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- 14 February 2005
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NBN customers can choose 12/1. The fact that 75% of them choose to pay more for higher speeds than that suggests that demand far exceeds 12Mbps. Because if it didn't, then people could save money by choosing the lower speed.
Go to any service station and watch people filling cars with petrol.
Now realise that the vast majority of cars on Australian roads are built and tuned to run on 91 RON petrol, a small number require 95 and very, very few require 98.
But you won't have to wait at the servo for long to find someone filling a vehicle with 98. A vehicle that runs a compression ratio of 8.5:1 and which has the ignition timing already set to minimal advance in order to comply with emissions requirements. But it costs more so it's automatically better, right?
Likewise with the NBN, there's zero practical benefit in a high speed connection if you're just going to read a few emails and visit forums like ASF. That won't stop such people choosing to pay more in a "mine's bigger than yours" type of logic however, just as it doesn't stop them putting slower burning fuel in cars because they think it's somehow better.
The notion that consumers do what is most efficient and economical works in theory but we've got an entire industry, marketing, to persuade them to do otherwise and it's effective in practice. A minority of consumers will consistently make the "right" choice in any given area of spending, and practically nobody will do it across everything they buy.
No doubt there will be some people who have done a rational analysis of their internet needs. But for most, it's either "pick the cheapest" or it's "pick the most expensive" with no real effort to get it right as such.