Coalition and Labor NBN both unfeasible

  • Both policies found to be problematic
  • Completion timeframe, costing and speed issues
  • Current plans for the future of the NBN

The fate of the NBN has been dubious since the September 2013 Federal election. Since the Coalition secured the majority of votes in the election the public have been waiting to see what the next step in NBN policy would be. Would they continue to roll out FTTP NBN in areas that had been half completed, would they immediately begin FTTN construction, would they deliver the NBN network that they had promised during the election?

Speculation was rife throughout the last half of 2013. This is not surprising considering the mammoth task the Coalition had ahead of them; you don’t just win the election and start building your FTTN national broadband network the next day. The Coalition required new negotiations with Telstra, a new NBN Co board of directors and a strategic review of the current state of the NBN project. The public’s reaction ranged greatly, some were optimistic that the Coalition would stick to their election promise and reform the broadband in Australia, others clung to the hope that the Coalition would initiate a Labor style FTTP NBN and attempted to rally support through a petition, and others were more pessimistic and believed the Coalition could not deliver their election promises.

It’s been four months and we may finally have some solid answers as to what the government has in store for broadband in Australia and what an NBN rollout under the Coalition will look like. Last week NBN Co released its Strategic Review report which analysed the current state of the NBN and the possibilities for broadband through NBN Co in Australia.  The major finding that NBN Co made is that both the Coalition and Labor’s NBN policies have feasibility problems.

To recap, Labor’s NBN had proposed to deliver high speed FTTP (Fiber to the Premises) broadband to 93 percent of the country by 2021 costing $43 billion, however NBN Co’s findings have calculated that the time of completion would be closer to 2024 and would cost $73 billion to complete. Furthermore in order to achieve the intended rate of return the cost of average broadband bills would increase by 80 per cent.

NBN Co has found the Coalition’s NBN policy also has feasibility problems. The Coalition’s aim to deliver guaranteed speeds of 25mbps has been found to be problematic and completion date and expenditure costs also unfeasible.  To recap, the Coalition proposed to deliver high speed fiber to a cabinet or “node” on the street and then use the existing Telstra copper cabling to connect to each home, all at the cost of $29.5 billion. The review found that the promised 25mbps download could not be guaranteed and that acquiring and maintaining Telstra’s copper network will cost more than anticipated.

Considering the findings, a complete reform of Australia’s broadband appears to be unrealistic at this stage. So what will we have? For starters the government has revoked their promise to deliver speeds of 25mbps to all Australians by 2016 through FTTN technology. Instead their new approach is what they are calling an “Optimised Multi-Technology Mix”. This mix is a combination of FFTP to 24 per cent of homes, a rollout of FTTN to 32 per cent of homes, 12 per cent to receive some sort of Fiber to the basement, and 30 percent to receive no upgrade at all. Projected completion has been pushed back to 2024 and it will now cost an estimated $41 billion. For those who will not get an upgrade the government anticipates using the already constructed HFC (Hybrid Coaxial Cables) from Telstra and Optus to deliver better speeds.