others like Opticomm.
So, for example, iiNet and Internode might have bundled up ‘all fibred housing estates’ into one overarching set of pricing plans, based on the worst possible scenario that Telstra is the wholesale provider — when in fact, they may be getting better terms in some individual estates. I’m not quite sure to what extent this is the case, but it certainly would help explain things.