Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

What can we expect from retail pricing on the National Broadband Network? According to the Prime Minister, we can expect lower prices. She told the House of Representatives last year:

Do you want families in your electorate to have the benefit of more competition, better broadband products and lower prices? Then tick the National Broadband Network.

She also told the House of Representatives:

… look at the fact that Australians pay high prices for broadband and to look at the fact that the industry is telling us—and the Tasmanian example bears it out—that by creating a model with retail price competition you get cheaper prices, because that is what competition is all about.

She also told us last year that Australians pay very high prices for broadband by world standards. In other words, a very clear message from the Prime Minister: the National Broadband Network will bring cheaper prices. It will bring lower prices once you start to get retail prices being announced.

During the winter recess, we did see retail prices being announced. Internode, one of the larger internet service providers in Australia, announced that it would be charging $59.95 a month for its entry-level product, which is a 12-megabit-per-second product with a 30-gigabyte-per-month download limit. Interestingly that is the same price as it charges for its current naked DSL offering also with a 30-gigabyte download limit. As you would be aware, Mr Speaker, DSL products offer speeds of 20 megabits per second down, depending upon how far from the exchange you are. What one can say is that the closest equivalent to the 12-megabit entry-level offering is today's ADSL offering—$59.95 in today's world from Internode, $59.95 on the NBN—a very long way away from prices being reduced for retail broadband services as the Prime Minister claimed, in the House of Representatives last year, we could all expect.

Interestingly what we also saw from Internode was that the top-end price went up. Their top-end price today for a naked DSL product with a 1,000-gigabyte or one-terabyte download limit per month is $149.95. The top-end product in the NBN world which will have 100 megabits of speed and also a one-terabyte download limit is now $189.95 a month. Any suggestion that broadband prices are going down seems to be at odds with the prices that have been announced.

This left Senator Conroy, the Minister for Broadband, Communications and the Digital Economy, in a bit of a pickle. How was he to reconcile the actual pricing that had been announced and the claims of the Prime Minister last year? His solution was to leap upon some announcements by Exetel and Dodo, two other internet service providers. Exetel put out pricing and Dodo, to use the words in Senator Conroy's media release of 23 July, has 'mooted a sub-$40 price' although we have seen no more than that.

The key point I want to make is that it is quite wrong to argue, as Senator Conroy has done, that, because internet service providers who are acknowledged to be discount operators at the discount end of the market are offering lower prices than Internode, that proves that National Broadband Network retail prices will be lower than today's broadband prices. It is a non sequitur. The reality is that Internode has a market share of nearly three per cent whereas Exetel has only about 0.9 per cent in market share. It is true that Dodo have a similar market share to Internode, but we have not seen any actual pricing from them yet. It has simply been 'mooted'. I make the point that while there is nothing wrong with being discount operators, as Dodo and Exetel are, the Telecommunications Industry Ombudsman reports that over the period October 2010 to March 2011, 4.5 per cent of its complaints concerned Dodo although it had a market share of 2.9 per cent. I simply make the point that the reality based upon the prices which have now been disclosed by several operators is that there is no evidence at all for the belief, that the Prime Minister articulated, that the National Broadband Network is going to mean reduced prices for broadband services. In fact, on the contrary: what the pricing that has been released demonstrates is that consumers can expect, at the very best, prices to flatline and in reality they are going to increase.