The NBN, The Myth Of Choice, And Australia's Rubbish Internet Future

The National Broadband Network (NBN) was designed as a wholesale network: access to it is sold by dozens of providers. But the news today that TPG and iiNet are planning a merger underscores a stark reality: you're almost certainly going to end up buying your NBN broadband access from one of just three providers — and for customers, that sucks.

Cable hand picture from Shutterstock

Presuming the TPG/iiNet merger goes through — which seems likely, given that all the board members are in favour — there will be three utterly dominant broadband providers in Australia: Telstra, iiNet/TPG and Optus. Underneath them sit a handful of vaguely-known brands, many of them owned by M2 Telecommunications (iPrimus, Dodo), others trickling along as independents (Exetel). But when the third and fourth-largest providers think it makes commercial sense to merge, it's hard to imagine many of the smaller players surviving in the long term.

The existence of the NBN is one of the main reasons why consolidation is happening. The announcement of the merger plans for iiNet and TPG specifically calls it out, noting the merger "delivers scale benefits in an NBN environment".

This makes sense. When the product you're selling (access to the NBN) is essentially identical, you can differentiate yourself either through exceptional service or exceptional scale. The majority of ISPs appear to favour the scale approach. iiNet has long prided itself on having better customer service, but the mere fact of the merger suggests it is now heading in a different direction.

Why does this suck for customers? Firstly, because it means that the generally abysmal quality of customer service from ISPs in Australia will continue and accelerate. Large listed companies might spout off in press releases about the importance of customer service, but the endless shrikes calling for "shareholder value" will inevitably see service options cut, sent offshore and otherwise diminished. Add in that fixing network-level problems will have to be routed via NBN Co and we can expect a continuation of the current poor approach. We can look forward to long wait times, endlessly repeating the same details and buck-passing galore.

Secondly, because if there are only three main providers, there is not going to be much incentive to compete on price. Telstra has achieved its dominant position despite offering broadband plans that are considerably more expensive than any of its rivals. TPG sells itself on being cheap, but at the expense of what's generally deemed to be abysmal customer service.

Thirdly, because one common factor across all these providers is that they want to lock you into long-term contracts for multiple bundled products: your broadband, your mobile phone, your landline and some form of TV service, all locked down for 24-months and set at a single price that makes direct comparison with rival services more difficult. For a business, this makes sense, because you lock in a higher monthly spend for a longer period of a time. For a customer, it's infuriating and confusing and inflexible and generally just painful.

I really hope that as the NBN expands, we'll continue to see decent plans from providers who aren't trying to sell you loads of other products as part of a bundle. We'll certainly keep trying to seek out and highlight those options here at Lifehacker. But history suggests they'll be increasingly hard to come by.


Comments

    Three dominant providers are better than two plus look at how competitive TPG have been up until this point with their broadband plans.

    I think this could work to our benefit Angus.

      Not really, kal0psia.

      Three 'dominant providers' are just as bad as one in the hellhole called Australia, for one reason and one reason only.

      Australia has always - and will will always - be governed by the greedy with their paid political puppets. They will always make things sound far more complicated and expensive than they actually are, just so they can keep hiking prices, pushing the limits decency and belief for their bottom line - 'net profits'.

      Add to that the bully-boy tactics of buying out competition and really, you've got a banana republic.

      Australia has always been a backwater and will continue to be a backwater until someone overthrows the entire, diseased, system.

        Australia has it's issues, but at least we aren't blowing ourselves up (IE, Arab Spring) or shooting people that look at us oddly. (IE, America).

          Australia's issues are far more insidious than bombs and shootings, but it will come to that if the rich don't get their heads out of their arses.

          Australia's internet was going to be heading in a great direction under a Labor Govt, but who came along and trashed it so he could put more money into the pockets of his mates? A Liberal - Tony Bloody Abbott, that's who.

          Liberals will always take the cheap way out of public service(s) and necessities in order to pay themselves more to feather their own nests for their own lifetimes, and the internet is just one more victim of the Liberal party's greed.

