One of the most prolific myths surrounding the NBN is that it will be too expensive to have an NBN connection, particularly for low income earners.
As NBN retail pricing has been gradually released, we have seen a number of disingenuous and misleading statements from the Liberal/National coalition, particularly from MPs Malcolm Turnbull and Paul Fletcher.
First, we had Malcolm Turnbull attack Internode’s NBN pricing as being too expensive, despite the fact it was identical to their own ADSL2+ pricing, and much cheaper than any ADSL2+ pricing going through Telstra’s network.
Shortly after, the coalition’s attack was dealt a seemingly serious blow when Exetel released their pricing, offering plans that not only drastically undercut Internode, but also included an entry level some 30% cheaper than the cheapest copper-based phone+ADSL service from anyone.
Meanwhile another ISP, DoDo, announced that their NBN pricing would also begin at “below $40”. Amazingly, the response from Paul Fletcher was to attack the “discount ISPs” in Parliament! This drew a stinging rebuke from the CEO of DoDo.
A further blow to the Coalition’s myth appeared with the release of NBN pricing by Australia’s number three ISP, iiNet. iiNet’s pricing was slightly lower than their copper at the entry level, and considerably cheaper than either Exetel or Internode’s high-end NBN pricing. The pricing was also drastically lower than Telstra’s current phone and broadband services.
So what was the Coalition’s response? While Malcolm Turnbull sensibly remained quiet, Paul Fletcher issued a truly bizarre press release, which not only made ridiculous pricing comparisons at the low end, but actually criticised iiNet for high-end plans that were too cheap!
I kid you not. The coalition have so far attacked NBN retail pricing for being too high, too low and in the middle. One wonders what they would be happy with.
Here’s a example of misleading figures from Fletcher’s press release (Emphasis mine):
“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…iiNet’s entry level NBN product will cost $49.95 a month, for speeds similar to today’s ADSL2+ broadband (12 megabits per second down and 1 megabit per second up) – with a download limit of 20 gigabytes in peak times and a further 20 gigabytes in offpeak times. Today, iiNet’s entry level naked DSL product costs $69.95 but offers download limits which are two and half times higher, at 50 gigabytes peak and a further 50 gigabytes off peak.”
This is an absolutely ridiculous comparison, because iiNet also offer a $69.90 NBN plan. That is, a plan that is the same price as their entry level Naked DSL plan. What’s more, the NBN plan includes double the amount of data compared to their Naked DSL plan.
In other words, it is impossible for an iiNet NBN customer to be worse off than an iiNet Naked DSL customer. iiNet have simply added a much cheaper option to their product list. As is made quite obvious from the table below, iiNet’s customers therefore have the choice between paying 15% less per month on the NBN for a entry level plan, or paying exactly the same as they do now but getting double the included data:
For a more complete comparison of copper versus NBN pricing, see the table below. It compares iiNet’s NBN and copper services, plus Exetel’s NBN services (budget NBN), TPG’s copper services (budget copper) and Telstra’s copper and cable services (Current market leader). Note that because Internode have now announced they will be reviewing their NBN pricing, I have not included them in this comparison.