The hits keep on coming for Australia’s beleaguered $51 billion National Broadband Network (NBN), with a parliamentary inquiry told that the NBN has put an “artificial handbrake” on fast download speeds, raised the price of accessing the internet, and repeatedly failed to meet its own revenue targets:
The latest NBN complaints came at the first public hearing of a Joint Standing Committee inquiry into NBN’s business case and services to small businesses.
Vodafone chief strategy officer Dan Lloyd spearheaded a charge for changes to the NBN’s pricing structure, saying users were being slugged too much to access broadband and particularly high-speed plans.
“Our view, which is shared by many others in the industry, is that NBN’s CVC charge is a speed tax on NBN customers and it must be abolished,” he said.
“There are many open-access fibre networks in the world but only NBN has sought to introduce an artificial handbrake on the performance of its network.”
Mr Lloyd said the price of delivering broadband at the “same speed” to customers over the NBN had increased by 50 to 60 per cent since 2011, and as many as 40 per cent of Australia’s internet users would consider using a mobile service, such as 5G, if high prices remained.
“If costs continue to go up for retailers to sell the same speed service on the NBN, the industry will find substitutes to meet the increasing customer demand for broadband, including 5G,” he said.
Meanwhile, the latest quarterly broadband speed data from Ookla has ranked Australia 64th globally, landing it in the same realm as Uruguay, India, Kazakhstan and Vietnam:
First, here’s the global average rankings…
Our services deliver an average of 42.2Mbps/19.70Mbs and rank a lowly 64th globally. This lands us in the same realm as Uruguay, India, Kazakhstan and Vietnam…
Even if the vast majority of homes did get a full 100Mbps downstream, that would only land Australia in 26th place or so on the global rankings.
This highlights that not only are we living in a hyper-connected world, but our infrastructure is also sub-standard and we’re not catching up. If anything, we’re falling behind as other economies catch up and eclipse our woeful NBN speeds.
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According to RMIT’s Associate Professor of Electronic and Telecommunications Engineering, Mark Gregory, Australia needs to spend another $16 billion to repair the NBN so that it is fit for purpose:
RMIT’s Dr Mark Gregory has estimated the potential cost of repairing the discredited MTM at around $16 billion. Internet Australia chair, Dr Paul Brooks, argues that the replacement process should begin pretty much straight away once NBN Co cries “mission accomplished” in June this year – the scheduled completion date for the MTM-based rollout.
Swinburne’s Dr Steven Conway agrees with Brooks that while it will be expensive fixing the NBN must be done without delay.
He told New Daily:
‘When you compare us to any other first-world country, in terms of the speed at which data can move and the amount of data we have to move, we’re going to be left in the dark ages.’
That would take the NBN’s cost to nearly $70 billion.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
