Despite bumps in the rollout,
households show strong support for the NBN

This article is by Rowan Wilken, Research Fellow & Senior Lecturer in Media & Communications at Swinburne University of Technology. It first appeared on The Conversation and is replicated here with permission.

analysis The NBN is emerging as one of the key issues in the lead-up to this year’s federal election. But the project has been fraught with challenges: planning issues and a shortage of skilled labour have delayed the rollout process. Today it was reported that NBN Co is now set to downgrade rollout targets by up to half of those initially forecast.

Given the scale and costs of the project, and the intense debate it has generated, there is strong interest in how it is being experienced and received by end consumers.

Our study of households in the Melbourne suburb of Brunswick provides some early insight into household take-up and adoption of the NBN. The research was undertaken by the University of Melbourne and Swinburne University, with financial support from a research grant from independent consumer advocacy group, the Australian Communications Consumer Action Network (ACCAN).

The study, conducted between 2011-12, consisted of surveys with 282 households, and follow-up interviews with and surveying of a smaller subset of these. It examined which households adopted the NBN and why; how people understand broadband services; and how people view the NBN. It also asked whether the adoption of the NBN impacted on household communications costs, use of the internet, and devices in the home. Our findings reveal that there is significant householder interest in and support for the NBN, but there are ongoing challenges facing roll-out and adoption.

Between 2011 and 2012, the number of households in the Brunswick site that had an active NBN connection rose from 20% to 36% – less than half of those who agreed or strongly agreed that the NBN was a good idea. We found that this relatively low rate of connection was a consequence of several factors at play. It was influenced by households’ lack of awareness of the NBN and its availability; households having to deal with an unfamiliar broadband technology; households waiting for retail service plans to be made available, and an often confusing “opt-in” installation process – no longer used by NBN Co – that required landlords, not residents, to sign off on the agreement.

It is no surprise then that those taking up the NBN were much more likely to be home-owners (63%) rather than tenants, who in shared households also had a preference for individual wireless broadband services for reasons of individual billing, housing mobility and flexibility. The longitudinal data did, however, reveal an increase in household adoption of the NBN, suggesting many of these earlier awareness and installation issues had been worked through.

Perception of Internet service value was a significant factor in decision-making about the NBN across all household connection types, with 24% NBN households and 29% of non-NBN households nominating value as the main reason.

For non-NBN connected households, the value proposition of their current internet service was based on perceived cost, satisfaction with ADSL performance, or satisfaction with their current bundled plan. Meanwhile, for NBN connected households, value was related to personal benefits in terms of data volume and speed, as well as broader community and economic benefits such as productivity and inclusion.

Despite the concerns of non-NBN households, the data suggests that adopting high-speed broadband services on the NBN does not necessarily increase the cost of household internet. Instead, for 49% of the households in this study, the NBN was perceived to have no real impact on internet cost. For those whose costs did increase somewhat (26%), this was often accompanied by increased internet speeds, and sense of value. For those whose costs decreased somewhat (11%), this was often associated with a substitution of landline telephone for a VoIP telephone service, in which the cost of data and voice were bundled in a single service plan.

Of the households that had taken up NBN plans, 62% reported that the volume of home internet use had either increased somewhat or a lot. NBN-connected homes are more likely to make greater use of the internet, and are more likely to engage in more sophisticated online activities, but the association is not necessarily causal. NBN-connected households are almost twice as likely to be used as places of work (30%) than other households (15%).

The personal value proposition of the NBN as revealed by this study is its speed and its data capacity, which is perceived to be associated with increased participation in the digital economy for both work and leisure. While varying factors shaped specific household adoption of the NBN for those living in Brunswick, most agreed that the NBN is of national value and can help to play an important role in building the productivity and competitiveness of the national economy, and in providing for universal digital inclusion.

Overall, 82% of surveyed households either agreed or strongly agreed that the NBN is a good idea, seeing it as important infrastructure for all Australians (14%), beneficial for the future (11%), improve national productivity (8%), helping us to maintain global competitiveness (6%), and connecting rural Australia (5%). In contrast, only a small fraction thought it was too costly and a misdirected use of government funding (6%), or too complicated and suffering delays (2%).

Even so, there is still much work to be done in explaining to consumers fundamental technical aspects of and retail pricing structures for the NBN. For instance, while many households are aware of their monthly ISP data allowance (72% know their data amount), they tend to be much less knowledgeable about the data speed possible or advertised as part of their service plan (68% unsure of Internet speed).

It appears that consumer knowledge about internet plans remains dominated by past retail pricing options and measures based on volume rather than speed. Given that upload and download speed is the NBN’s chief reason for being, this is something that both the NBN Co and ISPs will need to address as the rollout proceeds.

Rowan Wilken receives funding from the Australian Research Council to study location-based media services and the NBN.This article was originally published at The Conversation. Read the original article.

Image credit: NBN Co