NBN: Price relief urged as more than 11 million premises can connect

The government has evidently decided now is the time to be talking up the national broadband network despite fears it can’t cope with increased demand and is becoming increasingly unaffordable.

Jack Gramenz

5 min read

March 23, 2020 - 9:15PM

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Amid concerns the national broadband network won’t be able to cope with a surge in people working from home on residential plans that are unaffordable and not designed to cater for the traffic, the government is talking up its latest milestone.

Meanwhile consumer groups are calling for the internet to be made more affordable as those who aren’t lucky enough to work from home instead lose their jobs entirely.

The Australian Communications Consumer Action Network (ACCAN) has called for the government to fast-track a plan to provide cheaper concessional internet to low-income Australians and the unemployed.

It proposes a wholesale price for a 50Mbps connection of $20, giving telcos the ability to sell that on to qualifying customers for $30 a month, around half the full price of a similar plan.

“The fact is that a reliable broadband service is now a vital utility in our everyday lives,” said ACCAN CEO Teresa Corbin.

“We’re seeing more and more people being asked to work or study from home each day, but that’s simply not possible if they can’t afford to be online.”

She added the concession would become more important if the economy continues its downturn, and families already struggling with the cost of living could soon have to choose which utilities to keep on.

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ACCAN is calling for a cheaper, concessional NBN plan to be brought in as soon as possible.

While the cost of connecting the internet is tossing up some difficult decisions for some Australians, the government is satisfied that at least more of us have the option of connecting.

This morning Communications Minister Paul Fletcher released a statement announcing more than 11 million homes and businesses are now able to connect to the network, but far fewer have.

Around 6.8 million premises have active connections.

There’s also a chance people trying to connect to it right now will face long waits depending on what advice is given to the contractors who hook up individual properties to the network.

The corporation in charge of the national broadband network said it’s still connecting between 30,000 and 40,000 premises weekly but that could change at a moment’s notice.

“NBN Co is continuing to roll out the network unabated, however we are mindful that the situation is changing day-by-day, so we are on a watching brief in regard to our future schedule of works,” an NBN spokesperson told news.com.au.

“Our top priorities are the health, safety and wellbeing of our employees; and supporting the community by maintaining and assuring the performance of the existing NBN access network.

NBN has also reached an agreement with Telstra to postpone any disconnections from legacy networks.

Normally the old network is switched off 18 months after NBN becomes available, but the two companies have agreed to suspend all disconnections until at least June 30 as a precaution.

“We are also working with retailers to provide priority assistance to those more vulnerable customers within the community, such as those who rely on Medical Alarms,” the NBN spokesperson added.

Fibre optic cable powers the national broadband network but for plenty of customers it doesn’t come anywhere near your house.

In the statement this morning, Communications Minister Paul Fletcher said the rollout is nearing completion.

“The Coalition Government’s commitment to a fast, efficient delivery of the NBN means that today the rollout is more than 95 per cent complete, with 30,000 to 40,000 additional connections made every week,” Minister Fletcher said.

“Around 6.8 million homes and businesses across Australia now have an active NBN connection, with 67 per cent of existing customers and 80 per cent of new customers choosing retail plans with peak speeds of 50Mbps per second or higher.”

“Fast” and “efficient” are not words often used to describe the NBN by the people actually using or struggling to use it, and a recent surge in the number of people working from home on residential plans not designed to cope with the increased traffic has prompted fears the network could become over capacity.

Some have expressed confusion about this, given the impression that the internet is the internet and there should be no difference between using the NBN at work and using it at home.

But the difference is that enterprise NBN plans, primarily used by big businesses who are now asking tens of thousands of their employees to work from home, usually come with higher bandwidth, which lets more people get faster internet speed at the same time.

In contrast, as a residential customer you purchase access to the NBN through a retail service provider, which can be big telcos like Telstra and Optus or small providers like Aussie Broadband or SpinTel.

They purchase wholesale access to the NBN as well as “CVC” more understandably referred to as “capacity”.

Ideally they purchase enough capacity to service all their customers to deliver the advertised speeds but that doesn’t always happen.

To combat the surge of more people working from home, there’s been a couple of changes to that arrangement.

NBN has agreed to waive the charges for additional capacity up to 40 per cent for at least the next three months, from Monday.

“The additional capacity pricing relief will be offered to RSPs at no additional cost and will help support significantly greater data use on the network throughout the day and during peak evening times,” NBN CEO Stephen Rue said.

Already increases of 5 to 6 per cent have been detected on the network.

NBN engineers have been studying the data consumption patterns of countries hit hard by coronavirus, including Italy.

Then Communications Minister Malcolm Turnbull, now retired Liberal MP Craig Laundy and current Communications Minister Paul Fletcher checking progress on the NBN in Homebush.

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While talking up its success on Monday, Mr Fletcher also claimed the NBN was a “failing project” when his party took over in 2013, evidently thinking the start of a one-in-100-year pandemic that is disrupting the normal flow of society is the time to score political points on internet infrastructure (after all the next federal election is right around the corner, due a mere 29 months from now).

He cited figures that “barely more than 50,000 premises connected to the fixed line network” at the time his party came to power.

Those premises were in sparsely populated regional areas where the NBN was rolled out first in order to give them similar digital capabilities to Australians in major metropolitan areas, which were previously well serviced by the telcos.

At this point the network has spent more time under his party’s stewardship than it did under the Labor government he has accused of “failing” it.

In that time connection technologies have been changed to inferior options (95 per cent of underperforming services are on fibre-to-the-node connections that were originally abandoned by Labor before being reintroduced in the multi-technology-mix the Coalition took to the 2013 election). The cost of the network has blown out to more than $50 billion, and Australia’s internet speed has consistently dropped in global rankings, now sitting behind countries like Vietnam and Kazakhstan.

These are all better indicators of the network’s success or failure than how many premises are able to connect to it, and could be the part of the reason why 4.2 million premises that could be connected to the NBN still haven’t been.

But because it was the opposite party’s idea the government will continue using that as an excuse to blame them for its failings while taking credit for its rare accomplishments.