NBN: What about unlimited plans?

Yesterday’s column about NBN plan prices drew an interesting (and in some ways frustrating) discussion point regarding unlimited NBN plans. To date, there aren’t many in the consumer space, but I’m not sure that’s as much of a problem as some might think.
I did many stupid things yesterday. Which, I’m sure the wags would point out, means that it was just another Tuesday.
But more specifically: I’m in the middle of putting together a large NBN-centric feature, so I’m hip-deep in research and reading. One thing I keep hitting from the staunchly anti-NBN crowd is this idea that NBN access fees will be significantly higher than those of existing broadband plans, because… reasons. ALP. Unions. Asbestos. That evil woman. I’m sure you’ve hit the rhetoric before.
Anyway, I hit my breaking point, so I got angry. When I get angry, I do tend to yell and scream a bit, mostly inside my own head. Then I do what I do best. Which is research, analyse and write.
So that’s what I did, picking out three ISPs that provide NBN plans as well and putting them head to head. You should read that first. You really should, because otherwise this isn’t going to make a whole heaping host of sense.
All read up? Good.
Anyway, that wasn’t the stupid bit. The stupid bit was getting involved in an argument online, via Twitter, about NBN plans. As Twitter arguments often do, we went back and forth without resolving a darned thing. Because it’s the Internet, and arguments go that way, and while Twitter can be good for some things, nuanced arguments often aren’t well stated there. This isn’t intended to be an attack on that person, because discussion can be a healthy thing. I gave up on the circularity of that particular twitter discussion, but not on the argument, which I’ll unpack here. The relevant party is welcome to ignore, or respond, or whatever. It’s the Internet.
The point being raised — and for what it’s worth, it does have some validity — was that for those on an unlimited ADSL plan (his quoted plan was TPG’s $60/month plan, to give full details), that costs on NBN plans were comparably too high.

“it’s like comparing cost of cars to motorbikes and then listing the cost of an Audi or Porsche for the car price. Except that unlike the Porsche/Audi to normal car comparison your $130 plan is not substantially better/luxurious then TPG.”

Firstly, “not substantially better”? Oh hell yes, it is and should continue to be for decades to come. That’s not just a speed observation, either. Fibre is good for speed, but it’s also good for reliability — it’s not as though Australia’s copper is in pristine, perfect condition — and good over distance. An unlimited plan on ADSL could be seriously impacted simply by your proximity to the exchange… and then the quality of the copper in-between. ADSL lines on copper are subject to all sorts of interference, not to mention the issues surrounding distance and ADSL speed rates. So, frankly, yes, a fibre connection is substantially better than an ADSL one. Stating otherwise is just… it’s just ridiculous.
But leaving that aside, the $130 plan I used was entirely because I wanted to mix up the ISPs within the feature. If I was purely going on a costs basis I could stick with just a few reasonably priced ISPs.
The example I used was iPrimus, but the same kind of service and data allocation can be had from iiNet (who I’d used on the lower tier) for less than a hundred bucks. In other words, shop around when buying broadband. That’s basic common sense.
Equally, I’ll admit that there isn’t a whole lot of consumer-level unlimited plan competition for NBN plans just yet. As far as my own research can pinpoint, there’s only one; AusBBS offers a $90/$100/$110 unlimited plan, with rising speed tiers for the upper price brackets. Yes, it’s more expensive than current NBN plans. I can’t deny that, and there’s no point trying, although the argument’s dogged insistence that it was “more than twice” the cost of ADSL doesn’t quite add up.
Equally, though, Unlimited ADSL plans didn’t just spring into existence — they were predicated on a LOT of paid plans with measly allocations and then the growth of competition within the ADSL space. You know, just as is happening right now with NBN plans, as ISPs jockey for position and market advantage in an emerging space.
Moreover, the TPG plans mentioned have (and I’m quoting from TPG here) “Limited coverage availability at selected ADSL2+ enabled exchange areas.” They’re not universal. Yes, the NBN isn’t either, but it’s a project that’s being built out over time to deliver FTTP services to 93 per cent of the population*. TPG doesn’t disclose coverage figures, but I’m willing to bet it isn’t covering 93 per cent of the population.
In fact, the very last thing that TPG would want would be 93 per cent of the population running “unlimited” broadband of any type in an actually unlimited fashion.
Unlimited plans don’t really work any differently to those with quotas. ISPs still sell them on the basis that a majority of users will use less than quota, or, in the case of unlimited plans, less than the cost of providing the data. That’s basic business common sense, but what it means for an “unlimited” ISP is that you want more customers paying $60 for $10 worth of service than you do customers paying $60 for $60 worth of service. You’re still over-charging, because that’s the ISP model in a nutshell. If TPG suddenly had to service 93 per cent of the population all wanting petabytes of data each, they’d shut up shop with remarkable speed, because it’d be a recipe for financial ruin.
I do get that there’s a certain peace of mind with “unlimited” plans, but they work (from an ISP point of view) on the basis that the majority of users won’t in fact feast on multiple petabytes of data, so there’s still a margin of profit to be enjoyed. For many users, plans that tip the scales at 500GB or 1TB may well be enough, and data predictions suggest that we’ll see plans with even higher caps than the current 1TB offerings out there within a year or two.
I suspect that the argument I was having fell neatly into a space that so many broadband arguments fall into, and that’s not looking at the whole picture. It’s the “I’m alright” principle in action, but the issues there are bigger, both for you and the nation as a whole. Upkeep of the copper that runs the current ADSL infrastructure isn’t cheap — around $1 billion/year is the figure usually bandied about — but even if you’re next door to the exchange right now, what happens in two years when you move and you’re 6.1km away? You’re… stuffed.
The removal of distance issues — and especially the new working arrangements for all sorts of businesses and workers that emerge from a ubiquitous broadband networks is one of the key issues that really excites me about the NBN, and that’s not just looking at from my own limited perspective.
Unlimited plans will no doubt emerge in the NBN space — and for many users, that may be long before the local ADSL services are decommissioned — but they’ll remain a niche amongst the general market. Right now, yes, the choice open to you if you must have unlimited is more expensive (albeit not double) but there’s emerging competition in this space. I wouldn’t bet that they’ll grow more expensive over time if ISPs actually want to stay competitive — which is to say, if ISPs want to stay in business.
*Subject to rollout schedules, and, of course, elections.
Image: G Meyer