NBN customers paying higher prices for slower speeds

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Millions of Australians forced onto the NBN will pay more for slower speeds, and they’ll also be forced to foot the bill for the money borrowed to pay for the network’s construction.

So far, the NBN has cost around $49 billion in construction costs. To recoup this money, NBN Co charges telcos higher bandwidth fees. These charges will be passed onto the customer in the form of scaled back speeds at certain times of the day.

NBN Co charges telcos around $10 to $14 per 1Mbps of bandwidth they buy, depending on how much they purchase. These high costs mean that telcos only buy around 1Mbps for each customer on a 25Mbps plan.

As a result, during peak times, some NBN customers may experience speeds up to 1/40 of what they now get – even though they are paying the same or more for ‘faster’ services.

NBN providers have been flooded by complaints from customers saying that their connections are much slower than the speeds they previously enjoyed. One customer is receiving speeds up to 1/100 of what he believes he has paid for.

“As everyone else, I am getting 1 per cent (1 megabit per second or even less) of contracted speed (100Mbps) during peak times,” said the user. “After searching around I could see this is really a common Optus problem all around the country.”

Another user added: “Simply put, they [telcos] don’t purchase enough bandwidth from the NBN. They buy enough for 10 people but sell it to 100 people, so at peak times it’s useless.”

Are you connected to the NBN? Are you having similar problems? Or are you happy with your product?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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72 Comments

Total Comments: 72
  1. 0
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    I just ran a speed test on my PC which has cable internet access viaTelstra/Bigpond. It shows 36.3 Mbps. Sometime soon (well, supposedly) we’ll get the NBN in my area. From the sound of things I’ll be getting slower speeds with higher prices. How could the government screw things up so badly? Oh, just like they did with energy is the likely answer; through playing politics with taxpayers’ money and generally lacking any real ability to deliver on promises.

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      I think you know the answer Phil.

      It is obviously KRudd & Turnbull. No 2 greater duds ever graced the halls of power.

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      Turnbull is so agile he rapidly went into total NBN stuff-up mode after pledging to make good the Krudd mess.

    • 0
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      Hi Phil.
      I was in a similar situation to you and we were being forced to move to the NBN. Towards the end of last year Telstra upgraded my cable modem to a new gateway and I was getting line speed of 115 Mb/s. I didn’t want to transfer to the NBN and go down to only 25 Mbs. I approached Telstra via a T shop and they agreed to provide me with a speed boost at no additional charge. I was on a Telstra bundle costing $100 per month and I am now on a Telstra bundle costing $90 per month (including home phone and calls) and my download capacity has increased from 200 Gig per month to 500 Gig per month. It also included a free six month trial of Netflix. I get line speed of 93 Mbs and it does not decrease in the afternoon/evening due to load. I guess Telstra bought adequate bandwidth in my area to cover the load.
      I would also advise to be aware of some of the other service providers as their standard package only includes line speed of 12 Mbs. I guess you tend to get what you pay for. Make sure you do your research on line when you are choosing your service provider as they don’t all provide the same features. I have been on the NBN for a couple of months now and have not had any problems and it works great. That’s my experience anyway.

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      Likewise I have been on NBN for 2 years now and it is cheaper and faster than my old ADSL with a free home phone and other extras.

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      Hasbeen: Rudd and Conroy had the right system. Turnbull butchered it and now we have anything other than true NBN. And the cost to date to update exchanges, etc. to work the second rate NBN we have has exceeded the original costing.

    • 0
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      Lets see some FACTS Mick instead of your usual politically based clap trap. Where is your source for these claims that it is actually costing more for this “second rate NBN” rather than on some hypothetical prediction that Kevin Rudd plucked out of thin air without a cost analysis. I fail to see how fttn can possibly cost MORE than FTTP. Have you seen what is involved in providing FTTP services? The work is extremely involved and extremely expensive!

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      Grey Viper I don,t know if you are quite correct in saying that K-DUD plucked the NBN out of thin air, didn’t they do all of the costings on the back of a drink coaster on a flight to no where. Also, Mick the original costings were on the same rubbery drink coaster as well They were the same as most of Rudds and Gillards costings, about 1/4 of the eventual costs.

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      Dear Mick, you tend to turn every conversation into a pro-Labor advertisement. Just a quick reminder:The Labor government not only grand-standed with the NBN as well as putting our country into a downward debt spiral, their incompetence gave us BOATS, BOATS, BOATS without a care in the world about the composition or intent of illegal arrivals. But the illegals get free mobile phones, free reliable internet and many other things while we mere taxpaying Aussies are expected to pay through the nose for inefficient communication services and a dodgy NBN e.g. if we don’t have an affordable mobile phone service and the NBN home phone goes down, we are basically stuffed. So much for the NBN thought bubble, all planned and costed on a drink coaster.

