You'll pay more for NBN in regional Australia, warns ISP chief

by William Maher | Thursday 21 July 2011

The cost of using the NBN is likely to be more for regional users, argues Internode managing director Simon Hacket. Also, initial prices announced.

For some people the NBN is the promise of super fast broadband, and possibly, if you can afford it, massive download quotas. For others, it's more simply the ability to get a reliable, fast Internet connection that doesn't cost the Earth.

It's not exactly reassuring then, to read warnings by the head of one of the ISPs currently involved in the NBN trials, that regional users might end up paying more.

The comments come from Internode managing director Simon Hackett, a critic of the way the NBN is being structured. The cost of the "backhaul" connections between different access sites, as well as the way the network will be structured, means regional users could face higher prices, argues Hackett.

"Unless the government decides to take the initiative here … regional consumers are likely to pay more for their Internet access than they otherwise could," Hackett states on his blog.

"The costs to reach POI’s that are more distant will be higher than the costs to reach POI’s distributed within a major capital city area. That means that it’ll cost more to service a regional customer."

"Higher regional costs will naturally flow through to regionally specific higher retail pricing for consumers."

All this, he argues, goes against the understanding that NBN retail prices will be uniform around the country.

Internode's NBN plans: how much you'll pay

Internode today also announced how much it plans to charge users for the NBN (beyond current "live trials"). An entry level plan will start at $59.95, and will include 30GB of data at a download speed of 12Mbps and upload speed of 1Mbps.

The fastest plan, with downloads at 100Mbps and uploads at 40Mbps, costs $99.95 with 30GB. For the same speeds with 1Terabyte of data, Internode plans to charge $189.95.

Below is a table of Internode's planned NBN prices. while it's tempting to compare If you take into account line rental, or Naked plans which remove line rental from the equation, the entry level NBN prices are very similar - at least at the slowest speed option.

Here is Internode's NBN pricing (table provided by Internode):

Name	Port Speed *	30 GB	200 GB	300 GB	1 TB
Bronze	12/1 Mbps	$59.95	$79.95	$99.95	$149.95
Silver	25/5 Mbps	$69.95	$89.95	$109.95	$159.95
Gold	50/20 Mbps	$79.95	$99.95	$119.95	$169.95
Platinum	100/40 Mbps	$99.95	$119.95	$139.95	$189.95
* Port speeds noted here are the nominal NBN access port speed only, and are not necessarily indicative of the Internet data transfer speeds the services will achieve in practice.

In fact, Internode has used the same pricing for its 12Mbps NBN plans as it currently offers for its Easy Naked ADSL2+, or Easy Bundle ADSL2+ plans.

We've seen a few reports comparing the entry level NBN prices above to Internode's entry level plans, such as the 5GB plan. Keep in mind that the cost of that 5GB Internode plan - $39.95 - is cheaper, but it's dependent on you also factoring in a monthly phone service on top.

Other points of interest: users will be able to get an analogue voice line as part of the bundle, instead of VOIP. Uploads and downloads will be counted towards monthly usage, and users will be able to buy extra data blocks on demand.

NBN Co aims to connect 93% of Australian premises with fibre. The first trial services on the mainland were officially launched earlier this year in Armidale and four other locations. Satellite and wireless will be used to connect the 7% of premises not connected by fibre.

