A range of service options and prices for Internet access in remote, rural and urban areas of Australia are presented in table 7.3.1 Service prices are as at May 2001 and take into account the impact of recent Telstra initiatives. Service prices are based on the price structures presented in table 7.2. ISP and telecommunications charges were obtained from Telstra and the particular service was chosen on the basis that it minimised the cost to remote, rural and urban users.
Information is also presented on the data transmission rates for each service.
Basic PSTN access
The price of basic PSTN access to the Internet did not differ between Australian remote, rural and urban areas (see table 7.3).
The performance (data rate) of basic PSTN access to the Internet differs between remote, rural and urban areas. Slower transmission rates in remote and rural areas increase the time taken to complete Internet functions. However, remote and rural Internet users are able to access ISP plans offering unlimited hours of Internet access (with volume-based charging), such that performance differences do not translate into price differences.
1 ADSL, HFC cable and one-way satellite users incur volume-based charges for Internet access — charged for each MB above a monthly allowance. The use of time-based charges in table 7.3 may underestimate the monthly cost of Internet access for these users.
Table 7.3 Options for Internet access in Australia, May 2001
Transmission rate (kbps) Prices ($ per month) Service Internet user
location
Downstreama Upstream 10 hours 25 hours 40 hours
Basic PSTN Nationwide <56b <33.6b 18c 27d 28d ISDNe Nationwide 64 64 82 121 160 ADSLf Urban 256 64 94 94 94 Urban 512 128 110 110 110 Urban 1500 256 137 137 137 HFC cablef Urban 256 64 59 59 59 Urban 512 128 77 77 77
Urban uncapped uncapped 76 76 76
One-way satelliteg Urbanh 64 <33.6a 70 71 72
Ruralh 64 <<33.6a 72 73 74
Remoteh 64 <<<33.6a 76 78 79
Remotei 64 <<<33.6a 69 70 71
One-way satellitej Urbanh 400 <33.6a 103 104 105
Ruralh 400 <<33.6a 105 106 107
Remoteh 400 <<<33.6a 109 110 112
Remotei 400 <<<33.6a 102 103 104
Note Prices were based on the lowest priced plan widely available in the relevant market. Assumptions
regarding the number of Internet sessions were based on Internet usage not the location of the Internet user or the service used — 5, 10 and 15 sessions for users accessing the Internet for 10, 25 and 40 hours per month, respectively. Service cost determination is based on the price structures described in table 7.2. PSTN line rental charges are excluded from basic PSTN, ADSL and one-way satellite service charges as they are shared with the voice service. ADSL and cable prices are based on a 12 month contract. One-way satellite prices were based on an 18 month contract. Individual fixed equipment and installation costs were ammortised over a five year period. Basic PSTN and one-way satellite costs exclude the cost of an analogue modem and costs associated with new or in-place connections. ISDN installation costs include upgrading a single PSTN line to provide an ISDN service. Satellite prices are based on Internet users utilising the satellite downstream and PSTN upstream connections for the entire session. a The data transmission rate received by the user. b Data transmission rates received by Internet users depend on many factors including the length of the customer access network (see chapter 5). Urban Internet users receive downstream (upstream) PSTN transmission rates <56 kbps (<33.6 kbps). In general, rural users receive lower average PSTN data transmission rates than urban users (<<). Remote Internet users receive lower average PSTN data transmission rates than rural and urban users (<<<). c The Telstra BigPond Regular Plan. d The Telstra BigPond Home Essential Plan. e Telstra OnRamp Home Highway ISDN service. Calculations based on one 64 kbps channel. The service covers about 96 per cent of the population. f Telstra offers ADSL and HFC cable residential Plans at three different transmission rates. Telstra ADSL and HFC cable Blast Off Plans offer users 256 kbps downstream. Internet users face a 250 MB allowance. Cost per additional MB is $0.189 up to 5 gigabytes (Gb) and $0.179 per MB after 5 Gb. Telstra ADSL and HFC cable Freedom Deluxe Plans offer users 512 kbps downstream. Users face no download limits but are subject to an ‘acceptable use policy’. Telstra’s Business Deluxe Plans offer ADSL users 1.5 Mbps downstream. Cable users face uncapped data transmission rates — the data rate received by each user is the maximum available network transmission rate at any given time (see box 6.1 in chapter 6). Telstra Business Deluxe users face a 500 MB allowance. Cost per additional MB is $0.189 up to 5 Gb and $0.179 per MB after 5 Gb. g The Telstra BigPond Basic Sat Plan — uses the PSTN for upstream transmission. Users access a package that combines satellite and ISP charges for a lower total charge. h Users purchase a 65/85 cm satellite dish and require professional installation, the fees for which vary between remote, rural and urban areas. i Under the special digital data service obligation (SDDSO) remote Internet users unable to access an ISDN service may be eligible for a 50 per cent rebate (up to $765) on the cost of the satellite dish and installation. j The Telstra BigPond Giga Sat Plan — uses the PSTN for upstream transmission. Users access a package that combines satellite service plus ISP charges for a lower total charge.
