The NBN is not about “basic voice services”


blog One can’t help but be disappointed to see former Optus executive and now Member for Bradfield Paul Fletcher on Sky News over the weekend questioning whether the rollout of the National Broadband Network will force higher costs on basic voice telephone services — or even calling directory assistance. Quoth Fletcher:

“Will people end up paying more for basic voice services? So when the government comes knocking on your door saying ‘we’re going to turn off your existing phone service — you’ve got to take a new one’, if that means a higher voice price, then there’s a range of other retail political issues.”

Now, I have always respected Fletcher for both his integrity and his opinions. But frankly, it’s hard not to come to the conclusion right now that the MP is barking up the wrong tree when it comes to criticising the NBN on the basis of basic services. When you roll out fibre internet around the nation and start providing broadband services at 1Gbps, the provision of “basic voice services” at an affordable price is the least of your problems. Basic voice telephony will be virtually free at that point (through Skype, Google Talk etc).

Fletcher is demeaning his technical background by focusing on such a pointless argument. You don’t debate the cost of placing a call to Dubbo when the Government is talking about technology that can enable high-definition video-conferencing to every home in Australia. It’s that simple.

Image credit: Office of Malcolm Turnbull


  1. I will not be getting $160 A month internet when Brisbane gets its turmn to have the national broadband network,

    • Thanks for telling us Anthony. What other made up figures of things you wont be buying would you like to share with us?

    • Just to back Simon, what makes you think you’ll be paying anything like $160 a month? That’s just a ridiculous figure straight from the Liberal playbook.

      Down in Tassie, you can get an iiNet NBN plan for $30 plus another $10 for a VOIP phone including unlimited local and national calls.

      So for $40, you’ve got faster-than-ADSL2+ internet, plus a phone line and most of your calls included. Somehow I doubt you’re paying less than that now.

      • The Joys of FUD and politics…it will be interesting to see what new made up things the Libs/The Australian can develop to scare Mom and Pop…
        I read one the other day that said that lightning might hit the cable and set your house on fire…
        It’s obscene, expecially when these guys should know better and care not a whit for the people they are supposed to represent.

        • I’ve seen plenty of phones and phone systems taken out by lightning, the power cables are the biggest culprit not the phone cables. Just look at a power pole , if there are any phone or cable tv cables they’re below the power cables, which one does the lightning hit first.

          • It will hit the one with the greatest potential difference to earth irrespective of height if my memory serves me.

            And you do realise this article is 2yrs old right?

    • Why don’t you check out how much internet services are in NBN serviced areas currently?
      They’re quite competitive with ADSL, and much faster.

      • Because NBN does not charge any fees from ISPs at the moment. Take those prices and add at least $24 and get the result yourself.

        • NBNCo, after months of consultation with many ISPs, has provided at figure 8.18 a variety of retail packages (i.e. bandwidth and data volume combinations) and their likely prices to consumers. So you can realistically expect ISPs to sell you 50GB @ 12/1 Mbps from $53 (available on satellite, wireless or fibre), or 500GB @ 100/40 Mbps from $81, among many other possibilities.

          For the Tassie pilot, while you are correct that there was not a formal wholesale charge payable by partcicipating ISPs to NBNCo, they still had costs exceeding $25 a month per customer, and discovering that the permanent backhaul had to be provisioned as a multiple of peak demand to avoid certain technical glitches caught several of them by surprise. After the 14 first-release sites, we will have a better idea of costs going forward.

          Whatever the detail, it is obvious that even a pensioner paying $30 a month for phone line and calls will have an equivalent service at the same cost, but no additional costs for unlimited phone calls.

          • I want to believe in this but I’m a realist. Prices WILL be much higher (by tens of percent) but more scary fact is that we will not have any other option should NBNCo decides to increase their prices.
            You will pay three times for this network:
            1. By taxes (already paid).
            2. More taxes to make this project working.
            3. By paying draconian access fees.
            I like the idea of fast network but I do not trust our government to manage it. They know how to spend and make promises for good return. It is easy to make these promises and just loose next elections. Nobody is responsible…

          • Michael, a source please for your assertion that retail prices will be “tens of percent higher”. Since we now have the cost breakdowns for RSPs to access and transfer data over the NBN it is possible to construct packages of bandwidth and data and add a retail margin. See figure 8.18 of the Business Plan for examples. I assume you have read it and are not talking through your hat, so how did you calculate a higher figure?