        Yes--LandofGreed! You get it...Love that my kid did not get shot or bullied at high school, but the pay off is this time warp mentality back to 1956.

    Hell I just wish I could get NBN. I'd pay the same as I currently am for ADSL. Instead my only choice is shitty iinet owned, but not operated, TransACT, which costs almost twice as much as NBN, but gives me the benefit of a bundled phoneline nobody wants.

    As for Scale, personally, that's what I prefer. I've been with smaller ISP's before, and they just can't handle peak times. Hell last time I was on TransACT the crappy local ISP's couldn't even handle HD streams of Youtube, on cable internet...

      I just wish I could get fixed broadband, period.
      I live 30 min out of the Brisbane CBD and can only get mobile broadband...

    Less providers does not always mean less competition. Often when smaller providers merge it can increase competition because they are in a better position to challenge the dominant player. A single big firm and many smaller ones is a recipe for low competition, particularly in industries which benefit from scale.

    That's a general principle, and it's not to say that's happening here , but this situation would seem to apply: When planning strategy it's all about beating Telstra, and this is probably the best way to do it. Are we really unhappy with Telstra's position being threatened? If that can only be done with larger providers, maybe it's preferable.

    I'd also add that the reason customer service is poor is because most customers would rather not pay the premium. While I certainly agree that they should provide a minimum level of service, and that they often fall below this, you can't expect companies to start shelling out for a high level of service when customers are so sensitive to price.

    NBN is dead, it's just a telecommunications network upgrade at this point. FTTN blows. We're speed capped like crazy (you need the 3rd speed tier to even slightly beat ADSL2+ speeds) , peak/off-peak quota still exists, and quota caps are low in general. Rollout is behind so far it's not funny, and it's not prioritised for those areas that have ADSL only (e.g. the areas where Telstra said "screw it, NBN is coming, we won't do anything for the next 5 years".) Costs are insane too. The only benefit is that it's 'naked' internet.

    Oh, and when we're done in eleventy year's time, our average national internet speed will be below ADSL2+ and nowhere near speeds of the rest of the world.

      "Oh, and when we're done in eleventy year's time" You sir, made my day.

      So true. FTTN is a joke. There really is no NBN any more.

      Turdball's hand picked anti-FTTP board was appointed to destroy the NBN and they are doing an excellent job of that.

      Next year they will have taken over Telstra and Optus existing HFC cable network and say "look, we built an NBN with all these people we connected!"

      Surely Australian voters aren't so effing stupid they would fall for a sham like that.

        Yes they will be stupid enough !!! Just watch the polls abbott stuffs up polls go down then he stuffs up more they go back up figure that out for me please

        The Voting public are clueless about Internet speeds for the future. You build for tomorrow is a term lost on mums and dads that only do basic email and a facebook.

        lol @ grown men making up things like "turdball" how's the fourth grade?

          its great, but even we aren't dumb enough to vote for onion munchers down here

            Yes, your state must be the ones who didn't vote for the idiot :p

    ...the endless shrikes calling for “shareholder value” will inevitably see service options cut, sent offshore and otherwise diminished.

    Just to play devil's advocate for a moment, I'd be quick to point out that off-shoring customer service isn't equivalent to a reduction in service.

    My own experiences with iiNet's South African call centre have been outstanding, and the same is true of my experience with Vodafone's Indian call centre... when I've been able to understand the accent. Which, tragically, is something that can occur even locally and lead actually Australian operators to be mistaken for being in India, purely because they're migrants who have retained a lot of their accent.

