This was published 6 years ago
'They don’t give a f---': NBN director blasts ISPs for poor speeds
By Ben Grubb
Australian internet service providers that complain about the fee they have to pay per megabit for access to the national broadband network don't care about consumers or quality of service, according to NBN Co non-executive director Michael Malone.
The founder of ISP iiNet, which was acquired by TPG in 2015, said in an exclusive interview with Fairfax Media that providers were not provisioning enough internet traffic for users to have an enjoyable internet experience, and were to blame for slow speeds across the nation.
"The reason they [telcos] are moaning is that they are price fighting," Malone said of ISPs. "They don't give a f--- about the quality of service."
Malone said that media needed to "be careful about who they speak to" in the industry when it came to the ISP sector complaining about effectively being taxed for internet traffic.
'Certain retail service providers have pressure on their profit line' and expect NBN to drop CVC price: Michael Malone.Credit: Chris Pearce
ISPs must pay to NBN what telcos call a "usage tax" for CVC, or connectivity virtual circuit. Telcos claim the charge, which varies between $8 and $17.50 per megabit, is too high and is a disincentive to take up faster speeds.
In reality the charge turns out to be about the same as what telcos were paying pre-NBN to Telstra and other wholesale providers, according to Malone, once you factor in things like hauling international bandwidth to Australia and domestic interconnect fees.
"Certain retail service providers have pressure on their profit line because their overheads are going up and one of the things they control is how much CVC they provision, and it is much easier for them to say, 'In order to increase or improve my profit margins, NBN Co should reduce the price of CVC'," Malone said.
It comes after Malone said that people who complain to media about not being able to get connected to the NBN should be sent to the back of the connection queue.
In a statement, NBN chief corporate affairs officer Karina Keisler said of Malone's previous comments: "NBN is working hard to improve the end user experience with the full support of the Board. Michael Malone is an independent non-executive board member. His comments are not an official opinion of the company. His experience entitles him to his own opinion."
Malone pointed to Telstra and Aussie Broadband as being among the service providers provisioning adequate bandwidth but made clear he was not endorsing them.
While Malone said he hadn't personally seen any proposal to dump the CVC usage fee for consumer plans, as reported exclusively by Fairfax Media last week, there were NBN wholesale business plans that existed which did not have a CVC applied at certain speed tiers, Malone said.
What consumers really wanted at the end of the day was internet that just works and that they didn't have to worry about, Malone said.
"But what is happening is that consumers are assuming that if they go with a certain retail service provider they will get the same quality than if they went with another and pay $5 more," Malone said. "They are possibly not asking the right questions of ISPs, or making the wrong choices."
He recommended people talk to people nearby to determine the best provider to go with.
"That's the best way to determine which provider you should go with," he said, "because things can change on the internet during the school holidays and so forth. And so, in order to get an understanding of the internet experience you'll get, have a chat with your neighbours."
NBN's best defence was going to be "to get the project done" on time and on budget, he added.
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