          • First, retail prices are extremely dependent on wholesale prices. Second, who can guarantee these prices after NBNCo is sold to private sector? I just predicted that in absence of competition this scenario is very likely.

  2. Ouch Renai is hurt by the Truth.

    Yes absolutely correct. Everybody, EVERYBODY who does not have broadband now who just uses their fixed line for making calls willl definitely pay more for making a voice call.

    All those premises like holidays houses and such will have the copper fixed line rescinded. And most people will not pay to have them reconnected to fibre. They wont pay the periodical subscription fee, they wont pay the hardware cost.

    The NBN will be great for further pushing the already exploding growth of wireless broadband.

    • *cough*

      I have been paying less and less every year for making any sort of voice call over the past 20 years. Why? Technology is moving very fast and changing things. Currently, I pay absolutely nothing for many calls, because I place them to other small businesses over Skype. Of course, both sides need to have broadband, but then we would need that anyway.

      Can’t beat the cost of free.

      • “And most people will not pay to have them reconnected to fibre”
        But they’ll only have to pay if they opt-out/don’t opt-in at the time of the initial roll out.

        How will people be having to pay more for phone calls?

        We might even seen ‘line rental’ go away…..

        we can also speculate as much as we want until we actually see real pricing

        • Shhh. People are obviously very happy with the current copper phone network and its pricing structures.

          • And you are already happy with unknowing pricing of NBN, aren’t you? After government sells the NBN prices will be unbelievably high and no other infrastructure is available for competition. Lucky NBN.

      • I was actually paying more and more (in line rental, that is).. $11, then $14-15, then $19, now $21.

        That is, until I got my Naked DSL and went to VoIP only, last month. Now it’s $5 and includes $10 worth of calls (which I never reach, partially due to the lower individual call rates)!

        NBN will free people from Telstra, so you would expect people to be paying less, not more, due to this freedom.

      • That’s fine but you cannot compare the use of the Telstra PSTN system both as a direct service from Telstra or as a resold service from another retailer to Skype and say that’s around what a NBN voice service will retail for.
        VoIP is readily available today, but a immeasurable proportion of the fixed line population use it, the vast majority of voice calls are made on mobiles and PSTN.

        To make a great leap of value judgment forward and say NBN voice = 2010 VoIP plans is drawing a very long bow indeed.
        The voice calls will part of the NBN package, like Telstra and Optus do today with their HFC and ADSL2+ total services packages, the ISP’s will be working hard to try and ‘persuade’ you not to take voice NBN only, making it a no brainer on a total package value comparison.

    • That’s for sharing the “facts” with us Mr Reality Check. Would you like to provide some links now backing up these extraordinary claims you are making? If you are so certain of the situation, then surely there must be a lot of evidence to back up what you’re saying.. So.. where is it?

      Given I can now make calls via VOIP on my naked DSL line at a fraction of the cost that I used to make regular calls at, how is you figure that EVERYBODY will be paying more to make a voice call on the NBN?

      What the hell does the price of the hardware in a consumer’s house have to do with their call rate from a retail telephone company? As explained by Mike Quiqley several hundred times, its a myth that you’ll need new hardware to make calls on the NBN. Providing the house in connected to begin with, any old PSTN phone will plug into the wall outlet. Just as it does now. That’s why an Opt-Out system is so much more sensible, to ensure customers arent hit with big charges later on to connect a house if they miss out on getting it done during the roll-out.

      The only part that is still unclear to is power supply , as in the event of a power failure there will surely have to be a battery backup installed should you wish to retain the ability to make calls? Regardless, all of this has SFA to do with call rates. As Renai says they will obviously continue to fall rapidly, irrespective of the NBN

  3. Isn’t it a bit of a strawman to be criticizing the price of regular voice calls when we don’t even know how much they’re going to cost anyway?

