On 9 April 2013, the Coalition revealed its long-awaited plan to redesign the National Broadband Network (NBN).
Unsurprisingly, the policy claims to deliver broadband more quickly than under the Federal Government’s current proposal and at a cheaper price. The policy’s aim is for:
- everyone in Australia to have access to a 25 Mbps service by 2016;
- 90% of Australians in the fixed line footprint to have access to a 50 Mbps service by 2019; and
- the project to be delivered with total funding requirements of $29.5 billion.
In comparison, the Federal Government’s policy will provide 93% of Australians with access to a 100 Mbps service – but not until 2021 and at a cost the Coalition claims will eventually total $94 billion.
The savings will be achieved largely by reducing the number of services that will get a fibre connection all the way to the premises. The Coalition will use a “fibre-to-the-node” (FTTN) solution for 71% of premises. FTTN deploys fibre to roadside cabinets, and then cuts over to existing copper lines to reach premises. It’s claimed to be 20–33% of the cost per premises of the Coalition’s solution – but it can’t match the speeds of a full fibre solution.
The policy will also encourage new fibre access networks that could compete with the NBN. Unlike the current policy, the Coalition won’t require these new networks to be wholesale-only. However, they would still need to be wholesaled on an open-access basis and subject to wholesale price caps for products “directly comparable” with NBN offerings. There will also be financial incentives for the private sector to “vend in” networks to the NBN or operate them separately where this leads to savings for NBN Co.
Turning around the NBN juggernaut won’t happen overnight. If the Federal Opposition wins the next election, we expect the NBN to continue its rollout for up to 12 months but with a stronger focus on underserved areas. In the meantime, a number of reviews are planned and there’ll be a complex renegotiation of the Definitive Agreements with Telstra – with a key issue being how NBN Co will access Telstra’s copper lines for its FTTN solution.
There are still many questions about how the policy will be implemented – but also potential new opportunities for the private sector to get involved in the project.
