NBN Co uses forum to get pricing message across

Comprehensively details its pricing model on popular forum, Whirlpool

The company behind building the national broadband network, NBN Co has taken to popular forum, Whirlpool, to supply comprehensive detail on its pricing model.

The forum post has attracted a fair bit of debate from industry pundits such as Internode’s Simon Hackett and NextDC’s Bevan Slattery on various aspects of the pricing structure.

NBN Co spokesperson, Scott Rhodie, said in the forum it took consultation with the industry fairly seriously and wanted to open a new avenue, and transparency through engaging via Whirlpool.

He addressed reasons for the pricing structure and alluded to comments made by NBN Co head of product development and sales, Jim Hassell, that requirements for wholesale pricing was to payback the cost of the network plus generate an appropriate return.

“I noted from some posts that people don’t think this is a good goal, but it is the goal we’ve been set,” Rhodie said in the post. “Hence, in this context, it comes down to what we think is the best (i.e. the most efficient and equitable) way to earn enough revenue to cover the costs, plus an appropriate return.

“As discussed in our corporate plan we expect a number of our wholesale prices will decline over time, based on expectations of increased usage. We’re being as open and honest as we can about everything to ensure the Australian public get the best deal from the NBN.”

Rhodie said it tried to make a balance so that even more end users will come on and purchase higher speeds than it predicted, which will then enable it to lower the usage and possibly access charges.

He made a final point, saying the NBN Co wholesale pricing construct (access charges and usage charges) is also used in other markets. NBN Co unveiled the pricing structure in December.

The plan revealed a basic NBN connection with 12Mbps downstream and 1Mbps upstream connections will cost ISPs $24 per month. Examples of ISPs include Telstra, iiNet, Internode and iPrimus.