NBN Co Responds to Criticisms of NBN 500 Upgrade

NBN Co Responds to Criticisms of NBN 500 Upgrade

The NBN Co has responded to criticisms from telcos from Aussie Broadband and TPG Telecom regarding its proposed upgrade for fibre-connected homes to enable the popular ‘Home Fast’ NBN 100 plan to achieve speeds five times what they are currently capable of, naming it NBN 500.

Gizmodo Australia reached out to NBN Co on Wednesday to ask for the company’s response to criticisms of the proposal from these telcos.

In terms of criticisms, there are three main concerns that these NBN providers have. Firstly, they are concerned this upgrade could widen the ‘digital divide’ between fibre and non-fibre homes (particularly those in regional Australia), wouldn’t have any greater incentive for competition, and wouldn’t improve service for customers on NBN 25 and NBN 50 connections.

NBN Co responded to Gizmodo Australia via email on these criticisms.

Will NBN 500 widen the ‘digital divide’?

In a statement to Gizmodo Australia, Aussie Broadband said that while this announcement is “exciting”, it is essential that this proposal is “paired with more investment in fixed broadband for regional Australians so the digital inclusion gap isn’t widened further.”

Aussie Broadband is well in its right to question these changes as internet service in regional and rural Australia is inconsistent in quality compared to the coverage in the cities. NBN Co has noted this concern and told Gizmodo Australia it’s currently engaging in a range of other upgrades that should improve internet quality outside of Australian cities.

“NBN Fixed Wireless, provides NBN coverage to approximately 700,000 premises, many of which are in regional Australia. We are well-progressed with a $750 million to upgrade our Fixed Wireless network, using the latest 5G mm Wave technology to deliver faster speeds and we will soon launch two new high-speed plans,” an NBN Co spokesperson said, referencing plans to upgrade internet quality for fixed wireless customers (our friends at WhistleOut did a great explainer on this in November).

NBN Co said it is proposing to launch two additional fixed wireless wholesale high-speed tiers.

“Fixed Wireless Home Fast is planned to increase from a potential peak speed of 130/20 Mbps to 250/20 Mbps and it is estimated that this product will be available to around 90 per cent of the NBN fixed wireless coverage area. Fixed Wireless Superfast would increase from a potential peak speed of 325/20 Mbps to 400/40 Mbps and it is estimated that this product will be available to around 80 per cent of the NBN fixed wireless coverage area. Subject to industry consultation, we plan to make these two enhanced speed tiers available from mid-2024,” the NBN Co spokesperson added.

NBN Co said its network is currently capable of servicing 12.4 million homes across Australia, 11.3 million of which are on the company’s fibre-based network, and 8.4 million of which (expected to grow to 10.2 million this year) are currently capable of reaching the highest plan speeds (including homes eligible for fibre upgrades). The company claims that “around half” of the homes it can service are in regional Australia.

Will NBN 500 stifle competition for smaller providers?

In Aussie Broadband’s criticism, the company said it wanted to understand the impacts these changes will have on competition.

“By switching customers over at the wholesale level, smaller RSPs may miss out on the opportunity to compete for those customers which could harm retail-side innovation in the Australian broadband market,” Aussie Broadband said in a statement to Gizmodo Australia.

In response to that particular concern, NBN Co said it aims to add “industry-wide value” by enabling retail service providers (RSPs), like Aussie Broadband, to build more customer value into their plans at no additional wholesale cost.

“This will help increase the desirability of high-speed tiers for which RSPs do not pay variable NBN capacity charges (CVC), providing greater wholesale pricing certainty, whilst delivering a better experience for their customers,” NBN Co said in its statement.

The NBN highlighted the importance of industry-wide consultation, calling it “absolutely fundamental”.

“Critical to the success of the proposal will be internet retailers’ ability to transmit the higher wholesale speeds across their retail networks and ensure in-home equipment, such as modems and Wi-Fi routers, are capable of delivering the full benefits to customers,” the company said.

“NBN Co will be seeking retailer feedback on what in-home equipment will be needed to bring the increased speeds to market.”

The company added it conducted a webinar with NBN providers on March 5, to best describe the changes it’s looking to bring in.

“The proposed speed increases will build on our fibre upgrade program, and we are on target to enable 10.2 million Australian homes and businesses, or 90 per cent of NBN’s fixed line network, to access NBN Home Ultrafast (NBN 1000) by the end of 2025, and our proposal is to offer wholesale download speeds of 750 Mbps to close to 1 Gbps,” NBN Co spokesperson said.

Why are NBN 25 and NBN 50 unaffected?

One of the biggest criticisms of the NBN 500 upgrade is that it leaves NBN 25 and NBN 50 plans unaffected. In its criticism, TPG aimed at NBN Co, saying the changes wouldn’t affect the some 70 per cent of customers on those lower-speed plans, and “In this cost-of-living crisis, it would be disappointing if only those with the financial means to access high-speed NBN plans reaped the benefits of these upgrades.”

NBN Co has responded by referring to the wholesale costs it offers to NBN providers for those plans.

“Our 100/20 Mbps product has seen a $3 wholesale price reduction to $55; our 250/25 Mbps reduced by $8 to $60, and our 1000/50 Mbps reduced by $10 to $70… Our standard NBN 50/20 Mbps product is available to RSPs at a $50 wholesale ‘floor’ price, and we have increased CVC (capacity) inclusions by 34 per cent.

“The wholesale price of our 25 Mbps wholesale product was [reduced] to $26, and the 12/1 Mbps wholesale product was reduced to $24.40,” the NBN Co spokesperson said.

Additionally, NBN Co referred to the demand it’s seeing for its highest tier plans, “with around 7,000 orders per week from customers across Australia wanting to upgrade to our full fibre, high-speed tiers.”

Speaking directly on why a speed boost won’t be coming to NBN 12, NBN 25, and NBN 50, NBN Co said it wants to maintain “a diverse range of products at different price points to cater for different customer demands and budgets.”

The company also quoted the ACCC from 2023, which said that the changes brought by the company’s Special Access Undertaking last year were “in the long-term interests of end users”.

So, where are we headed?

NBN Co hopes that changes related to its plan to effectively turn NBN 100 into NBN 500 will be introduced within 12 months. For now, though, the company is engaging with NBN service providers on whether it should change anything about the proposal, which wraps up on April 19.

We may see this plan change over the next month, but as it currently stands, NBN Co has made a strong case for it. NBN power users, like myself (for games, 4K streaming, and working from home) will see huge benefits if it’s executed ideally. Whether or not it’ll lead to greater costs for the consumer, leave smaller NBN providers hurt, or widen the ‘digital divide’ are factors being considered.

Image: Gizmodo Australia

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