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      OG of course it’s cheaper than your old ADSL, as you use the Library for your internet access and use the next door neighbours phone.

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      P$cript, if OG says it then surely it must be true (nudge-nugde-wink-wink)

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      Do you mind telling us approx. where you are, GreyViper? Like which State and r u in the city or regional?

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      On a cost benefit analysis it would cost considerably less to pay to have the NBN installed than the costs of driving to the nearest library.

  2. 0
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    if i remember well labor wanted a much more sophisticated system that completely did away with the old copper lines. the libs got voted in with their inferior model and now people are complaining.
    by the way the low ratings of the coalition in my opinion have a lot to do with this inferior nbn. people do remember after all that turnbull was championing it as the superior option!

    • 0
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      It is not a problem with the “inferior” copper lines system, it is a problem with service providers not buying enough bandwidth. It is all based on COST! The “superior” FTTP system would cost more and therefore, theoretically, would cause an even greater problem! Also I don’t think Mr Turnbull ever championed it as a superior option, my memory is that it was all about cost and it was the cheaper option!
      Why do people on this platform have to turn every discussion into something about politics?

    • 0
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      I still have my phone on the copper network as I live in a rural area. I have been on the NBN for over 2 years now and there are no plans of switching off the cooper network.

    • 0
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      alinejordan
      Yes, Labor wanted full fibre (FTTP) to replace the copper network which is rotting away in the ground.

      GreyViper
      When the Abbott mob got elected, Turnbull was the minister in charge of the NBN and also wanted FTTP, but Abbott politicised it and made him go with something else, anything else, as long as it was different to Labor’s scheme. So we got FTTN.

      New Zealand already had FTTN (Turnbull copied them) but I believe they are now spending a fortune converting to FTTP because FTTN is no bloody good, mainly because the copper is still rotting away in the ground.

      If Australia continues this roll-out of FTTN for political purposes, the cost of converting to FTTP in the future will be astronomical because the new stuff will need replacing as well as the old copper stuff.
      Conversion is NOT just a matter of digging up the last couple hundred metres of copper and replacing it with fibre, because the systems are not compatible. It has to go right back to the exchange or equivalent. Also, the distances involved are much greater than in New Zealand.

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      GreyViper, I won’t get into which party had the better plan for the NBN, but it IS a fact that copper for the last mile is a major problem and that’s what the LNP has given us. If you force volume into a smaller pipe, you get problems. That’s what the current NBN does. The glass allows fast travel, but near the connection point it pushes a higher volume into a poor quality, thin pipe and everything slows down. I know people who resolved the problem by paying $13,000 to put glass to their premises. Sadly, we can’t all afford that indulgence.

    • 0
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      The performance experienced by end users is nothing to do with the technology used by the NBN. It has everything to do with recouping the cost of the NBN. It wouldn’t matter if the architecture of the NBN was FTTP or FTTN. There is plenty of capacity within the NBN network but the cost of delivering that capacity to the end user is much more expensive than the old legacy networks. It shouldn’t surprise anyone. It’s a rare thing for any project on the scale of the NBN to come within cooee of the original estimates.

      As for putting glass to the premises resolving the issue – rubbish. This is not an issue of the speed of the pipe into the premises. At some point it has to be aggragated into the NBN along with all the other users. If the retail provider has not purchased enough CVC from the NBN (CVC is the shared capacity to support its customer base) then a faster pipe from the home is only going to lead more frustration. The following is a quote from the Telstra website in reference to NBN speeds “No matter what nbn technology you have, actual user speeds will often be less than the maximum line speed (particularly in busy periods) and will vary depending on the factors explained above”.

      From what I understand if you are moving from and ADSL service to NBN you are likely to be reasonably happy but if you are moving from a cable service then you will be disappointed. Regardless it is going to come down to how much capacity your service provider has paid for.

      Our only hope is that once everyone has switched over to the NBN prices will come down and performance will become more predictable and stable (at least then we may have some level of confidence in what you get from your provider for the money). It must be tricky for providers running their business during this transition period where the proportion of their customers on the NBN is constantly changing – maybe even being lost to other providers. I know I will be looking around for a different provider when the NBN comes my way.

    • 0
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      People just don’t get it, a car powered by a rubber band is much better than one with a petrol driven engine. Why, because it is cheaper of course, performance has nothing to do with it.