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petergaskin 21 July 2011	How can you compare the cost of something that doesnt exist in regional areas, when suddenly you have access to something new! I am sure regional users will be prepared to pay for the NBN given that they probably have a choice of dial up or wireless. Comment made about the PC & Tech Authority article: You'll pay more for NBN in regional Australia, warns ISP chief? The cost of using the NBN is likely to be more for regional users, argues Internode managing director Simon Hacket. Also, initial prices announced. What do you think? Join the discussion.
skipper_sams 21 July 2011	I presume the prices will go down when the whole network is finished. I mean, this is pretty expensive. The bronze plan is worse than what I currently get with ADSL2+ and more expensive. I thought the whole point of this was: "better internet, cheaper"
petergaskin 21 July 2011	dont forget, many users both urban and regional, do not currently have access to adsl2. in my case, adsl1 is the best i can get. i live too far from the telstra exchange to be able to get adsl. I do realise that it will be many years before i will get the nbn. who knows - the nbn might be irrelevant before it arrives where i live.
amcmo 22 July 2011	Th whole point was a poltical agenda, with those in cities subsidising those in the country for a supposedly incredible service. (not that I'm necessarily against that) Our head office is 10Km outside of a city and just too far from the exchange for ADSL2, though as we're not 'country' and not a large enough population to appeal to ISP's seems we're going to be at the back of the queue for nbn. Obviously in the interim Telstra aren't going to spend a cent on giving us ADSL2 (which they can do with newer mini DSLAM tech)
turbodewd 22 July 2011	The NBN is an expensive joke. Whats the purpose of letting people download movies even faster? People want real doctors, nurses and hospital beds - not IRC to one. Give us a fast rail service from Adelaide down around up and around to Bris via Melb, Canb, Syd. Far more useful i tell ya! And schools can play a pre-made DVD, schools have worked for years without fast internet.
vonkprop 22 July 2011	William, you've written an article about NBN. Why, on earth, would you have a picture of water pipes, at Tarraleah, that are part of the hydro-electric scheme in Tasmania at the top?
rubaiyat 22 July 2011	Let me stand in for Tony Abbott on this one and explain in simple language: turbodewd wrote: The NBN is an expensive joke. Whats the purpose of letting people download movies even faster? People want real doctors, nurses and hospital beds - not IRC to one.. No matter how much money we have "We can't afford it". Quote: Give us a fast rail service from Adelaide down around up and around to Bris via Melb, Canb, Syd. Far more useful i tell ya! No matter how much money we have "We can't afford it". Though we can afford much more expensive but less effective and slower freeways. Quote: And schools can play a pre-made DVD, schools have worked for years without fast internet. No matter how much money we have "We can't afford it". What we can "afford" is to have people travel huge distances for basic medicalcare, education and information and services. What we can "afford" is to have precious irreplaceable rural land and water resources turned into coalpits and salt marshes. What we can "afford" is to have vast amounts of our resources and returns on those resources repatriated overseas. What we can "afford" is to have "Free Trade" agreements that cost Australia billions and only benefit the foreign countries we are trying to curry favor with. What we can "afford" is to have mining executives wisely invest the windfalls from the mining boom on multi-million dollar weddings for their daughters, diamond encrusted iPhones and pug ugly MacMansions on the Swan River. What we can "afford" is to have those executives to reward themselves with huge bonuses and import cheap labor from overseas to increase their margins. What we can "afford" is to have those same executives purge precious jobs at the first sign of an economic downturn, leaving the rest of Australia to carry the can economically, whilst crying foul that Government policy applying a miserably low tax "will cost those same jobs". Then they invest in more mines that they say will disappear overseas. I hope you are getting the idea that what we can or can't afford has no bearings on reality in most of these arguments, more to do with "Nah, don't like it, never have, never will".
squinter_24 22 July 2011	I will just pick one comment, it's probably the one I got the most laugh out of. "And schools can play a pre-made DVD, schools have worked for years without fast internet." Schools worked for hundreds of years without telephones, power, libraries etc, etc.... (and some around this world still do) I understand your argument, but your conclusion.......seriously?
William Maher 22 July 2011	Hi vonkprop, it symbolises the NBN. Big pipes and all. Edited by william maher: 22/7/2011 04:58:36 PM
gnome 22 July 2011	Sounds like some political junkies are repeating their scripted roles here. Don't want to upset their story lines with a few facts, but let's try just one: NBN is not a federal budget revenue allocation item because the financing will be repaid from user charges. So, sorry boys, but all those lovely new schools, hospitals and railways you recite would be funded from the budget, so they are not affected by the construction cost of NBN.
vonkprop 22 July 2011	William, I have the same photo taken there a few years ago while I lived in Tassie for 6 years until recently. Hope the NBNs ones aren't full of water, or leaking like some of the wooden pipes they have not far from there.
kruler 23 July 2011	Hackett of Iternode is a bit famous for this, he has a history of playing the victem a bit to justify pricing models, thats why a chunk of his market share was eaten up by iinet, just because you say something even before a product is avaible doesnt give you carte blanche to do a little new product price gouging. Several other ISP's have said they will have a uniform pricing model so whats really up with Mr Hackett @internode, because ive seen the price modeling on a far bigger ISP and they have a uniform price mode so what are they doing that you cant afford or are able to do, so you find yourself having to bleet bleet to justify your actions...
ory_zm 25 July 2011	Internode has never been price competitive, even their own reps say "you pay for the service". And besides, have not seen what alternative Mr. Hackett is offering exactly. PS - I live in the CBD area, 4km from the exchange and cannot get past 2Mbs (although supposedly paying for ADSL2+), so am dying for the NBN to be available
amcmo 25 July 2011	An article in The Register (UK on-line IT news)pointed out that this is one of the highest price suppliers and suggested that the reality for almost all homes and small businesses will be substantially lower, even for a fairly top grade service. While I'm dying for better service I still believe the way our gov't has gone about it will no doubt end up costing twice as much as it should and will take twice as long to arrive, but still better than being stuck in the horse and cart of ADSL1/2. Guess that's what happens when pig-headed politicians (State or federal) bulldoze something through without truly competitive tendering and proper oversite. Not to forget the special pork-barrel deals to get certain independents to sign on. I just know 5 years from now while while everyone's back-patting over how great it is, we'll still be waiting, seeing as we're in that dead zone of not city, not country.
sandsw 27 July 2011	The idea was to have standard wholesale (not retail) prices for country and city - and the assumption is that market forces will keep the retail costs to a "sensible" level. So if the retail costs vary widely, blame the ISPs not the Govt.