    The off-shore centres I've interacted with certainly shine in comparison to the same service my former colleagues in Telstra/Bigpond were forced to supply in the name of cutting costs (and it was about cutting costs - seriously, at one point tech support were being measured on their sales performance, I shit you not). Our former centre management knowingly encouraged staff to end any software-related troubleshooting after a fixed amount of time and send a hardware tech, knowing that the techs didn't have any extra training or were likely to have to call in BACK TO US to fix the problem, purely because: 1) the tech truck rolls didn't come out of our budget, and 2) we were measured on number of calls, not number of successful outcomes. Disgusting, and a huge motivating factor behind why I quit.
    And all home-grown and local, no foreigners involved!

    Fact is, as long as the centre's doing the job of communicating effectively, location doesn't matter dick. The odds are very good that even if you get an Australian call centre for anything, they're going to be in another state or another town, and their local knowledge of your area is going to be completely irrelevant. There's nothing that someone in Perth knows about my phone service that a well-trained agent in Delhi doesn't.

      Got to say the South African call centre for iinet has been pretty good. Spend a long time with them on an issue that ultimately wasn't resolved as it was a Telstra issue and they will not acknowledge it (noise in the lines, cuts the internet out several times a day).

      One time they were not able to help was when some strange configuration they had made it so linux based devices (mostly Android) could not access Google services only when on an iinet wifi connection. Found iinet techs on whirlpool with a fix you could put in your router will they fixed it nationally 2 days later. A very weird bug.

        I think Telstra is the biggest problem with telecommunication in this county. They desperately need to spend money to fix the phone lines and they don't. Getting them to fix a problem like line noise means getting a technician to go to the nearest exchange and tighten the nut holding your wire on.

        Getting Telstra to do it is near impossible. Heck I once reported a faulty speaker in a handset and the person at the other end of the line said and I quote "Sounds fine to me". It took 5 minutes to explain that she could not hear my faulty speaker over the phone only I could hear it.

        And that Telstra Cordless phone I bought all those years ago? It was so bad and had so much noise it wasn't usable, I thought it was faulty so I took it back. After going through three of them I finally purchased a Uniden (which I still have) against the advice of the staff at the Telstra store (I was young and stupid) which was clear back then and still is today despite the abuse it's taken. A few years ago I replaced the battery in the handset and haven't had a problem since. Other than Line Noise and the fact that rain screws up my phone/internet service.

          Big part of the reason they're trying to move away from copper lines. Expensive and difficult and inefficient to maintain.

            I am well aware of this, I think the government buying the old copper lines is one of the worst financial decisions going. Yes running Fibre would be expensive but at least it would work for a very long time with minimal maintenance.

            Edit: Oh and provide a speed that is considered broadband as our NBN no longer has a B in the rest of the world.

            Last edited 13/03/15 7:53 pm

          I'm pretty sure there is something wrong in just our street. I know it's noise because I was home from work once and went out to chat to a Telstra van that suddenly rocked up outside my house. He was chasing some noise with a radio scanner thing but it stopped when he arrived so he couldn't pinpoint it.

          Usually restarting our BOB fixes it, but when it happens multiple times a day it's just a pain. Fibre is installed in our street, but it looks like it won't be hooked up to the house for another 6 months at least :(

      I've had people put on official warnings at workplaces before because they abused migrant staff for being in overseas call centres and were just generally racist. Not a good idea at work...

        Why would you abuse somebody who you want to help you? Surely being polite would get you further. That being said being on Hold and having it stop the music to tell you that you're on Hold infuriates me no end, Either tell me the approximate wait time or just play the music until somebody answers.

      Funnily enough, the last few dealings I had over the phone to Telstra which I assume were to a call center in the Philippines based off the accents were actually extremely positive. It's amazing to say this, but I really did get good customer service from Telstra on multiple occasions. After the third time I probably should have purchased a lottery ticket.

        We go through the Philippines one for a few of our functions. Great if you follow the script, but more difficult for off-script. Very tempted to toss out the old d-number and technical instructions to get them to just agree to whatever, but pretty sure that would ce back to bite me.

        Unrelated, it's been years since I left the big T and I still remember my d-number. I bet I lost a cherished childhood memory to store that.

    Pretty much identical to how electricity is sold... and we all get such a good deal on that...

