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Monday, 20 June 2011
Page: 6563

Mr TURNBULL (Wentworth) (18:07): I am touched by the minister's remarks about the NBN conquering the tyranny of distance, but the question that I addressed to him and that he singularly failed to respond to is about the tyranny of poverty. The digital divide is marked by poverty—by lack of household income—and the affordability of the NBN or of internet access is absolutely critical. It is fine for the minister to try to brush that issue away as though it is of no concern to anybody in this place, but this is the single biggest barrier to internet access. If the government and this parliament are serious about social equity and people getting access to the internet then the issue of affordability is fundamental.

The minister said that the retail prices have not been determined. They have not been determined in the sense of being finally determined, because the NBN is not operating and the retail service providers are not in operation. However, the numbers I quoted to him are taken from page 105 of the NBN's corporate plan, and the figures that I quoted, of $53 to $58, are the estimated retail prices for the 12-megabit service with a 50-gigabit limit. There it is: page 105 of the NBN corporate plan. Those numbers, the minister should be aware, are very much at the low end of what the market participants are estimating the likely retail price will be after all of the additional connectivity and backhaul is provided by the relevant retail service provider. So I would ask the minister once again if he could actually answer this question and not seek to fob it off.

I might add to the information I provided in my previous remarks another point, and this is also a critical issue about affordability. You would not build the NBN, or contemplate building the NBN, for $50 billion or whatever it winds up being if all you were going to do was to deliver download speeds of 12 megabits per second, because many Australians now are able to get that on existing technology, and you certainly would not need to go to fibre to the home to do that. So the promise has always been that households will demand faster and faster speeds.

I refer the minister to a study that was recently conducted in the United States for the Federal Communications Commission by the US economists Greg Rosston, Scott Savage and Donald Waldman. The study is called Household demand for broadband internet service; it had quite a lot of currency at the time it was published. It found that people were willing to pay an additional US$45 a month to go from slow broadband to fast broadband but only an additional US$48 a month to go to superfast. They concluded that there is only a US$3 premium to go from fast to superfast, which would be the equivalent of, say, 50 megabits per second; it would actually be considerably lower than this, but certainly 12 megabits per second would be regarded as fast broadband. Yet the NBN's corporate plan—again, I am referring the minister to page 105—estimates that people will pay an extra $35 to go from 12 megabits per second to 50 megabits per second. The experience of all of the telcos offering higher speeds over HFC cable at the moment is that they have great trouble in getting material additional income for getting an uplift of speed from fast to very fast or superfast speeds.

So I would ask the minister to take that on board as well, because if the NBN is not going to make 12 megabits per second more affordable as a baseload ADSL2-comparable speed and if the promise of the NBN is to offer superfast connectivity, which is much more expensive—$35 a month more expensive according to the NBN—then why does the minister believe the NBN will make internet access more affordable? I would ask the minister not to dodge this question again. This is central to the whole plan.