NBN a Large Step Backward for many online Australians

NBN a Large Step Backward for many online Australians, by Anthony Klan.

Millions of Australians will see their internet speeds fall when they are moved on to the National Broadband Network, despite still being charged the same for access.

The cost structure of the superfast internet project — required in order to pay back the federal government $49 billion in construction costs — has meant ­telcos are being charged very high prices for downloads.

These high bandwidth charges — tiny under the nation’s existing Telstra and Optus broadband networks — has meant telcos are buying the minimum, resulting in NBN speeds plummeting during peak times, such as after 5pm on weekdays.

NBN Co has been forced to levy the high bandwidth or “CVC” charges in order to pay back ­the money it has borrowed from the federal government to build the massive project.

Under the NBN, every home will be connected to broadband internet, with many regional and rural users to get vastly improved internet services.

But the cost of providing those services to regional Australia is being borne by the millions of city residents on the existing Telstra and Optus networks who are being forced on to the NBN where peak time speeds can fall to as low as 1/40th of what they now get.

Internet users have inundated the websites of NBN providers, ­including Optus and Telstra and industry sites such as Whirlpool, after finding their NBN connections are far slower than the speeds they achieved previously.

Paulo Felipe wrote on the Optus website that he was achieving speeds of just 1/100th of what he had paid for. …

To recoup the huge costs of building the network, NBN Co charges telcos between about $10 and $14 for each 1Mbps of bandwidth they buy, depending on the quantity they purchase. Because of this high cost, most telcos are buying just 1Mbps for each customer on a 25Mbps plan.

They are able to do this ­because not everyone uses the ­internet all the time — at very low usage times such as 4am a user can expect to achieve the 25Mbps rate. But at peak times speeds plummet to as low as 1Mbps. …

“Simply put, they don’t purchase enough bandwidth from the NBN,” he said. “They buy enough for 10 people but sell it to 100 people, so at peak times it’s useless.” …

There are about 1 million homes connected to the Optus and Telstra networks across the capital cities, except Darwin and Hobart.

Those networks did not suffer from high CVC charges or similar bandwidth issues because Telstra and Optus owned the networks which they completed in the mid-1990s and had paid off.

Those networks were also much cheaper than the NBN ­because they focused on only high-density capital cities. …

Rudd contracted the Australian Government to spend $5,000 per household, where just leaving it to the market would have resulted in no extra costs over time, as improvements would be paid for out of normal ongoing fees. On top of that, 5G means it will be obsolete almost before it is delivered. This is an area much better left to the market.

“Do it once and do it right” said Parliamentarian Tony Windsor on the ABC’s Lateline program some years ago. Nice enough bloke, but close to an idiot when it came to computer stuff, so I found it intensely annoying that he was so keen on and pushing the NBN so regularly on the program when he didn’t even have a computer on his desk or use one for his work.

Now, the chickens are coming home to roost.