    Even if you ignore the obvious Skype/VOIP where it’s largely free anyway, I’m pretty sure no pricing has been released by NBNco (let alone any of the retail providers) on the actual retail price of a voice-only service over the NBN, so how can you say it’s going to be more expensive?

  4. I hate Skype too many people call me when it’s free.

    I leave Skype off to make the bastards pay.

    Fletcher is right, we should fool around with a slow, piecemeal, painful migration off the old system just so I can force all those bastards to pay.

  5. What is a ‘fixed line’?

    Oh wow, those are those things old people have in their houses right?

    Sorry for my ignorance, I have a mobile phone and a PC with skype/vent/google talk/teamspeak/etc.

    I can’t remember the last time I ever used a land line or ever called someone on one. We can do without those stone-age devices.

    It is a massive strawman to even bring up something so obsolete.

    • Landline is what you run ADSL1 and ADSL2+ over, so what is the BB connection to your PC?

  6. Basic Line Rental: $20?
    A couple of local calls a week: $5?
    000 when needed: $0

    Are we likely to see NBN plans under $25?
    That also work when the power goes out?

    I’ll be upgrading whenever I can — but I’m not sure it’s a net win for my grandmother.

    • Yeah you’ll need to fork out like $40 for a battery.

      Internode have this
      Cheapest internet plan $29.95
      VOIP plan $5 ($10 call credit)

      So $35 and you get a basic package for net and phone.
      iPrimus have a $24.95 phone plan for the NBN, with 350 local and 150 national calls included

      They do have this part which is concerning:
      “# Priority Assistance does not apply to the Fibre Telephone service. A Fibre Telephone service alone is not recommended if you/another resident have a disability, serious illness or other life threatening condition necessitating an uninterrupted phone line. No outgoing or incoming calls will be available if there is a power failure and the back-up facility is not maintained. It the customers’ responsibility to power the back-up facility.”

      So if the copper is turned off, everyone will be on an interruptible phone line. I hadn’t thought about that aspect.

      Its possible that everyone will be on some kind of VOIP connection with the NBN in place and as we currently see these things are cheap.

      Also the current NBN prices we can see are for Tasmania, I’d expect things to be cheaper when they hit the main land.

      • Current NBN prices are FREE. Yes, that’s right, the NBN is charging NOTHING for connection to premises, NOTHING for access to the fibre, and only a token usage fee. These are clearly not the real prices, they are nothing but introductory prices to get people signed up. When the real NBN starts, if they are serious in wanting a commercial return, prices will have to be in the $100/month region to even pay the interest. $43billion (although it’s really 51 billion, you can’t seriously call 13 billion dollars to telstra an “operating expense”) earns a hell of a lot of interest, divide that by 10 million (that’s about how many houses there are in Australia), and see what that comes to.. about $30/month JUST for interest. No operating costs, no bandwidth costs, no electricity, oh and no retail margins. Just adding that to the Tasmanian prices makes them more than what is currently available with ADSL2, add the operating costs on as well and we’re getting up to $100/month for the ‘base’ package. Now maybe it will be subsidised, maybe not, but either way we’re still going to be paying for it either directly or through taxes.

        • Because the data just magically flies from the NBNco port to the ISP’s international routers?

          Get real, it’s not free in the least. Tasmania is one of the most expensive places in Australia to get data in and out of, yet they can still do incredible prices.

          Just wait till NBN hits mainland :)

          • Must be embarrassing then that not many of the Tassie piliot site residences have actually signed up for it.

            Perhaps they are all happy with Skype over copper.


        • 1. They have repeatedly stated that they are *not* trying to make a commercial (~13%) return. They are going to provide a return exceeding the Govt Bond Rate (> ~6%).

          2. NBN are charging a 1-off $300 fee to ISPs in Tasmania to connect customers to the NBN, until finalised. ISPs must pay for their own backhaul. So there is nothing ‘free’ about it.