  3. 0
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    So I heard that the current telephone system will be switched off in October this year and we will all be forced onto NBN. Fantastic. NBN is not even due in my street until January- June 2019! I suppose that means we will have to revert back to tin cans and string or smoke signals until then. Although they would both be faster by all accounts.

    • 0
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      No buy a carrier pigeon instead.

    • 0
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      KSS,
      that is not correct! Different areas will be switched off at different times depending on when the NBN is introduced into your area. My area commenced ‘switching off’ in April this year. You will be given plenty of warning, both by the NBN Co and your service provider, of the pending disconnection. I was sent many letters, leterbox drops and emails warning me of the pending disconnection. I was with Telstra and they even sent me a registered letter which I had to sign for several months before the disconnect date. I am now happily working on the NBN with really good speed and no problems at all. You will not be forced to resort to “tin cans and string or smoke signals” judging by my experience.
      CHOOSE YOU SERVICE PROVIDER CAREFULLY is my advice.

    • 0
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      I looked through the extensive list of telcos providing the NB in my area and I hadn’t even heard of most of them. Is it a case of anyone can buy bandwidth and set themselves up as an NBN provider?

    • 0
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      You have 18 months AFTER NBN is made available to change over before get cut off. If the clowns in Canberra spent money on correct information to the public than running stupid ads about the so called benefits of NBN the PUBLIC ( like yourself ) don’t need to see a doctor for unnecessary stress issues. NBN will let you know by letterbox drop 4 months before cutoff if you have not switched over. By the time they are ready to offer service, seriously consider price falling mobile plans which are adding more data and unlimited calls ( if you don’t use a lot of internet ).
      Meantime KSS, go make a coffee and relax. It’s not worth the stress.

    • 0
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      Agree if you don’t use a lot of internet you would probably be better off with something like a nighthawk that is also portable.

    • 0
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      Lippy I can assure you I am not stressed about the NBN – or anything else come to that. Life is way to short to waste it worrying about nothing. Perhaps its you that needs the bex and a lie down.

  4. 0
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    All good here – paying for 25/5 getting 23/5 consistently.

  5. 0
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    My son is having that problem. He waited two months for installation and then found it was absolutely useless in peak time.(when he is home) – No netflix for him!

  6. 0
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    I had an ADSL speed of 18. Thinking 25 wouldn’t be much of an improvement, I asked for a speed of 50 from my provider, hoping for 40 and got 29. Dropped the speed back to 25 while away, and now get 23 on my 25 request. Malcolm said we didn’t want to pay for speeds, and thats why nobody takes it up. I want to pay, somebody can’t deliver.

  7. 0
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    The Liberals screwed up the excellent Labor plan for the NBN when they took over and against all technical advice started rolling out their inferior FTTN network. FTTN has proved to be a disaster for many users and they are now changing the roll-out again to FTTC which is somewhere between FTTN and Labor’s FTTH. All these changes have added enormously to the cost and many users have been left disappointed and angry at what FTTN has delivered to them which is inferior to what this government promised to deliver. For me FTTN has worked and my speeds are great all the time 48/18, but plenty of my friends are having bad experiences with it.

    • 0
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      A technician told me that Labor’s plan would never have worked as the pits were not large enough for all the cables required for a start.

    • 0
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      Labor’s FTTH was working fine for the people who were lucky enough to be connected that way before the election. No complaints from any of them because they all got great NBN.
      If a techie really told you that about the pits he was pulling your leg.

    • 0
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      Dave R,
      as you have said Fibre To The Node is working well for you so the problem is not with the type of technology – the problem, in a lot of cases, is with the service providers. I would be interested to know which service provider the friends of yours that are having the problems are with. Do you see any relationship between service providers and quality of service?
      Also I think the quality of the copper from the Node to the Premises has a lot to do with the standard of service. My home phone service had worked fine for over 20 years without us having a problem. Once they started opening the pits and dragging the NBN cables into the neighborhood my phone was cut off 3 times in 2 months! Like any new system I guess there will be teething problems.

    • 0
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      OG, this is so not right. As the fibre cables take up less room than the existing copper cables.

      Just look what has happened in the UK. A multi technology system was built and it is already being replaced by FTTH as it couldn’t cope with the speeds needed to provide current requirements.

      This stupidity of the LNP is throwing away most of the money being spent on the current build, as most will have to be replaced. Where the money will come from is the big question, as the huge debt run up we now have thanks to the LNP.

