NBN’s $3bn fibre revamp is great news but don’t Australians now care more about price than higher speeds? | National broadband network (NBN)

The announcement of the demise of NBN’s fibre-to-the-node technology will be welcomed by those who have endured poor speeds and service for the past few years, but making the internet more affordable would have a much bigger impact.

When Tony Windsor sided with Labor in the 2010 election, he put the NBN as one of the key issues, saying famously: do it once, do it right, and do it with fibre.

It’s taken nearly 15 years but we have just about met Windsor’s last point, with the Albanese government announcing on Monday that about 95% or 622,000 homes currently accessing the NBN via fibre-to-the-node (FTTN, which uses existing copper lines from the node to the premise for connection) will be able to upgrade to full fibre by 2030 at an additional cost of $3bn.

The Coalition’s promise (which we can see echoes of in the nuclear debate today) when they came to power in 2013 was that the multi-technology mix, as it was called, would be rolled out quicker (it wasn’t) and would be more affordable (it also was not). Years of successive governments giving NBN Co funding injections, or loans, has meant that incrementally the NBN by 2030 will now more closely resemble the original plan but has ended up costing a lot more.

On a business level, Monday’s announcement is a smart plan: FTTN has historically been much more expensive for NBN Co to maintain. In 2022, the company said FTTN faults were four times higher than fibre-to-the-premises, stating “a fibre-based network is therefore less complex as well as less costly to operate and maintain”.

It also comes at a time when NBN Co is haemorrhaging customers who substitute their home internet with 5G or Elon Musk’s Starlink satellite option.

Since September 2023, the number of active connections in places that use a mix of fixed-line connections has dropped by almost 65,000 as of the end of November. This category, also known as brownfields, covers 7.1m active NBN broadband services to homes and businesses that existed before the NBN was built and is a mix of FTTP-type connections as well as connections made under the Coalition’s revised plan that used existing copper and cable connections (which predated the NBN and was used mostly for pay TV).

The then-chief executive of NBN Co, Stephen Rue, told Guardian Australia in May last year that poor FTTN connections were to blame.

“The main reason for that is service and a desire for faster speed … customers who are at the end of the FTTN line … they get 25 megabits per second, but they can’t experience a faster speed and obviously there are some copper lines that have unreliability,” he said at the time.

While the government stressed families and businesses need the internet “at an affordable price”, that detail was missing from the announcement on Monday, and would be one of the factors people may be switching off.

Aside from the customers on the hybrid-fibre-coaxial product, or those on fibre-to-the-building or fibre-to-the cabinet connections that will still use copper lines and will be wondering when they’ll get an upgrade, the biggest issue facing the NBN is affordability.

In response to NBN Co updating its wholesale pricing plan in 2023, major retail providers, such as Telstra, Optus and Aussie Broadband, hiked their prices across many plans in July last year. That resulted in up to 10% price increases on the most popular speed tiers, while they decreased the prices for the highest speed tiers (which cost more overall to sign up for).

During a cost-of-living crisis, and with Telstra, Optus and Vodafone offering 5G home plans that rival or undercut these prices, it represents an attractive alternative option for customers, and a growing threat to the NBN.

The communications minister, Michelle Rowland, when asked about this point on Monday, said “that is their choice” for customers who want to use 5G, but that fibre ensures higher-quality services. Rowland said the government’s intervention in the wholesale pricing for the NBN ensured that customers were paying less than what would have happened if the Coalition had remained in government.

“Under this government, we ensured that a special access undertaking approved by the ACCC was entered into, which means that NBN Co’s prices are actually set by regulatory standard and that means that they are set to inflation,” she said. “In contrast, when the previous government left office, they had a proposal on the table for price increases for NBN services of CPI plus up to 3% on some products.”

Which is true, but for an election that will likely be fought on cost-of-living issues that will be cold comfort for voters today. Cutting prices for the NBN would bring relief but also make sure the NBN can be an asset used and valued by the public.

NBN’s pricing model is centred around the idea that the network will make a return on investment, which back under the Rudd Labor government was to make the network attractive for privatisation.

The Albanese government is now arguing against privatisation of the NBN, going as far as to legislate to keep it public. Surely this means the pricing model should be reassessed with a focus on affordability?