          3. The KPMG report recommended that NBN offer basic 25Mbps data for wholesale of $20-30, and voice+data for $35. They found that the NBN would provide a return exceeding the bond rate at those prices.

          This compares to $24.44/mon that Telstra charge for ADSL1 wholesale and about $40 for ADSL+phone line. So while wholesale NBN prices are not finalised, it’s likely that they will be comparable to current phone+ADSL service pricing, despite the greater speeeds.

          The NBN is a long-term project, just like the telephone network was when it was built (at a similar relative cost). Do you think that there was never a Capex for running out all that copper 60 years ago?

          3. Tha Capex of the network is $34.4bn, plus $1.3bn for maintenance (35.7bn). The 13bn to telstra is an operating expense, just like any other such as electricity or water.

        • although it’s really 51 billion, you can’t seriously call 13 billion dollars to Telstra an “operating expense”

          Another point Andrew the deal with Telstra is a net cost neutral deal, because their going use existing Telstra infrastructure. I don’t know where did your accountancy degree but you better ask for your money back.

          • $16 billion and counting is not ‘net neutral’, it’s real money that will be paid into a Telstra bank account, and the billions under negotiation with Optus is also not ‘net neutral’ , that’s real cash flow accounting also.

            The NBN without the Telstra and Optus customer base onboard (forcibly migrated) is a dressed up turkey with no Christmas to look forward to.

  7. And what about the aged who don’t use the internet but require a basic phone service that has an alarm dialer and some sort of nurse call system. Will that all still work ?. These are basic services that many older people use on their POTS line and the NBN OTU must be fully compatible with these services or these older citizens will be forced to pay for upgraded of equipment to get no benefit.

    • Certain alarms will work fine.
      12. # Does the NBN support Security Alarm Systems?

      Yes, a variety of security alarm systems which use DTMF dialling and specialised signalling have been successfully tested over the NBN Tasmania network. Some older alarm systems are not supported. Please check with a participating RSP.
      But as I said in my other post, it will require the nbn connection to be setup as interruptible, so it’ll need a battery that will need to be maintained.

      Maybe we’ll see alarm companies (or someone) bringing out batteries with connected monitoring devices that do some kind of monitoring/notification as well

  8. Fletcher has asked the wrong question (or raised the wrong complaint, however you want to put it), but Renai your response disappoints.

    Like you, I use VoIP on my home phone (Freshtel for reference), and Skype on the computer when placing video calls to friends and family. Unlike yourself, I do have a fixed home phone service, but being in what’s classified as regional Australia naked DSL or cable isn’t an option. Keep in mind I work in Sydney, so I’m not exactly that regional.

    The real question that should have been asked is what is connectivity going to cost, ie. what it’s going to cost to have the fibre to your door, regardless of what you use it for.

    As someone above has already pointed out there are plenty of older Australians that don’t use computers so high speed internet connections where they can run HD video conferencing is useless to them, in that same boat I know people younger than me who are pretty much computer illiterate and rely on their home phone service, and then I know people who work in telecoms with me who don’t even have a home computer.

    The presumption with the NBN is all these great services that will be provided, but the bottom line to a lot of Australians is what’s the new cost going to be just to have a service there, and if it’s going to be more than the current line rental costs.

  9. Like the NBN, the story neglects the “forgotten 7%” who won’t get FTTP. We will still have copper telephony presumably, though there’s bugger all published to let us know what will happen to us… but hey, everyone in Sydney and Melbourne will get fibre, so who cares?

  10. This would be the same Paul Fletcher who as an Optus executve oversaw the introduction of 123YES for $1.00 to replace free directory assistance, right?

  11. The concern about a basic service – telephone or otherwise – is a perfectly valid one. The trouble is, you cannot spend $50b of capital and expect to end up with something that costs just the same. Somebody has to pay, and there has to be substantial numbers of people paying, so that means the basic service is going to have to make a considerable contribution towards paying off the $50b.

    When was the last time you went out and built a brand new investment property, demolishing your old one in the process, and only expected to get the same rental income as you had before?

