Internet Australia chief Laurie Patton has described the Federal Government proposal to levy telcos to compensate the NBN for “increasing losses being posted on its fixed wireless and satellite services” as robbing Peter to pay Paul.
Patton, a frequent critic of the NBN and its “inferior copper-based network” that is not delivering on customers’ expectations, says the levy is proposed at a time when Australians already pay high Internet access charges by global standards.
The Government’s proposal to place a $7 per month levy on users of fixed-line broadband services capable of 25Mbps from July next year, is contained in draft legislation released on Monday and forms the basis of a planned new Regional Broadband Scheme (RBS).
Patton restates IA’s previous statements drawing attention to the poor marketing of the NBN and highlighting the “mixed experiences” of customers signing up with the network.
{loadposition peter}According to Patton, there are two things basically holding back the NBN.
“Firstly, they continue to build an inferior copper-based network that is not delivering on customers’ expectations. The second is they have not effectively collaborated with their re-sellers (RSP’s) to convince enough people that they should move to the NBN”.
And Patton notes NBN Co’s recently published progress report that the majority of customer connections are still being taken up on the lower speed tiers.
“In the market we are hearing that RSP’s are reluctant to encourage their customers to opt for the higher speed packages because of the wholesale cost structure imposed by NBN which is weighted against the delivery of higher speeds. They are also wary of copping complaints from customers who don’t receive the speeds they’ve been promised.”
“The NBN report also points to a low level of consumer take-up. While 3.2 million premises have been ‘passed’ and are ready for connection only 1.4 million customers have so far been signed-up. “
According to Patton, a significant factor appears to be a commonly held belief that the NBN is not delivering on advertised speeds. “If you scroll through the online site Whirlpool and more general social media sites you will see many reports of dissatisfied NBN customers,” he says.
“We’ve heard stories of people moving to the NBN only to find they’re getting slower speeds than when they were on ADSL”.
“There are many possible reasons for this, and some of those reasons will not be related to the NBN infrastructure, but in many cases the user will not be able to work out where the problem is. Regardless, the user will rightly or wrong assume it is the NBN that’s the problem.
“They don’t need to work out the relative costs of building an inferior copper-based network verses at 21st Century fibre-based one. In the end the cost of rebuilding the copper service will be considerably more than the differential.
“If NBN keeps deploying FTTN it will face a gigantic upgrade bill in 10-15 years' time, if not sooner, when they finally concede that FTTN is not a long term option. Therefore, any costings about the various technologies would be largely superfluous right now frankly”.
“How will the government of the day go trying to sell a business that owes it circa $20 billion and needs a massive capex injection to rebuild 30-40% of the network?” Patton concludes.