    I'm currently with Skymesh, which is the cheapest off-contract plan I could find, and while they di have on and off-peak, the off-peak quota for my plan just got bumped to 12TB

    I'll worry about that in six years when my area finally gets it.

    The reason the NBN is a complete waste of money, is that millions of Australians have 100+Mbps cable running past their homes, but 82% of people who can get it, choose not to connect at all. Everybody says they want fast internet, but nobody wants it enough to pay for it.

    If the Telstra/Foxtel cable runs past your house, you can get 100-115Mbps right now. I'm not sure if Optus has updated their cable recently, but theirs offered 30Mbps 6-7 years ago. Any time a friend complains about their slow ADSL, I check their address for cable, and usually find they can get it, but they still say they don't like Telstra/Optus, or it's too expensive. As far as I'm concerned that means they really don't want or need fast internet - I've moved house to get it, because I need it for my work, and I actually care about internet speed. And don't give me that crap about living in a block of flats, that just means you have to organise the internal wiring with your landlord to enable access, even Optus will install cable to flats if someone else pays for the internal wiring.

      "Everybody says they want fast internet, but nobody wants it enough to pay for it."
      more like nobody wants to pay utter bullshit prices for it, especially if it is a mere 100-115 Mbps.
      And if they all did link in ... then they wouldn't be getting anywhere near that, since the more users on a a cable section decreases the available bandwidth for any given user since its shared.
      The NBN specs back in 2008 were mediocre compared to what was available in some places in the world, and made worse by the estimated 15+ years for the system to be installed around most of Australia, by which it will already be further out of date and slow.
      So underwhelming.

    I agree with you on some aspects - Telstra has been offering an NBN standard product through cable for a while and many people do not realise. But how much advertising has Telsta been putting out to reflect this? They are heavy on the 4G related stuff, but not home broadband.

    The NBN was designed for a second purpose, which was to separate the wholesale (the connection) from the retail arm. At the moment, Telstra pretty much have a stranglehold on this. You can't choose to hook up with Telstra Cable but use say, Internode as your biller.

    However, the big shift is on us (The Netflix effect). The product that requires the standard of connection NBN offers is here. If you have a 4K TV, you can stream Netflix in 4K, but ONLY with an NBN grade connection.

    We're also in the early days of the "Internet of Things" revolution - more and more appliances are going to be internet enabled. Plus, we aren't far off Smartgrid technology becoming a thing as well. It won't be long before your electrical connection talks to the grid to find out which generator is supplying energy at the cheapest rate and connects through them to purchase your electricity, or sells your excess back to the grid for the best price.

    People are going to see having high speed, low latency broadband much like having clear TV reception was in the past. Just something you expect to have and shouldn't have to research whether your house has it or not. A lot of people couldn't see the sense in Digital TV until they bought a flat panel. Would they go back now?

    Couldn't help but notice that the companies merging are precisely the ones with excessively poor customer service (think call centres in places like India) and overpriced products/services (Telstra leads the charge there, closely followed by its new mates in crime).

    Why aren't there laws protecting consumers against this kind of greedy rubbish? Probably because of the likes of anti-egalitarian governments like Abbotts.

    We can say farewell to fantastic products and services from once professional businesses like Internode, who have done what everyone has does and sold out in worship of the almighty dollar - they will now (if they haven't already) be swallowed whole by yet another inferior backwater monster known as iiNet.

    And as far as the NBN itself goes, we haven't noticed the slightest bit of difference between it and broadband - the service is still poor (and we live in suburbia within good range), if more than one person in a household is online at the same time, there goes the connectivity, and customer service is such a joke that it should be illegal to even call it 'customer service'.

    Still, we're captives in this god-forsaken hellhole, aren't we? We don't have the luxury of living in Europe or the U.S. where massive amounts of choice means consumers rule, not greedy corporations.

    One trick I learned, is when you get to the automated voice, just keep saying 'complaints' over and over. Eventually you'll get put through to the call centre in Melbourne.

