Thursday, 6 June 2013

NBN: Aussie FoxNews agrees with Turnbull: "Connection to the NBN is _not_ Free"

What appears to be the on-line Australian version of FoxNews giving a unique version of "Fair and Balanced Reporting", Politifact, has given Turnbull a Thumbs Up for another of his outrageous misdirects, "Connection to the NBN is not free", made in what appears to be a complaint to the ACCC and first reported in Murdoch's "The Australian".  I don't agree with the Politifact conclusion:

Is it fair for Turnbull to conflate the cost of infrastructure installation and the cost of service charges, which are a long­established and accepted cost of internet access? They’re two very different aspects of the NBN. But as the ACCC points out in Advertising and Selling: "businesses may get into trouble with free offers if they do not reveal the complete truth." [emphasis added]

Turnbull says "connection to the NBN is not free". Regardless of Labor's investment, on being told they need to pay an RSP to get online many consumers would probably agree.

We rate Turnbull's statement Mostly True.
Others have discussed the overt-bias, funding & influencers behind the self-styled "Truth-O-Meter" of Politifact, so I shan't. It seems, like FoxNews, they use the same Recursive Fury and Self-Sealing Reasoning that Prof Stephan Lewandowsky of UWA has researched with Climate Change Deniers, self-styled 'sceptics'.

Lewandowsky & team provide strong research evidence for this, with an interesting wrinkle:
While you see/hear what you want to see/hear, the more educated or qualified your are, the more certain you are in in your views and stronger confirmation bias.
The Politifact article brings up the Trade Practices Act/Australian Consumer Law (TPA/ACL) issue of making "False or Misleading" statements. I raised this some time ago, and again, in connection with the Turnbull/Coalition plan. Whilst political promises are specifically exempt, Turnbull has been making very specific, even testable, claims about Commercial matters:
Will ASIC or the ACCC regard those promises are mere political puffery or commercial statements, misleading if false?
 I think Mr Turnbull in unwise in starting something that can get out of control. If the ACCC takes the view that the ALP statements are commercial, then they must also take the same view of Coalition statements. The differentiator may be what's included in political pamphlets and what's written/said in public media in support of a political policy with an implied commercial service.

The Coalition has failed to mention to potential customers significant and unavoidable out-of-pocket expenses they will incur with VDSL/FTTN and not with the other three, current, NBN Co transmission networks (Fibre, Fixed Wireless, Satellite).

Mr Turnbull has also very deliberately misled the public is stating the cost of VDSL modems will be about $50. There don't appear any stores in Australia selling VDSL modems even for $100, double that outrageous claim. Adam Internet supply VDSL Modems and CISCO ATA's for around $300. [Zytel site].

Meanwhile, in the UK - home of the VDSL/FTTN rollout Turnbull loudly spruiks, Amazon, generally known for competitive pricing, has resellers offering VDSL and cable/fibre router/modems nowhere near the A$50/UK£31 Turnbull claimed. The cheaper products are for cable/fibre, or ADSL, not for VDSL:
Lastly, what of the "NBN connection is not free" claim, how would an Ordinary Reasonable Reader (ORR) take the statements of the ALP and NBN Co? On face value, "NBN Co does not charge for standard connections, but does charge for non-standard" says charges, like phone connections, could apply but aren't normally levied. Whilst "NBN" conflates "NBN Co" and the many offerings provided by the multitude of RSP's using NBN Co's wholesale service over their three transmission networks.

Is there "an NBN", meaning just one National Broadband Network as implied by Turnbull?
Is there a standard price list for new "NBN" services offered by RSP's?
Do the RSP charges cover any physical devices or infrastructure?

No, No & No... There is a company with a similar name who offers wholesale, not retail, Customer Access Network (CAN.) services that are widely resold but are not the only CAN provider. The company doesn't have one network, it has three Customer Access Networks and a rather complex Transit network, with Interconnects for its customers and provides access to multiple, independent backhaul providers to RSP's who have to arrange their own hosting facilities, peering arrangements and access to "Tier 1" and international link providers.

There is no one NBN that anyone can point to. There are many wholesale services provided by many companies, including NBN Co for just one service, to a multitude of Retail Service Providers whom the public deal with.

The best we can say is that RSP's offer different services branded "NBN", mostly utilising Customer Access Networks provided by NBN Co. RSP's charge setup, not connection, fees for new services, even for customers of existing services. This is well known and understood by the public in the context of Broadband and other Telecommunications services, such as Mobile phones.

