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The NBN has arrived! … But is it everything they promised?

Article By James Mills | | Technology Consulting

Recent figures released by the NBN Co show that they have hit their stride in connecting more and more premises to the network – achieving a 122% increase over the number of connections in the 2016 Financial Year. This has resulted in more and more individuals and business being contacted by the company, offering them the opportunity to get on board the NBN.

Unfortunately for most however, that ‘offer’ is delivered more in the form of a ‘threat’ – using fear-mongering to suggest that if no action is taken immediately, then you will be cut-off from the world by losing access to your phone lines and internet. Obviously in this day and age, both of these are a necessity, which results in individuals and businesses alike jumping head first into a Contractual Agreement for something that, for a lot of Australians, is not fit for purpose.

The primary reason for this stems back to a price war between NBN Co and the Retail Service Providers (Telstra, Optus, iiNet, TPG, etc.) whereby the RSPs are competing with each other on price in order to gain the largest market share – and in doing so are setting their prices below that which NBN Co believes the average consumer will pay. Because of this, NBN Co refuse to drop their wholesale charges for backhaul bandwidth – the data pipe NBN Co sells to the RSPs to allow them to use bite sized chunks of its overall network capacity for their customers. Since the RSPs have to drop their costs somehow in order to compete, they are instead reducing the amount of backhaul bandwidth that they purchase.

As a result, instead of coming out on top by having a great value internet service, end-users are the ultimate losers in this war – as the lack of backhaul bandwidth being purchased by their RSP means they will never hope to achieve the heavily advertised ‘Up to ##Mbps’ internet speeds. In fact, in the figures released by NBN Co, it has been revealed that for every 25Mbps plan sold by an RSP, on average only 1Mbps of backhaul bandwidth is actually being purchased.

This is the primary reason why complaints about the NBN to the Telecommunications Industry Ombudsman have risen exponentially, and online forums and message boards are full of users rightfully pointing out their internet speeds were better when they weren’t on the NBN. It has been such a let-down to the community as whole in fact that the ACCC has taken steps to not only establish a $7M broadband performance monitoring program, but has also given guidance to drop the ‘Up to’ and ‘Maximum Speed’ claims of Broadband plans, and instead detail the typical minimum speeds during peak periods.

Unfortunately though, until these guiding principles are adopted, and the pricing war is over, the NBN is a serious gamble for anyone who relies on their internet connection in order to conduct their business. Whilst the costs of a dedicated, symmetrical link are a fair bit higher than those being touted by the NBN – the benefits of having an uncontended link operating constantly at the maximum speed your budget can afford is worth far more than any perceived subscription savings.

If you would like to review your internet connection options, or need assistance or guidance regarding the NBN and its implications, contact the Altitude Innovations Team.