opinion The release of Optus’ National Broadband Network plans yesterday represents the final nail in the coffin for the Coalition’s patently untrue claim that the rollout of the NBN will cause broadband prices around Australia to rise above current ADSL levels.
Several months ago, Liberal MP Paul Fletcher went on somewhat of a rampage against the NBN policy in general, based on what were then a limited tranche of early NBN prices released by national broadband providers like iiNet, Internode and Exetel. Prime Minister Julia Gillard, Fletcher pointed out, had stated in parliament that families would benefit from lower broadband prices under the NBN — alongside other benefits such as higher levels of competition and better broadband products in the telecommunications market. However, Fletcher claimed very publicly and loudly, the early pricing releases demonstrated the falsity of Gillard’s claims.
“I calculate that iiNet’s entry level naked DSL product today costs around 70 cents per gigabyte – but its new entry level NBN product will cost $1.25 per gigabyte, or nearly 80 per cent more,” Fletcher said at the time. And although cut-rate broadband operators Exetel and Dodo had already announced extremely cheap NBN plans, that wasn’t good enough for the MP — as he pointed out that the companies only had a minor share of the broadband market.
Shadow Communications Minister Malcolm Turnbull has also consistently attacked NBN prices over the past six months.
In August, Turnbull claimed the cost of NBN services would “widen the digital divide” in Australia. And when Internode first released its NBN pricing, the Member for Wentworth stated the ISP’s pricing demonstrated that consumer prices under the NBN would be higher than current broadband prices. “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.
Now, these were pretty controversial statements for the Coalition’s dynamic telecommunications duo to make at the time; articles about the issue received hundreds of comments on Delimiter, and I’m sure many more on other sites. The two Liberal MPs raised the issue of pricing repeatedly over a period of many months and didn’t let up their attack on the Government.
All of this is why the release of Optus’ NBN pricing plans yesterday must be so satisfying to those who are in favour of the NBN policy.
As many commenters pointed out yesterday, virtually every single aspect of Optus’ NBN pricing plans represents better value than the telco’s current ADSL plans — and for exactly the same price. Optus doesn’t currently actively promote its HFC cable offering, so it’s tough to get an idea of what its prices are there. But if you compare its ADSL broadband plans to its NBN broadband plans, you’ll witness something phenomenal: The plans are virtually identical.
In naked DSL, Optus currently offers three plans, at $59.99, $69.99 and $79.99 monthly price points, and with 120GB, 150GB and 500GB of data quota included. And in naked NBN, Optus offers exactly the same price points and download quotas.
In bundled DSL, Optus currently offers five plans, at $79, $99, $109, $129 and $149 price points, and with 120GB, 500GB and terabyte download quotas, with varying amounts of call charges included — usually unlimited ‘standard’ local and national telephone calls within Australia, to both landlines and mobile phones. And in bundled NBN, Optus offers many of the same price points and quotas — except sometimes they’re cheaper. The company’s $79 plan with 120 GB of data has morphed into a $64.94 plan (with, admittedly slightly lesser calling value). The $109 bundled plan with 500GB of data and unlimited calls has been copied straight across, and so has the $129 plan with a terabyte of data and unlimited calls.
See what’s happened here? When it was putting together its NBN pricing plans, it’s as if Optus’ internal pricing experts simply hit Control-C, Control-V a few times to copy the spreadsheet of existing ADSL plans across into an NBN world, tinkering a tiny bit around the edges, but otherwise changing nothing for a fibred-up world.
You can imagine a couple of Homer Simpson-like characters sitting in a meeting room at Optus’ North Ryde campus, staring at each other. “The CEO wants NBN prices. What are we going to so?” one would ask, staring blankly at the other and chewing the end of their pen. “… not sure, dude,” the other would reply. “Wait — maybe if we just copy the ADSL plans? Do you think anybody would notice?”
“You’re a bloody genius!” the other would reply. “Copy and paste for the win!”