ISDN
The price of ISDN did not differ between remote, rural and urban areas of Australia (see table 7.3). Some remote and rural populations may not be able to access ISDN services (see table 6.4 of chapter 6).
ADSL and HFC cable
The deployment of ADSL and HFC cable is limited to urban areas in Australia. However, HFC cable deployment in urban areas of Australia is less general than the proposed level of ADSL deployment.
Service providers offer a number of ADSL and HFC cable plans to urban users. Service plans offering higher levels of performance incur higher monthly rental charges. HFC cable was cheaper than ADSL for current marketed levels of performance. However, actual performance levels experienced by cable users are influenced by its shared architecture (see section 6.1 of chapter 6).
One-way satellite
The price of one-way satellite services was found to be higher for Australian remote and rural users than urban users (see table 7.3). The cost disadvantage resulted from higher professional installation charges in remote and rural areas.2
The remote–urban satellite cost disadvantage in table 7.3 may be an underestimate for some remote populations. Remote populations must pay for travel costs associated with professional installations. These costs have not been included in the calculations.
Through the special digital data service obligation, Internet users unable to obtain an ISDN service may be eligible for a 50 per cent rebate on the cost of purchasing and installing a satellite dish. This rebate is likely to offset the higher charges associated with remote satellite installations.
2 In general, the price of satellite installation is independent of the size of the dish. The exception is the price of satellite dish installations in remote areas — $590 for the 65/85 cm dish and $1166 for the 1.2 m dish. Remote one-way satellite users face installation prices over 3.5 times greater than rural users and 5 times greater than urban users for a 1.2 m dish. In addition to these charges, remote one-way satellite users must pay for travel costs associated with professional installation.
Government and Telstra initiatives
The prices for Internet services in rural and, especially, remote areas were lowered by Telstra in April 2001. Prior to April, the ability of remote and rural users to access an ISP with an untimed local call was a significant factor influencing the relative prices of remote, rural and urban Internet access. Remote–urban and rural–urban price comparisons for basic PSTN and one-way satellite services in January and May 2001 are presented in box 7.1.
The price reduction in April occurred with the introduction of Telstra’s initiative to provide nationwide untimed local call access to the Internet. This brought forward one part of the Government’s initiative to provide untimed local calls in the extended zones in remote and rural Australia for both voice services and Internet access.
In addition, the Telstra initiative provided remote and rural Internet users with the ability to access ISP plans that reduced the cost of Internet access. Previously these plans were only available to urban users.
Telstra is offering a wholesale dial-up access service, MegaPop, that allows users to access other ISPs for the cost of an untimed call.
Box 7.1 Remote, rural and urban price comparisons, January and May 2001
Prior to April 2001, the price differences between remote, rural and urban areas for Internet access via basic PSTN and one-way satellite services were much greater than indicated in table 7.3. Price comparisons for January and May 2001 are presented in the table below.
Data rate Rural or remote premium over urban price 10 hours per month 25 hours per month
Service User
location
Downstreama
January May January May
kbps per cent per cent per cent per cent
Basic PSTN Rural <<56b 0 0 18 0 Remote <<<56b 162 0 334 0 Satellitec Rural 64 2.5 2.5 8 2.5 Remote 64 9 9 14 9 Remoted 64 50 nr 120 nr Satellitee Rural 400 2 2 6 2 Remote 400 6 6 10 6 Remoted 400 34 nr 85 nr
Note Figures were calculated from Telstra prices in January and May 2001. Remote and rural prices are
expressed as a per cent addition to urban prices. Remote one-way satellite price calculations exclude the special digital data service obligation (SDDSO). The inclusion of the SDDSO would reduce the remote– urban satellite price premium for some remote users. a Data transmission rate received by the user. b Data transmission rates received by Internet users depend on many factors including the length of the CAN (see chapter 5). Urban Internet users receive downstream (upstream) PSTN transmission rates <56 kbps (<33.6 kbps). In general, rural users receive lower average PSTN data transmission rates than urban users (<<). Remote Internet users receive lower average PSTN data transmission rates than rural and urban users (<<<). c The Telstra BigPond Basic Sat Plan — uses the PSTN for upstream transmission. d Remote users unable to access an ISP for an untimed local call (only applicable for January 2001 calculations). These users access Telstra’s Rural Connect Plan (described below). e The Telstra BigPond Giga Sat Plan — uses the PSTN for upstream transmission. nr Not relevant.
In January 2001, basic PSTN and one-way satellite prices were higher for remote and rural users than urban users because of:
• a lack of local call access to an ISP for some remote and rural users;
• the inability of some remote and rural users to access certain ISP pricing plans that reduce the prices of basic PSTN and one-way satellite Internet access; and
• higher prices for professional one-way satellite installation in remote and rural areas. Those remote and rural Internet users unable to access an ISP for the cost of a local call could join Telstra’s Rural Connect Plan. This plan bundled ISP and call charges offering users a lower hourly charge than would be incurred via timed community or other long-distance call charges coupled with an ISP plan.
In May 2001, remote and rural Internet users only incurred higher prices than urban users for professional one-way satellite installation. The removal of usage dependent charges in remote and rural areas eliminated the high premiums paid by these users in January 2001, especially for high levels of use.