    • That rental analogy is really bad.

      If I am renting off you, and you improve the house in any way, then I am getting a better service from you, and I understandably have to pay for that extra level of service.

      But a basic phone service is the same whether it is provided over copper or fibre, in fact it could be argued in the case of a basic phone service it’s detrimental to deliver over fibre since the phone can no longer be powered by the copper meaning in a blackout situation when the UPS (provided there is one) dies the basic phone service no longer operates. Why should someone have to pay more to get what is really a lower level of service as they are getting right now?

      • Why do people dwell on the ability for phones to be powered by copper cables? The NBN ONT’s will have a battery that will negate that.

        Here’s one that you don’t see mentioned – the risk of electrocution over lightning hitting a fibre cable is zero. Hence a telephony service over fibre is much safer than one over copper.

        • Who will be responsible for replacing batteries? At what price?
          About electrocution – risk is about the same.
          In addition, ONT is much less reliable than Telstra’s exchange. How long will it take to fix/replace your private ONT?

        • I live in a heavy populated area of the NSW Central Coast that happens to be on a flood plain. The longest power outage I’m aware of happened about 4 years ago due to flooding and latest 7 days, are you going to guarantee to me that the batteries supplied for battery backup will hold out for at least that long?

          And before you say “use your mobile”, I’m sorry, but it’s battery died on day 3.

          • If there’s a storm and power is out for 7 days, who’s to say the phone lines will be up anyway? If the power lines are down, then it’s just as likely the phones will be, too. Telephone lines aren’t magically immune from storms and in fact copper telephone lines would be *more* susceptible to damage from flooding.

            I’m sure a single set of batteries won’t last 7 days straight running. But if you live in a flood-prone area, it would not be unreasonable to keep a bunch of batteries spare.

            Like I said, fibre cables are more resistant to flooding than copper cables, so you’d actually be better off under the NBN (unless the cables are actually cut of course, but that’s the same regardless).

        • How many people have been hit by lightning from their phone in recent years then ?

  12. For some people the NBN will be only about voice services.

    Last week NBNCo announced that a basic 12 Mbps product would also be available on fibre (previously the options were 25, 50, 100 and in some cases 1 Gbps). 12 Mbps is also the guaranteed bandwidth for wireless and satellite connections.

    This implies that a basic universal service will probably be made available for a subsidised price to health card holders and the like. Currently these pay Telstra $20.95 a month plus phone calls and get a quarterly $33 rebate, so it costs them $9.95 plus calls each month, plus whatever some also choose to pay for dialup or ADSL where available.

    It is easy to imagine that STD call charges really hurt many of these folks, or stop them phoning, and getting a VoIP phone service over fibre or wireless for around $20-25 a month (after subsidy) including unlimited landline calls will make a big difference to their quality of life. The final 3% on satellite only could technically also use VoIP, but the half-second round-trip delay (from the journey to 35,000 km altitude and back) is pretty awful.

    Remember that Senator Conroy has guaranteed that a blackout-proof phone service is part of the NBN technology. There are many ways this can be done and it will be interesting to see which options have been shortlisted to deliver it.

  13. Apparently the ‘device’ that NBN will attach to your house has 3 or 4 broadband ports and one PSTN port. I don’t know the details off the top of my head and don’t have time just now to look it up.

    I won’t speculate on what is going to happen which is what most of this discussion is doing, but wait until next week when the Business Case is published then I would hope that this question will be answered.

    Assuming they use it, just ask yourself what that PSTN port is for.

  14. Simon, now please explain to some elderly women using her phone to get call from her children and paying $20 monthly that from now on she will have to pay $30+$10=$40 to enjoy VOIP calls. Will you?
    I do not approve Telstra and it’s methods but current government does not understand how business works. And let’s face the truth – without competition NBN will be MUCH worse than Telstra. Without competition there will be no improvements to the network (like with current copper one from Telstra) and we will be left behind the world very soon.

    • Telstra’s entry level plan is $20,95 a month, and that does not even include any calls, which are charged at ridiculous rates.

