OptusNet Cable and their peculiar pricing

Publication date: 31 May 2002
Last modified 03-Dec-2011.


I've been using Optus' cable Internet access, here in Australia, for more than two years now. It was "Optus@Home" when I got it; now it's just OptusNet Cable, because @Home fell in a heap a while ago. Even through that transition period, and despite a price hike or two, the service was generally excellent.

Now, though, Optus promise to introduce a new pricing scheme, in which the more you want to download (at full speed, anyway), the more you have to pay per megabyte to do it. They still haven't put the new pricing up on their site, as I write this, but they've e-mailed me (and presumably every other customer) about it, so I think the prices and limits they quote can now be considered official.

Most commodities cost less when you buy them in bulk; bandwidth from OptusNet Cable is now an exception.

The way Optus currently work - the change is coming on the first of August - is that everybody can download up to ten times as much as the average user does, with the top and bottom 5% of users ignored for the purpose of calculating the average, and the downloaded amounts being measured over a rolling 14 day period. The average is currently at least 50 megabytes per day; it's hard to pin it down.

Download more than 10 times the average amount over any 14 successive days, and your account's pulled. But that still allows you at least 15,000 megabytes per month, which is hardly stingy. Most people download a lot less than that. There's an on-line "NetStats" utility provided to allow you to monitor your bandwidth usage.

For this service, Optus currently charge $AU69.95 per month.

As of the first of August, though, OptusNet Cable users will have to pick one of four new access plans. Each has a bandwidth allowance, which you can't exceed if you want full access speed. You can (theoretically at least) download as much as you like beyond the limit, but Optus will throttle your connection to 20 to 28 kilobit per second speed, as soon as you cross the line. Worse than dial-up, in other words, though presumably still with better latency than a POTS modem.

The cheapest of the new plans is "Lite", which will cost me $AU64.95 per month (a bit less than the current rate), because I don't use one of their "Choices" bundled Internet-and-phone, or Internet-and-TV-and-phone deals. Since I'm a "Stand Alone" customer who has repeatedly told their telemarketers that he doesn't need another bleeding phone line, because he doesn't have to tie one up with a phone line modem, because he's got this cable Internet connection from, oh yes, them, I get to pay more.

Anyway, the Lite plan costs $AU64.95 Stand Alone, or $AU54.95 for people using one of the two cable-Internet-inclusive Choices plans. But it gives you only a 550Mb full-speed download allowance. This is a little more than a third of what a perfectly average user, with a NetStats score of 1 (assuming that equals 50Mb per day) is currently downloading per month.

The next plan is "Standard", which'll cost me $AU79.95 a month, or $AU69.95 a month at the bundle rate. It allows you 3,000Mb per month. Optus call that "3Gb", but the small print defines a gigabyte as 1,000Mb.

Next is "Pro", at 5,000Mb per month, for $AU154.95 or $AU134.95. And then there's "Ultimate", which costs an impressive $AU305.95 or $AU265.95 per month, and allows 10,000Mb of full speed downloads.

If average use is 50Mb per day, 10,000Mb in a month adds up to a NetStats score of only about 6.5. If the average is 65Mb, it's only a score of about 5.

At the moment, Optus don't even send you a warning e-mail unless your NetStats score's beaten 8.0. From the first of August, there will probably be no plan at all that'll suit anybody who's ever received one of those e-mails.

The really interesting thing, though, is the marginal pricing of the different plans - the price per extra megabyte of each plan, above the Lite one. Additional megabytes get more expensive, not less, as you buy more of them.

The Standard plan offers 2450 extra full-speed megabytes per month over the Lite plan, at a cost of only 0.61 cents per megabyte. This applies to both the Stand Alone and bundled price structures, because in both of them, the Standard plan costs $AU15 more than the Lite one.

But the Pro plan's extra data costs 2.25 cents per extra megabyte for Stand Alone customers and 1.8 cents per extra megabyte for people using bundled plans; the Ultimate plan costs 2.66 and 2.23 cents per extra megabyte, respectively.

Optus, in their e-mail to customers, claim that they're changing their pricing structure in the interests of "making access to cable Internet fairer for everyone".

If one assumes that they are interested in fair pricing, and that they have fairly priced the Standard plan, then I calculate that they are overcharging Stand Alone customers by factors of 1.68 and 2.49 for the Pro and Ultimate plans, and "Choices" customers by factors of 1.64 and 2.36.

In other words, if the extra megabytes in the top two plans cost 0.61 cents each, the same as the extra megabytes in the Standard plan, then the top two plans would, even at Stand Alone rates, cost only $AU92.19 and $AU122.81 per month, respectively. Choices customers would pay only $AU82.19 and $AU112.81 per month, because their identically priced extra megabytes would be tacked onto a ten-dollar-cheaper Lite plan price.

I have replied to OptusNet Cable's support address and asked for their response to this.

Give Dan some money!
(and no-one gets hurt)