NBN: Some bush users to attract higher charges under new pricing as fixed wireless limitations bite

Updated

The fastest internet access in the bush is set to attract higher charges than in cities under new pricing being considered by NBN Co.

Key points: NBN Co considering new wholesale pricing for fixed wireless

50Mbps plan would cost more on fixed wireless than on fibre

Fixed wireless network provides access to 240,000 Australians mostly in regional and semi-rural areas

The proposal means telcos ordering a 50Mbps connection for a fixed wireless customer would face a "slightly more expensive" charge compared with the same plan for a customer on a fibre service, according to an NBN Co spokeswoman.

Although satellite services have always been priced differently, such a move would end the tradition of equivalent pricing across NBN fibre and fixed wireless networks.

The fixed wireless network is located mostly in regional towns and rural areas.

NBN Co introduced new, simplified charging for retailers at the end of last year that provided a discount when telcos ordered a 50Mbps, high-bandwidth plan for a fibre customer.

This was done to encourage retailers to purchase enough bandwidth to adequately service their customers.

Now NBN Co wants to bring a similar, simplified approach to the fixed wireless network.

However, the 50Mbps plan is set to be more expensive, reflecting the limited capacity of the wireless technology.

Phillip Britt, managing director of regionally-focused provider Aussie Broadband, said the proposed pricing would result in charges being 44 per cent higher on fixed wireless than the equivalent fixed line service.

He said that the NBN needed to remain true to its purpose of reducing the digital divide between city and country.

"It would be fair and equitable to have the same pricing across both fixed line and fixed wireless," he said.

NBN Co's spokeswoman noted only 9 per cent of fixed wireless users are on 50Mbps plans.

She highlighted that the pricing changes — if ultimately delivered — would actually bring a reduction in average access costs for most fixed wireless users "depending how internet and phone providers manage their high data usage customer base".

It will be up to providers to set retail prices once NBN Co confirms the pricing in coming months.

Big country, big dollars

NBN Co describes its purpose as "helping bridge the digital divide between city and country".

Its pricing is set so that metropolitan users pay about $7 per month more than they otherwise would to ensure comparable regional services are offered.

But the technology used in the fixed wireless network means it is less capable of handling a large number of users compared to services connected via fibre.

NBN Co is considering restricting the use of fixed wireless by heavy users during peak times, and the proposed pricing has been set with the limitations of fixed wireless in mind.

In May, Tom Roets from NBN Co said the goal of the pricing changes was to "provide end-users with the best utility from the available fixed wireless network capacity, so they can get a better experience".

NBN Co chief executive Bill Morrow told a parliamentary committee earlier this month that it would cost $1 billion to double the minimum speed fixed wireless users can expect during the busy evening period.

Mr Britt said NBN Co needs more funding to increase the capacity of the fixed wireless, and that "the onus should be on government" to provide this money.

A $10 billion conundrum

Communications Minister Mitch Fifield said the pricing consultations "aim to improve the economies of scale for fixed wireless retailers so that services can be made more affordable, not less".

He said affordable broadband for all Australian homes and businesses, including those in regional areas, "is a priority for the Coalition Government", and noted the Government had introduced a bill for a regional broadband scheme.

This, if passed in Parliament, will levy providers in cities who are in competition with the NBN to help fund satellite and fixed wireless services.

The Government has estimated these regional NBN services will lose approximately $10 billion over the next three decades.

Under both Labor and Liberal models of the NBN, fixed wireless and satellite were chosen to deliver internet to households in regional and remote areas.

Topics: government-and-politics, telecommunications, information-and-communication, internet-technology, rural, australia

First posted