      I’d like to know where the lady in your example is getting phone for $20 a month.

        • Maybe it’s time for old lady to invest in a pre-paid mobile phone so she can receive calls from her children.

          • I have 3 elderly relatives with landlines. None of them can use a mobile. One finds the buttons on mobiles too small and complicated for his fingers, as like many elderly people his hands shake just a bit. One just finds modern technology difficult – she can just about manage the remote for her digital TV but that took a LOT of time to help her get it. And the last one is legally blind and whilst quite good with equipment has never been able to find a mobile phone she can use, especially since touch phones became common. Have you ever tried to teach someone in any of these situations how to use a mobile? I have, over and over, without success. Yet these are all people who are perfectly capable of still living in their own homes, but need the security that they currently get with a landline telephone. Which I still have not seen they will get with the NBN they will be forced to have with fibre to the home.

            Oh, and none of them are eligible for the health card so they all pay the $29.95 basic Telstra rate plus for all calls. The one who is legally blind can claim back the cost of phoning directories and being put through, but nothing for the cost of any calls.

  15. Jay, taxpayers always foot the bill for the social services our elected representatives decide to deliver to those who need them and cannot pay. This is simply a fair go.

    So how much will it cost me? If funded entirely by nine million personal taxpayers, $35.7 billion over ten years works out at $33 a month per taxpayer. But I understand that commercial funds will be sought, reducing the public bill to $27.1 billion, or $25 a month per taxpayer. Most households will probably end up paying less than they now pay for their combined line rental, call plan, call costs, and dialup/ADSL/HFC internet bills, partly offsetting the extra tax paid.

    And of course, businesses will also be substantially contributing, so the personal income tax cost will be less again, but let’s say net cost of $15 a month of extra tax less savings offsets.

    For $15 a month from each of us, every household (including non taxpayers) and business in large towns and cities gets speed-agnostic fibre and minimum 12 Mbps wireless, and another half million premises outside large towns get 12 Mbps wireless but no fibre at this stage. We also get two satellites supplying everyone in Australia at 12 Mbps, and a multicast-enabled network that can supply thousands of downstream viewers with just one backhaul stream of each TV channel, making backhaul upgrades something we will not need to spend as much on for some years to come.

    Sure sounds like a bit more than a basic voice service.

    • First, you forget that this is a credit and it has to be repaid. So, the total sum will be tripled.
      Second, in addition to the “$15” you will pay monthly fee.

  16. Michael, did I understand correctly that you are suggesting that the danger of electrocution exists whehn people change batteries in the NBN household system?

    Glory glory there must be bodies strewn all over Australia from changing batteries…

    People, the exception always proves the rule. Arguing against the NBN on the basis of grandmas changing batteries and 7 day flood scenarios is just too precious… Are you serious?

    Michael, just where did you get those mega-rubbery numbers? $30 pm for a basic NBN phone service. Fantasy Island is for Peter Pan man, base your posts on facts or get off the pot…

    Some folks are claiming that they already know more about the NBN than Quigley, which is quirky and more BS than the aftermath of the Bull Runs in Spain… lol, really guys.

    F>A>C>T>S please. Nice and easy: Quote facts and leave the subjective suppositions in the drawer with the old photos of Sol Trujillo… tnx

    • I did not. Since copper network is protected against lightning and wires from ONT are not – the chances are normalized.
      I’m not sure you will be authorized to change batteries yourself. Who’s property is the ONT?
      $30 is the minimum ISPs are charging now. When real wholesale prices are released you’ll be surprised (in a bad way, I believe). Why do you think NBN and government are so reluctant to release any information about NBN?
      And remember, the fact I’m criticizing NBN does not mean I’m against it. The idea is not bad but the execution is very bad.

      • “Since copper network is protected against lightning and wires from ONT are not – the chances are normalized.”

        Sorry to be thick here, but I don’t understand this statement.

        Are you saying that there is an equivalent chance of lightning striking:
        A) the ONT, or a wire inside the house between the ONT and a device,
        and B)Of a lightning strike hitting a telephone poll or other conductor/strike point close enough to a phone line to cause an electrical surge on said phone line?

