NBN Wholesale Prices Fixed For Five Years

If you were worried about signing up for the NBN and then watching the price go up exponentially, lay your fears aside. NBN Co has announced that it is fixing its wholesale price for five years, before raising them at half the rate of inflation after that.

The wholesale rate will be frozen at $24 until at least July 2017, and will then only increase at one or two per cent each year, depending on the inflation rate.

The catch is that NBN Co can't guarantee that the retailers won't increase prices during the same period, although given the competitiveness of the broadband industry, it's unlikely it will increase much faster than the wholesale rate.

Still, it's yet another argument to add to your arsenal when arguing the NBN with naysayers.




    I assume that's $24 for the lowest speed and data allowance?
    Does that mean other speed/data costs can fluctuate wildly?

    I highly doubt I'll see the NBN in the next 5 years anyway.


        Yeh... the wholesale rate for what? Not everyone understands what a wholesale rate of $24 covers so by just repepating something that has already been said in the article makes you look like a dick.

          Bitching and moaning because you are too lazy to go out and find the information yourself. Instead demanding people spoon feed you everything, makes you look like a dick.

            An ISP will buy each tail for $24.
            This tail will be any speed, any downloads etc..
            The customer uses the ISP's network, they're using the bandwidth the ISP pays for, therefor what the customer uses, the ISP pays for.
            ISP's take this into account and will offer prices according to the prices of the bandwidth and pipe size.


            ISP buys a 1GB pipe for $1,000 p/month, if customer wants a 100mb connection then the price will be more expensive then a customer who wants a 20mb connection because the 100mb connection has the potential to use a tenth of the bandwidth, even though both tails cost the same at wholesale.
            All restrictions are done by the ISP and not NBN.

            (I've only been working at an ISP for 9 months so don't shoot me if I'm slightly off).

              W R O N G

                care to elaborate?

                He is wrong, but who was it that looks like a dick?

                Care to explain to me where I went wrong?
                I'd love to improve my knowledge for my career.
                When you just say "W R O N G" without any elaboration it makes you sound like a jackass.

                  The tail is not any speed, the $24 gets them a 12/1 tail. For faster speeds the wholesale price goes it.

                  Ref. page 2 http://www.tektel.com.au/TekTel%20Report%20-%20NBN%20Pricing%20Explained.pdf

        So the Retailers only pay $24 for any connection speed and any amount of data?

          - Google "what is nbn wholesale price"
          - Click on the fourth result
          - Open PDF document outlining pricing structure
          - Scroll down to the second page
          - Feel satisfied
          That took a whole 12 seconds, hell it took longer for me to write this...

            ho would have through the ALP has something usefluuy on their website.


              I apologise for not knowing everything about the NBN. I didn't know, so I asked a question, no need to get worked up.

              Maybe I was expecting too much from the journalist to explain that the $24 is for the base connection speed across the three technologies. I mean, it would have only taken him 12 seconds, right?

                Most tech sites like Gizmodo, LifeHacker, Engadget and ARS Technica are crap at giving their readers the basic information like that.

                Instead making them go to a third party website, then click another link, download a password protected ZIP file to get to a 12,000 page PDF document where the information is on the first page.

      Yes Dan it is an untruth my $50 for 30 gig will cost $100 on ADSL. I am not happy that these clowns are going to double the price of my net access. The cost is probably why the take up rate is so small.

    I'm still for a NBN but this will take far too long and this news means nothing to me because I will no doubt have to wait 5 to 10 years before I can connect to it so I'll be having increased cost right off the bat.

    Another thing, why is the cost of the NBN increasing each year anyway? Can someone explain to me why they are doing this?

      I am not expert but its my understanding but with inflation means that upkeep on the network will cost more and more as each year passes so they put their price up to cover inflation.

      I am probably wrong so dont take my word for it.

        Upkeep costs and wages increase, but they're not much when compared to the initial cost of the project, so as that money is paid off it should get cheaper.

          Ozoneocean, so as that money is paid off it should get cheaper but yet the wholesale price will continue to increase which is basically a no it won't get cheaper because they already said the wholesale price will continue after the 5 year hold. I understand the upkeep costs but that should be already worked into the 'now' wholesale cost. At the moment...the information that is available about the whole thing is like looking or reading a blank piece of paper. Reports are coming in from NBN and other sources that says one thing and then says another thing. It's too confusing at the moment and to me it doesn't appear to be managed very well

    does this mean the price also wont drop as more companies come online and as more cable from overseas are laid?

      Teeheehee... laying cable. Ahem, carry on...

      price increase to cover the pay rises negotiated by collective bargaining.

      Let me check my crystal ball...

      Prices are unlikely to drop unless the Australia's CPI also drops.

      More companies coming online and more overseas cables being laid (lol) will simply increase competition for the extra costs that the RSPs add to the base cost of hooking up a customer to the NBN (which is the $24 figure).

    love the marketing here...
    whilst iSP's usually LOWER prices over time, these guys announce their 'slow' increase in price in a positive way...
    and i still don't like that ISP caps will throttle connections at ~128kbs for going over... should really be relative to the speed hike you're paying for, instead of staying consistent with today's generic connections.

      This is an ISP policy tho, so if you don't like the shaping speeds, there'll be nothing stopping you going to another provider (assuming you didn't sign on for a 23207234 month contract... did you? :P)

    This is bogus. Five years ago I was paying $89 for my Internet. I am now paying $69 for a service with twice the speed and three times the quota. So locked in NBN increases is hardly good news!!!

    I work for a connection company, we sell NBN equipment to companies such as NBNco and Service Stream. It is my understand that as far as our work goes, it will be another 2 years before we really start pumping stuff out. 2012 will be slow, 2013 will be 3x the year before, 2014 3x again. So most people are probably looking 3 - 5 years before they see anything NBN related in their street anyway.

    WHAT!!! Most of us won't get the NBN for at least 5 years. This is just spin

    Typical behaviour by a Monopoly. No one will know the real market price of the rental. It's a terrible policy. I still think that they should have just contracted existing telcos to build the network. It would have been cheaper, and created competition. The UK have the best policy with broadband.

    At the very least splitting Telstra into two companies (wholesale and retail) and then giving the wholesale arm the money to build the network should have been the way to go.

    P.S. Gizmodo is shamefully bias towards a policy which blinds those who are ignorant to the cost of such a project and what that money could have been used for. It's called opportunity cost, and the economic cost or profit should be determined and modelled by the Productivity Commission. That's what they're there for. So we don't make blunders like this one risks being.

    I find it interesting that they feel they need to announce they wont be exponentially increasing the charges. I'm not sure it's very believable considering the NBN is costing a colossal amount of money and everything can change if the government changes.

    Should the price go down after those 5 years? Not up? If the government are expecting a lot of people to use the NBN, it should be going down. As the more and more people use the NBN, shouldn't it be expected that the price goes down?

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