Five Mistakes People Make Comparing NBN Plans

With Telstra formally signing its deal to sell off the copper network this week, the odds of the National Broadband Network (NBN) project going through to completion have risen substantially. When you’re contemplating what kind of NBN service you might acquire once it becomes available in your area, make sure you’ve got all the facts.

There are already many NBN plans you can choose from, and we’ve detailed them all in our regularly-updated Planhacker listings. As more providers come on board and the coverage area for the NBN expands, then there will be even more options to choose from. Eventually, the copper network currently used to provide ADSL will be decommissioned and NBN connections will be the only option, but that moment is a long way off.

In the meantime, however, there’s lots of discussion of current NBN pricing, much of it taking the form of panicky remarks like “What I have right now is perfectly adequate!” or “These deals are worse than what I can already get!” Unfortunately, these viewpoints often take a very limited view of the situation. Here are the five mistakes I keep seeing when people compare NBN prices in comments and on forums:

1. Not factoring in line rental

This is a basic but common error. Right now, unless you have a naked DSL service, you’ll be paying both line rental for your phone and a separate fee for your broadband. With the NBN, this isn’t necessarily the case — you can pay for broadband and nothing else. That needs to be factored into your calculations.

2. Not acknowledging that speeds on fibre are guaranteed

“I have ADSL2 and I can get 20Mbps!” you proudly proclaim. In that case, you’re very unusual. ADSL2 speeds vary from premises to premises, depending on your distance from the exchange and the state of your copper wiring. The NBN arrangement provides guaranteed throughput. If you’re lucky enough to get high speeds, that’s great — but that doesn’t mean everyone else can, or that you will indefinitely.

3. Not understanding other people may have less choice

“I have multiple ADSL2+ providers in my neighbourhood; competition has already given me choice!” Again, bully for you, but you’re not typical. You don’t have to even go outside of a capital city to find people whose choice of broadband is a single Telstra-owned service at best, which might not even be ADSL2+. It’s a geographic lottery, and not one that just affects very remote areas (which will get satellite options, just as they have for many years).

4. Not recognising that there are varied options

Even with the half-dozen or so existing providers, there’s a lot of variation. Some shape; some don’t count uploads; some include calls as part of an overall NBN bundle. And we’re at the very beginning of a nascent market.

5. Not acknowledging that wholesaling hasn’t worked

Telstra’s control of the copper network has not led to a truly competitive scenario. At one point, Telstra began selling ADSL plans to customers for less than it would sell them to other wholesalers. The ACCC has had to frequently intervene in the process, but delays of weeks or months remain the norm. Another common scenario: people are told they can’t get ADSL2 from a rival selling a connection purchased from Telstra wholesale, but magically can get it connected through Telstra if they sign up through them. Even the Federal Opposition seems to agree that separating Telstra’s wholesale and retail activities is essential.

Working out which NBN plan you want is not a five-second task. Like any communications purchase, you need to look at all the options and work out what meets your needs. Right now, most Australians can’t get onto the NBN, and those in areas where it’s available may still have other options. Complaining you don’t like something you don’t need yet to buy is not a good way to spend your time. When you do need to buy, look at what’s available and make a sensible decision.

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