Of course, this isn’t how the conversation went in reality. In actual fact, I have no doubt that some very complex discussions have been going on in the Optus bunker over the past few weeks, as Optus’ financial whizkids tried to answer a very complex question: Was it possible to make the NBN unit costs fit the mould of the existing Optus broadband pricing structure, which had doubtless been built up through years of customer research?
The answer, it appears, is yes, and this is an answer that has very dramatic implications for the Coalition.
Over the past few months, both Fletcher and Turnbull have very loudly and publicly proclaimed that prices would rise under the NBN. This claim can now be objectively demonstrated to be false. Most of the NBN prices which major ISPs like iiNet and Internode have released were already comparable to current ADSL broadband pricing, and now Optus’ prices have been shown to be exactly the same.
The icing on the taste NBN cake, of course, is that while the prices may be similar, the service you’re buying will actually be dramatically different. Current Optus ADSL customers will be lucky to get upwards of 12Mbps speeds through their broadband connection. Under the new NBN fibre plans, they will not only get guaranteed 25Mbps speeds, but better reliability, latency and overall quality on their connections.
In summary, the launch of mainstream NBN pricing has now conclusively shown that Australians will pay at least the same, if not in some cases better pricing under the NBN than they are now paying for ADSL broadband. And they will get a much better service to boot. As Communications Minister Stephen Conroy said yesterday: “Critics of the NBN who have run scare campaigns that the NBN would be unaffordable are being shown to be plain wrong.” I couldn’t agree more.
So far, I haven’t noticed a peep from either Turnbull or Fletcher about Optus’ pricing plans. Yesterday the former Opposition Leader was too busy heaping praise upon the retiring chief executive of News Ltd to be bothered issuing a statement regarding the Optus prices, while Fletcher didn’t appear to be doing anything much at all, if you believe the inaction on his Twitter profile and official website.
The beautiful irony, of course, is that it has been nothing less than Fletcher’s own former employer — Optus — which has disproven his controversial claims about NBN pricing. The MP can’t be happy about that one.
Now that their claims have been proven false, one’s thoughts naturally turn to what Fletcher and Turnbull ought to do about the fact. Well, let me lay it out for them, in black and white, so that there is no ambiguity.
The path of an honourable man, when confronted by irrefutable evidence that he is wrong on any given issue, is extremely clear. He must admit that he has been wrong in his statements and his actions. He must admit so publicly, openly and honestly, cede the point to his enemies and acknowledge his failings. After this has been done, the path ahead will open up again, and he will be free to pursue new lines of inquiry, formulate new arguments, open new fronts in the battle and engage anew.
The NBN policy debate is far from over, and there are many fertile grounds for the Coalition to debate in Australian telecommunications policy before the next election.
There is no shame in admitting you were wrong. In fact, it is extremely healthy for debate and the ongoing function of democracy. The purpose of public debate is to rigorously investigate new ideas and test their strength in a marketplace of opinions. If they survive, they will thrive. But if they are proven false — as the Coalition’s NBN pricing claims now have been — they must be put down, lest they infest the clean conversation with their foul odour.
But I warn both Turnbull and Fletcher. If the two do not admit that they have been wrong on this issue, and do it soon, their comments will continue to dog them.
They will be left further and further behind in the debate. If they continue to insist upon claiming — against all the available evidence — that the NBN policy will lead to higher prices in Australia’s broadband market, they will demonstrate themselves to be not only inflexible thinkers, but dogmatic pursuers of cynical political outcomes which run contra to objective truth.
Moreover, the public — already significantly jaded by the Coalition’s unsightly and unfair attacks on NBN Co chief executive Mike Quigley’s Alcatel-Lucent history — will start to take this side of politics even less seriously than it already is. If the Coalition viciously attacks innocent men in public and won’t admit when its telecommunications policy claims are proven incorrect, voters must wonder … why should the party be trusted at all? On any matter?
So, Messeurs Fletcher and Turnbull: Do us proud. Admit that the NBN will be decently priced and move the argument on. Or else — I promise you — many commentators will remind the public of this failing again and again until you do.