    None of this would have occured if John Howard had not stopped the then know Telecom, Now Telstra, from laying optic fibre some 20 years ago and wholesale it out.
    I attended a Telecom seminar back then when they announced they were read to lay optic fibre to every home in the country. Howard stopped it to prevent the money being spent so he could sell the telco.
    So if you want to lay the blame put it right into the Liberal's lack of technology laps

    The only way this is going to work well for consumers is where they have a choice between NBN and another network. TPG fttb being a good example. Reports are that TPG on NBN, even if you go for 100/40 service and have fttp, is abysmally slow because TPG hasn't bought enough bandwidth on the NBN. Whereas their fttb service is consistent because they own all of the network.

    Being forced to switch to NBN as old lines are being terminated. NBN plans comparable to current ADSL2 offer less data inclusions, slower speeds at regular and nerfing and are bundled with unwanted services.

    Not pleased at all!

    I have been on NBN for some time (Unfortunately with Telstra) I am paying through the nose (around $180.00 - $210pm, depending on the cost of bundled home phone) and the speeds are not as great as companies like Telstra boast.

    To get full speed for both download and upload I had to pay extra for "Download SpeedBoost" and then for "Upload SpeedBoost" and the upload speedbost can only be signed up to if download speedboost is signed up to. On top of that not only do I not get Fibre to the premises but I don't even get Fibre to the Node. I am copper all the way to my closest telephone exchange which is 3 suburbs away so 100Mbps download is really 85-93mbps and the 40mbps upload is more like 24-32mbps!

    I can't stream 4k from Youtube as telstra said I could.

    A 4k youtube video plays for 5 seconds and then buffers for 10 mins. Stan and Nexflix are atrocious and a friend of mine with Internode ADSL can stream Stan and Netflix better then me in HD. Telstra are clearly throttling Youtube, Netflix and Stan and when I contact customer support the dude from Bangaloor tells me to sign up to Presto!

    Of course Telstra owns presto and THIS is why Telstra throttles the competition.

    Presto is more expensive, less reliable and only works on devices from companies that did big money partnership deals with Telstra.

    Telstra also keep toying with my plan to start my contract over all the time to keep me trapped. When I first moved into my suburb there were no ADSL spots left and the choice was Pre-Paid 3G ($10 per 1Gb and slow as hell) or Cable which was a Testra monopoly. I had no choice to go with Telstra. Of course I WAS REQUIRED to bundle my home phone with it so I also have THE MOST EXPENSIVE home phone in Australia. A local call is $0.50c (The cost of a public phone booth) and a call to a mobile inside the metro area is $2.00 first 1st min and $1.00 for every other min. I'd hate to see what an interstate or international call costs.

    So when the NBN hit my area I was stuck in the middle of a Telstra Contract. So I change to NBN (No choice there. Once NBN hits, Cable and ADSL are switched off).

    Contract starts again.

    Then Telstra has to double their data for everyone as all the competition offered double the data for half the price.

    Contract starts again.

    I have almost 2 years left on a 2 year contract that started in DECEMBER 2013!!!!

    I am going to go to lawyers to get out of this prolonged contract to go with a faster, and cheaper alternative (Legal fees would be far cheaper than what Telstra would charge to get out of this infinity year contract, and if I win I want Telstra to pay my legal fees).

    Not to mention ALL THOSE NEVER ENDING BLOODY TELSTRA OUTAGES!!!!!

    Telstra is bordering on the criminal with their practices, locking people into never ending contracts to hold them to ransom, robbing them blind and giving them a disgracefully shoddy service and outsourcing their "Customer Support" to India.

    Australia: Where only Politicians and Big Businesses get a "Fair go". The rest of us are screwed royally!

    Last edited 06/02/17 5:40 pm

      Have you tried contacting your Ombudsman? They are your first port of call in the war against Telstra and the Liberal Government Monkey Squad

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