The NBN - A beginner's guide

  • Government wholesaler
  • Fibre to 93% of poperties
  • Mobile and Satellite for the remainder

Searching for a high speed, fixed line broadband connection (ADSL) can be heartbreaking (for this article, we’re going to exclude Mobile Broadband, which is still in its infancy, and Cable, which is very limited). Many people have been frustrated to find out that, for one reason or another, they simply can’t take part in the best deals and offers that their next door neighbor has full access to!

Another bug-bear for many is that they’re limited to one or two carriers that are outside of their price range, or don’t offer a plan suited to their usage. At the heart of this issue is that Telstra Wholesale, the inheritor of the old Telecom Australia network, still owns the majority of the infrastructure under the ground, which ADSL relies on. Telstra Retail (ie. BigPond) will serve all areas that Telstra Wholesale covers, which is essentially everywhere – and BigPond does not have to pay to access this area. The downside for BigPond is that it must service even those areas that are not profitable. The upside is that they can provide almost universal coverage.

Meanwhile, the competitors have to pay to use Telstra Wholesale’s infrastructure, and so have to cherry pick which areas (exchanges) they will install their equipment in. They will choose the more highly populated areas, where they can ensure they have enough potential subscribers to justify setting up in that area. The upside is that they can be more competitive, the downside is that they cannot serve as many people.

This issue is amongst a host of others contributing to the justification for a national network that seeks to provide fixed line, high speed broadband to at least 100% of the population – that doesn’t also have a retail arm attached to it. A good simile would be a national provider of roads that doesn’t also sell cars. That’s not the best simile, but it serves to illustrate that there were many who felt that the government needed to provide an infrastructure that sells access at a fixed price to any (and every) carrier, so that carriers would compete purely on service and price, and not based on territory.

This is a simplified version of the issue. There were other factors, including a push to offer broadband to rural and semi-rural areas that are often underserved by the broadband market. There are also issues at stake of national pride, as Australia ranks near the bottom of developed countries in broadband penetration.

The opposition to this initiative usually centers around its cost to taxpayers, and around the wisdom of letting a bureaucracy run a system that requires constant maintenance. These arguments are often as political as they are operational, and can get quite fierce. We’ll leave these issues aside – because while there are still detractors, the National broadband Network (NBN) has been a reality since April 2009, when the preliminary rollout of high speed fibre optic cable began.

The NBN will provide high-speed broadband access to every home, workplace, school and hospital in Australia. The NBN will deliver speeds up to 100 times faster than many people experience today through an infrastructure program involving optical fibre to 93 per cent of premises. Remaining premises will be connected via next-generation fixed-wireless and satellite services that will provide peak speeds of 12 megabits per second.

The NBN, while not a retail provider itself, is a company that will have some responsibility for maintaining your service. NBNco will offer several services on their network, though the only services confirmed for now are voice calls and broadband internet. NBNco will effectively serve as the ‘linesmen’ for the network, attending to service faults and breakdowns.
The NBN has not yet been rolled out for general access, though the first implementation of services is scheduled to begin September 2012. Exetel (1300 106 571) and iiNet (1300 106 571) have given glimpses of what their plans will be like when the NBN has been rolled out, though these are subject to change. As services come online, Compare Broadband will update to reflect the plans available.