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Here come cheaper internet plans

Looking for a cheap NBN plan? You might just be in luck

If only I had a dollar for every article I’d seen that was critical of the NBN… well, I’d never have to pay for internet access, ever again.

But alas, no-one has to pay to whinge on the internet (ironically enough), so the NBN hatred continues, and I have to keep paying to get online.

But it might, just, be about to get cheaper.

Now, I’m all for thoughtful government spending. I really dislike taxpayer dollars being wasted. (I have a long list, Treasurer and Shadow Treasurer. Call me.)

And there’s a very strong case for ‘user pays’ in many instances where the benefits of government spending accrue disproportionately to one part of society, of whom it’s fair to ask for a contribution.

Economic orthodoxy, thanks to a couple of decades of more conservative policy thinking, is a big fan of user pays. Toll roads. Pipelines. New housing developments. Even ASIC and the government trademark office are expected to — in part or sum — pay their own way.

And then we have the NBN. So scared are government and opposition of being accused of wasting billions on a white elephant, both fell into line on updating the nation’s communications infrastructure. Of course it should be user-pays. “No waste on my watch, dear voter.”

The problem, of course, is that such user pays approaches ignore non-economic benefits. The value of making sure most (if not truly all) have access to 21st Century telecommunications, particularly schoolkids, is important so as not to entrench the haves and the have-nots. There are questions of national efficiency and competitiveness.

And, well, there’s Netflix, even if the ‘chill’ is outside the government’s mandate.

So the beancounters did the maths, and worked out that the NBN, god bless it, would actually make money — and be something a future responsible government could flog on the ASX — as long as consumers paid through the nose for it.

It wouldn’t be the first — and won’t be the last — time the allure of the perfect spreadsheet won in a battle against reality. People simply aren’t signing up in sufficient numbers.

And then there’s Telstra ’s (ASX:TLS) (admittedly, bloody expensive — and I own shares!) new Unlimited mobile phone plan. As data gets cheaper, mobile will become a pretty clear and present danger for the mostly-terrestrial NBN. Not less because TPG Telecom (ASX:TPM)  is close to launching in Canberra, and the other telcos won’t idly stand by, either.

So, it’s no wonder that international ratings agency Standard & Poors has suggested what many others have already said: a write-down of the network is likely inevitable.

And with it, just as likely would come lower prices, given NBNCo could simply make a couple of adjustments to the beancounters’ spreadsheet that would mean lower payback figures, and hence, lower customer charges.

That’s to the good for consumers and retail NBN resellers, alike. It just creates a political headache for the government and its servants at NBNCo, which is why we might see it drag its feet.

Which might mean lower prices take a while to eventuate… but once the political coast is clear (or the reality becomes too pressing even for poll-focused pollies to ignore), it’s very likely we’ll be paying less to get online.

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Motley Fool contributor Scott Phillips owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited and TPG Telecom Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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