RSP's are at liberty to use CAN. wholesalers other than NBN Co and still brand their service "NBN". If wholesalers follow the NBN Co interconnect standards adopted under the ACCC SAU, Special Access Undertaking, RSP's can access customer premise equipment uniformly.

Bits are agnostic as to how they are carried: RSP's can lash together services from many wholesale providers and include their own product conditions and differentiators. Broadband Retail customers are acutely aware of the differences between RSP's and their packages and actively shop for retailers and deals that match their needs and values/priorities.

If there isn't "an NBN", then any assertion about "Connection to the NBN" is wrong before it starts.

For me, the question turns on what the general public perceive the NBN to be and if there's a difference between the usual wholesaler (NBN Co) and the Retail Service Providers (RSPs) that lash together many disparate services and components to provide a usable retail broadband service.

From the amount of press coverage and discussion since 2008/9, the public is very aware that NBN Co, the company, is involved in a major Telecommunications roll-out, that the major, but not sole, focus is on "Fibre to the Home", that Telstra is somehow involved in the roll-out and, most critically, they cannot buy anything directly from NBN Co: that they will continue to buy broadband services from ISP's, though they might be referred to as "RSP"s in documents. The detail and nuances of Network services and Regulatory environment are not nearly so well known.

Will people be charged when NBN Co come down the street and attach a Fibre  Premises Connection Device to their house? No.

When the customer orders a service from an RSP using NBN Co services will they be charged from installing the Fibre Wall Outlet, Network Termination Device and Power Supply Unit? No.

What is the "non-Free" charge that Turnbull is making much ado about?
It's a variable administrative charge by RSP's covering their service activation and billing costs.
[upd]. At least one ISP/RSP, iiNet, charges no setup fee, and I'm told others charge existing customers nothing to swap to an NBN Co plan.

This doesn't kill the "not Free" argument, but knocks a big hole in it. It changes the proposition to:
 "When connecting to the NBN, some customers may choose to pay their Retailer an initial fee."

Ordinary Reasonable Users of Telecommunications services understand these administrative charges.
The median age of the Australian population is around 45: almost all adults (voters) have had to pay for a telephone connection, landline or mobile. They understand that different charges can apply based on the amount of physical work to be done. That, at a minimum, an administrative charge applies.

There has also been enormous coverage, especially by the Coalition, about the cost of the NBN Co roll-out: people know that it's a bunch of money, many know that connections will average $3-4,000 each. Any administrative charge by an RSP of ~$100, I assert, will be regarded by ordinary, reasonable consumers as "being free", that is, they weren't charged for the equipment and lines installed for them.

Australian consumers of computing and Internet services are very used to "special" language in product claims. Microsoft for many years claimed versions of its Windows Operating System were shipped with "Zero" bugs. This was never challenged by the ACCC despite the overwhelming security and operation bugs in "Windows", acknowledged now in the monthly "patch Tuesday" updates released.
[Microsoft defined "Zero" as a commercially-tolerable level of defects.]

It's very well established in Trade Practice law that words such as "Free" and "Zero" can have non-literal meanings in specific consumer contexts. That consumers understand the normal caveats and conditions implied in advertising claims for specific markets and the intended meaning.

Will ordinary consumers feel misled or deceived when charged an administrative setup fee by an RSP for an "NBN" plan on Fibre, Wireless or Satellite? No.

Alternatively, how will those same consumers (75% of fixed lines will be VDSL under the Coaltion's plan) feel when they contact the same RSP and ask for an identical service, pure-digital with an in-premise NTD, on a Coalition VDSL service - to be greeted with a bill of probably $1,000 for equipment supply and installation? Very irate is my conjecture.

Note, this is not about the potential $5,000 charge for consumers optionally upgrading to full-fibre connection with NBN Co. The Coalition have disclosed there will be an upgrade fee, but not yet the scale of fees.

This is the game of misdirection and obfuscation that the Coalition are playing, being deliberately misleading themselves by not disclosing material concerns, whilst pillorying the Government over an innocuous and non-misleading statement.


  1. Thank you! I commented yesterday on Whirlpool :

    "Using similar semantic tactics as that article, NBN's connection to the network is free, connection to the Internet is not. The focus on terminology should not be the word "connection," but on that which is being connected."

    It's nice to know I'm not alone in my thinking. That website needs a swift kick somewhere uncomfortable for encouraging apple and orange comparisons.

  2. It would seem that only a normal reasonable person understands the difference between connection and ongoing costs when connecting to the internet. We are fortunate to have politicians and fact checkers correct our misunderstandings...


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