NBN Co explains pricing model on Whirlpool

  • NBN takes to online forum
  • Addresses claims made by Internode
  • NBN to cover 93% of homes with fibre broadband

Following industry criticism of the National Broadband Network’s (NBN) pricing model, NBN Co has taken to Australian technology forum Whirlpool to defend its pricing.

NBN Co’s spokesperson Scott Rhodie posted an extensive explanation of the wholesale pricing, which has already attracted almost 40 pages of comments debating the subject.

Internode managing director Simon Hackett was one of the first to criticise the current pricing model, claiming that if you weren’t one of the major ISP’s, you wouldn’t survive financially once the NBN is in place.

In the new post, Rhodie explains two types of charges for the Retail Service Providers. The first is a basic per-user charge for connecting customers to the NBN, and the second is a charge which is based on a customer’s data usage. Hackett argued for the first charge to rise, and he argued for the second charge (based on data usage) to be lowered.

However, Rhodie claims that the data charge is predicted to decrease, given that customers would be using more data because the network is much faster than what customers currently use.

"We've tried to make the balance such that even more end-users will come on and purchase higher speeds than we have predicted, which will then enable us to even further lower the usage (and possibly access) charges," he said.

Rhodie also argued that the model was similar to what DSL customers have now, and it will make it easier to shift customers over to the NBN. It is also the model that is used in other markets around the world.

According to Rhodie, major providers such as Telstra, iiNet and Internode will be paying $24 per month for customers with a 12Mbps downstream connection and a 1Mbps upstream connection.

Quigley had recently commented on NBN Co’s initial challenge of confronting the public directly on NBN-related matters, however it appears now the company in charge of implementing the new infrastructure are beginning to engage with Australians who are paying for the network. 

While many Whirpool members thanked Rhodie for entering the conversation, many also voiced their concerns regarding the proposed pricing model. One user asked:

“One concern I have is the ‘NBN’ cost of internet for low income earners on budget phone/internet plans. There are ~ 700,000 people on dial up, many using it sparingly just for the odd email. A dial up plan can cost as low $9.95 and the cheapest Telstra land line ‘retail’ plan is lower than the wholesale NBN cost from what I know. Does the NBN/Govt have provisions in place for low income earners to transfer these budget phone/internet plans to the NBN?”