    • 0
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      Heavens, P$cript, there is no question of where the money will come from, the government will cut pensions like it always does when it runs up a huge debt.

  8. 0
    0

    How do you determine what speed you have?

    • 0
      0

      Just connect to your internet browser and Google “Speed test”. Numerous options will appear. I tend to use the Ookla speed test or the Telstra speed test. For the best result you need to do it from a computer directly connected to the gateway/router otherwise you are limited by the speed of your WiFi system.

    • 0
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      Actually, most wireless connections are 802.11n (300mbps) or 802.11ac (even faster). So as long as the signal strength is reasonable, they will not limit the Speed Test results.

      So there is no need to run the test from a computer “directly connected to the gateway/router”
      I just tried it;
      Direct (wired) Connection = 23.28/4.71mbps
      Wireless “n” Connection = 23.43/4.62mbps

      Some wireless connections are still the older 802.11g (54mbps). With a good signal strength, they will not limit the Speed Test results either, unless you are paying extra for NBN speeds above the standard 25/5mbps.

      And if you are paying for the higher speeds it would be stupid to use the old wireless “g” equipment anyhow.

    • 0
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      I currently have a cable connection with Telstra. I consistently get around 35mbps download speed and a bit over 1mbps upload speed. While visiting a relative who has NBN (copper to the node 50 meters away) I checked his speed and it averaged about 24mbps download and 4.5mbps upload. What surprised me was the graph during the speed test was not flat like my cable connection. Consistently there were short periods during the test where the speed dropped to zero. I don’t know what was going on but it could be indicative of data being dropped/corrupted within the NBN and end-to-end recovery being initiated.

    • 0
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      Thanks for your comments guys unfortunately what you are saying is way beyond my understanding.

    • 0
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      Your original question was how to check your speed – just go to http://www.speedtest.
      et
      , click on GO and a gauge like a cars speedometre shows up with your speed.
      Free, no sign-up reqired.

    • 0
      0

      Results of speed test for Sydney, don’t know if it matters but I’m up the Central Coast
      Last Result:
      Download Speed: 17122 kbps (2140.3 KB/sec transfer rate)
      Upload Speed: 1110 kbps (138.8 KB/sec transfer rate)
      Latency: 19 ms
      Jitter: 0 ms
      Packet Loss: -1%
      ?21?/?07?/?2017? ?12?:?30?:?23? ?PM

    • 0
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      So that’s 17 mbps download and 2 mbps upload – a good result for general browsing/emails. You’d only need more if multiple people were using the net at once or you downloaded LOTS of video files. I’m getting 23/5 which is ample for two people.
      Also I’m in Albury and the test goes through Sydney, that’s fine.
      Do you know what speed you’re paying for?

    • 0
      0

      Depending by what is available at my location ADSL and ADSL+2
      I get 25GB monthly where 1 GB = 1,000MB and as I’ve only used 5618MB my computer should not be slower because I’ve overused. I am the only user and only do general browsing and emails

  9. 0
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    I’m not on NBN yet but sometimes my computer is suddenly slow, other times it works ok, just noticed this last week or so, what is the cause?
    .

    • 0
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      Most likely Microsoft

    • 0
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      Trood – unfortunately it could be 101 things. Do you have a friend/relative who could check it out for you?

    • 0
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      thanks for your comments guys, it could well be Microsoft as that is one of the things that sometimes takes a long time to open, the revolving circle quite often stops so I click on it again and it can do this a number of times. Google also takes a lot longer to open up sometimes, very frustrating. I had an AVG program previously to increase the speed, etc keep the computer running at its optimum; it expired about a month ago I thought maybe they were doing something to slow my computer down and so encourage me to buy another program. I will ask the tech savvy guy in my retirement village to have a look….thanks again

    • 0
      0

      Sounds like your computer is full of junk and adware to me. I run a free program called Spybot Search and Destroy every week that keeps my computer running smoothly. I also run AVG free and Malwarebytes to check for any malware etc. There are lots of these programs but they are my current choice. AVG also has a paid program that clears everything but computer techs hate it as it make their job harder in diagnosing problems with your computer.

    • 0
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      I also back up all my data to portable hard drives as well.

    • 0
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      I ran the Spybot search and destroy,Google and Microsoft seems to start up quicker but it still takes too long to open other items, tried to open a Yourlife choices item and it just came to a standstill, other times it works straight away

    • 0
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      That sounds like a problem with the Yourlife server and guessing there may not be enough bandwidth for the number of people accessing it. That’s what happened with the Census as well.

  10. 0
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    it is useless and so slow, I was better off with [email protected]

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