        Are you suggesting that lightning strikes inside peoples houses as often as tall objects outside it?

          • The ONT power will be supplied by a 12v powerpack, see

            “# Installs the Power Supply Unit inside the premise and runs a 12v power cable to the ONT ”

            A large power surge to the ONT PSU would likely cause the destruction of the plugpack and could possibly damage the ONT itself. Based on personal experience, plugpack powered devices such as routers and other switching equipment tend to burn out too quickly to pose any threat to connected devices (or people using those devices).

            But at that point I’d be worrying about all of the other devices (computers, TVs, everything else) that just got hit rather than the ONT.

  17. At what stage did I argue against the NBN?

    I didn’t, I was merely putting forward a real life situation and asking how the NBN could be expected to handle it. Your response is classic strawman tactics, someone points out a flaw in the system therefore they must be against the whole system, right?

    The reality is things break, and the NBN should be expected to deal with real life situations including natural disasters that don’t destroy infrastructure, not planning for these and expecting everything to run flawlessly is just naive.

  18. @Francis

    “… I understand that commercial funds will be sought, reducing the public bill … per taxpayer. … And of course, businesses will also be substantially contributing …”

    Which planet do you live on? This is CAPITALISM here.
    To break it down: where do the commercial funds and “businesses will also be substantially contributing ” money will come from? Do they grow it on a money-tree?
    Do you recon the CEO will stand up and: “Well, our profit is down 50% but we were payed for the NBN. If you vote for me, next years profit will be even less!”

    Simplifying for the not so well equipped: you will pay for it through those businesses. You just don’t see it on your bill.

    While I don’t have actual figures – and not ready to argue them either – the ~$30/month/taxpayer via taxes sounds correct. As it was said, this is on the top of the ‘normal’ monthly charges/connection.

    Again: this is capitalism. Whoever will decide on the charges, will do so based on some research, how much is Mr. and Mrs. Average can be ripped off for directly via the monthly bills. Then there will make you pay via the taxes in form of government assistance, delivering services you don’t need but have to pay for (driver-license fee, car registration fees, environmental tax, carbon tax, fuel excise ) … you name it.

    @ all

    Funny, many of you believe, VoIP is free. Just because you don’t see a bill-breakdown-call-per-month.
    Depending on your plan you either pay EXTRA or be shaped.
    If you want to avoid paying extra – or be shaped – you will chose to have more data. IE: YOU PRE-PAY the phone.

    I hear the argument “only for the outgoing data!”
    Depending on your plan of course. If you are with Internode and choose the wrong plan, you’ pay for the outgoing data too.

    And Skype is using your download/upload quota without telling you. Skype uses your computer as some sort of ‘exchange’ – so to speak.

    Also, private software VoIPs are incompatible.
    There is no phonebook either. Never will be.
    Of course there are all-compatible systems. You just have to pay for it. See: Factortel, MyNetPhone, MyTel VoIP Service etc. There goes the free phone …

    • @Capitalist, of course VoIP (whether Skype, Pennytel, MyNetFone) uses your bandwidth, but it only consumes less than 14 MB per hour in each direction. Even if you averaged an hour a day on the phone, this is only 30 x (14 + 14) = 840 MB per month. That’s under a $1 of of a typical 50 GB allowance on a $50 ADSL plan. Most mobiles in the next few years will be able to use VoIP via the WiFi shared in your premises, so avoiding costly mobile data and voice charges. All calls between NBN users will be VoIP, so expect something like $10 a month for unlimited calls if it is itemised on your bill.

      As to my comment that business will be contributing (not just personal income taxpayers), please think about it before making silly comments. First, business premises on the NBN will be contributing wholesale revenue to NBNCo via RSPs for their chosen best-value ESSENTIAL business communication costs, not a whim, and secondly the 2015 capital raising will attract fund managers who are not blinded by luddite advisors, but who recognise the rapid escalation of bandwidth demands as a high-profit reality for the NBN business model.

