Internet blame game
The real reason your NBN is slow
AS THE blame game over Australia’s internet woes has reached fever pitch in recent weeks, the rollout of the National Broadband Network remains haunted by an old challenge, experts say.
The mandate for the NBN to become financially viable and pay back the money spent on the rollout to government coffers is at the heart of the controversial pricing structure that the NBN wholesaler charges to retailers – and seen by many as responsible for the issues experienced by end users who have moved onto the network.
NBN Co. says internet service providers aren’t buying enough bandwidth on the network for their customers, leading to congestion and slow speeds. Meanwhile ISPs like Telstra, Optus and TPG have been highly critical of the high costs levied against them.
While the NBN Co. and internet service providers point the finger at each other, ultimately the blame for the problems should be laid at the feet of government, says telecommunications consultant Paul Budde.
He believes there is a social value to the project that should be absorbed by the government, reducing the need for complex and expensive pricing models which he sees as “the core of the problem.”
“It is interesting but sad to see the blame game that is going on in the telecoms industry. As with so many of the NBN problems, at the core it is a problem created by politicians,” he wrote in a blog post.
“This one goes back to the original NBN policy, as it was the Labor government who created the CVC monster.”
As a wholesaler the NBN charges ISPs a fee to access the network and another fee depending on how much bandwidth they want to purchase for their customers, known as the Connectivity Virtual Circuit (CVC) charge.
The government is also planning on introducing a broadband tax to help pay for the regional portion of the rollout, slugging ISPs with a roughly $7.30 fee per end user, per month. As a result, Australians are facing some of the highest broadband prices in the world.
“The problem of course for the Labor government and the Coalition government was: how on earth can we finance this whole thing to actually get some money back in the kitty,” Mr Budde told news.com.au.
He helped organise industry consultation with Labor’s then Communication Minister Stephen Conroy in the early stages of the NBN project.
“I’m not saying it’s an easy to solve issue but my argument from the very beginning – back in 2005 – has always been this is not just about internet access. This is also national infrastructure that can be used for education, healthcare, smart cities, smart buildings, you name it,” he said.
“So there is also a national interest value, a social value to the whole thing that doesn’t show up on the balance sheets of the NBN or the ISPs.”