Australian internet providers are in open conflict with the National Broadband Network, urging the wholesaler to drop its controversial charge for bandwidth.

At the moment every internet provider has to purchase how much bandwidth they need per month from the NBNco.

The more they buy, the less likely their speeds will slow down during peak hours.

This charge is called the Connectivity Virtual Circuit (CVC) and NBN chief executive Bill Morrow insists it is needed to eventually recover the cost of building the network and make a modest return on the Government's $49 billion investment.

Bill Morrow wrote a blog post and position paper suggesting a price war over internet plans had led service providers to cut corners on quality to save on costs, and suggesting ISPs should be buying more bandwidth.

But internet providers argue the charge is too expensive.

TPGs chief operating officer Craig Levy said the CVC charge in Australia was amongst the highest in the modern world.

"This CVC model needs to disappear," he said.

He defended the amount of CVC TPG and its brands iiNet and Internode purchased for its customers.

"It's always a balancing act, we believe we're giving customers as good as we can give them," Mr Levy said.

"Our customers are amongst the most satisfied on the NBN, however, more bandwidth would always be most welcome."

Mr Levy said while TPG sold plans ranging from 12 megabits per second to 100 megabits, most customers were opting for the lowest speed because that was what they could afford.

Another provider, MyRepublic, has also spoken out against the NBNs wholesale charges.

The company operates across the Asia-Pacific region, and its local managing director, Nicholas Demos, said he was disappointed with Mr Morrow's public comments.

"I just believe it's a bit of a deflection strategy from the NBN," he said.

"We all know about the number of complaints they've been receiving recently, so it's just trying to pass some of the blame on to the RSPs (retail service providers) for that."

MyRepublic also operates in New Zealand, where 84 per cent of the population will get a fibre optic cable connection to their home.

"Fibre to the premises (FTTP) just works," Mr Demos said.

"When you introduce other technologies here like fibre to the node, and HFC (hybrid fibre coaxial), there's complications and it brings in a lot more customer complaints.

"The model is not right. The model as it currently is means the individual RSP needs to look after their own CVC.

"Where we operate in New Zealand, it's not up to an individual RSP to do that — the NBN provider over there... they look after the CVC."

'They're going to have to admit they made a mistake'

Kimberley Wray, an iiNet customer who lives just outside Brisbane, said she was unhappy with her fibre to the node connection.

"The speeds have been quite slow," she said.

When she checked her speed at around 6pm on Monday night she was getting 16.4 megabits, but she said that was the fastest she had seen it in a while.

Ms Wray said her average download speed was just 7 megabits, slower than when she was on ADSL.

Fibre to the node is where an optic fibre cable only runs as far as a box somewhere nearby to the house.

The old copper telephone cables are used for the last stretch along the street and into a home.

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"We would pay a little bit more willingly to have had fibre to the home or workplace, where everything was consistent, it was fast," Ms Wray said.

Independent telecommunications analyst Paul Budde said politicians were going to have to admit they made a mistake, and write off half of the cost of the NBN.

"If you cannot deliver a service that people can afford, then you're obviously building a network that's too expensive," he said.

"In the end you have to write down a very significant part of your investment in order to have a service that's affordable that people can use."

Mr Budde said customers would not be prepared to pay the charges that would come with the retail service providers' massively increasing their CVC spend.