      The purpose of my side comment was not to portray business as philanthropic or stupid, but to explain why “only” $27 billion of the capex needs to be funded publicly over the decade of its construction.

      This $3 billion per year will cause our trillion dollar budget to grow by far more than $3 billion, so is cost-negative for the economy, household comms costs are the same or reduced, and it means world’s best broadband access to 40% who have none at all after fifteen years of competition, and fixing all the issues with today’s broadband for the 60% who do.

      We knew the technical solution was the best one, and the more we learn of the economic detail the more we realise how conservative it is, despite its magnitude. Some would even say that the NBN stands as an ironic beacon as the only well-managed undertaking of the Rudd-Gillard government.

  19. @Francis

    “… VoIP (whether Skype, Pennytel, MyNetFone) uses your bandwidth … That’s under a $1 of of a typical …”
    Whatever the current cost is, it is a cost. In a budget they must be included.

    “As to my comment that business will be contributing (not just personal income taxpayers), please think about it before making silly comments. … the 2015 capital raising will attract fund managers who are not blinded by luddite advisors, but who recognise the rapid escalation of bandwidth demands as a high-profit reality for the NBN business model.”

    Any budget, be it business or personal household, must balance. Businesses on the top of that MUST be profitable. You said it yourself: “a high-profit reality”. So, where is the a high-profit coming from?
    The profit comes from the end user: Mr. & Mrs. Average like you and me.
    In other words, WE, THE USERS will pay for it. Under many names but will pay for it.

    Twist it on ant way you like it, we end up paying for it.

    For example: a business creates a website that cost $X. They budget looks like this:
    cost of production : $ A
    cost of website : $ X
    profit : $ Y
    Total cost to customer = $A + $X + $Y.

    In other words, YOU ARE PAYING for their website. You just don’t see it.

    Let me quote you “… please think about it before making silly comments.”

    “The purpose of my side comment was not to portray business as philanthropic or stupid …”
    I didn’t think so either. A CEO can’t lose money, a business can’t be non-profitable. I was trying to portray that on a funny way.

    “We knew the technical solution was the best one, … the economic detail the more we realise how conservative it is…”
    I am not ready to argue that. However I do argue that the REAL cost to the end user is a lot higher then it seems to be.

    “Some would even say that the NBN stands as an ironic beacon as the only well-managed undertaking of the Rudd-Gillard government.”
    Now this is ironic to make a spelling error in this particular place! :)

  20. @Capitalist, I think we both agree that the operating costs of the NBN will be paid for by its users. But i cannot agree with you that VoIP will make it much more expensive each month, since it is a trivial extra. Nor do I think it is concealed or disguised. At figure 8.18, the NBN plan gives detailed monthly costs for possible combinations of bandwidth and data volume that would reflect commercial profit margins on the wholesale costs paid by a retailer to NBNCo. Of the entry level 50GB data at 12 Mbps example, it is inconceivable that a heavy VoIP user would consume 2% of the data or 10% of the speed with VoIP. It is simply absorbed, like “free” shipping on a large order of books.

    It is my expectation that the vast majority of initial subscribers will take up a 12 Mbps basic NBN service, but that by mid-project (2015-16) there will be a massive uptake of services that require higher bandwidth, and this will cause NBNCo wholesale revenue to surge dramataically higher than the conservative forecast in its business plan. Of the initial subscribers who remain on 12 Mbps long term, a large proportion will be pensioners and others using it as a phone-only service, subsidised for health card holders as at present.

    P.S. There doesn’t appear to be a mis-spelling in the quoted paragraph. I suspect you thought I intended “iconic” instead of “ironic” but I did not. It is ironic (given its detractors) that the NBN, far from being a mismanaged white elephant like some of the government’s other large programs, will be a self-funding and then profitable investment in Australia’s social and economic future. I also fully expect that the electorate will not allow the government of the day to sell off the fibre network in a repeat of the copper fiasco. This opinion is based on some of the later NBN Senate Committee recommendations and the views expressed by a cross-section of politicians and private individuals in various online fora.

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