NBN: A $50 billion white elephant

By Leith van Onselen

ACCC head, Rob Sims, has hit out at the $50 billion National Broadband Network (NBN), claiming that many households are paying more for worse internet. From The Australian:

Australian Competition & Consumer Commission boss Rod Sims yesterday warned NBN Co was failing to deliver on its promise of faster and affordable broadband…

“We are quite possibly charting a course that favours meeting NBN Co’s revenue projections at the expense of the NBN’s potential to benefit the economy and consumers,” Mr Sims said.

“We are now observing prices of low-speed NBN plans offered to new customers that are at least $10 per month higher than what consumers paid for equivalent plans on the ADSL network.”

NBN wholesale prices for the 12-megabit plan will increase from $12.75 to $17.50 a megabit per second, but many consumers are already paying more for basic NBN plans than existing ADSL services.

Optus CEO Allen Lew has also slammed the NBN’s quality and believes mobile phone providers should be allowed to replace the NBN’s fibre-to-the-node technology with ultra-fast 5G fixed-wireless broadband, claiming this would be less expensive than NBN Co having to install fibre-optic cables in literally millions of homes.  From The AFR:

Mr Lew said the NBN was “falling short of customer’s current expectations around speed, reliability and service performance”.

“We also must look beyond our shores to what is being done globally and ask ourselves whether we are keeping pace with other developed countries that are heading towards affordable, gigabit services,” he said.

I’ve got no idea what the answer is, but delivering Australians a competitive and reliable internet service is a must. We shouldn’t be charged some of the highest user fees in the world for a sub-standard service.

Add the NBN to the long list of policy failures worthy of a Royal Commission!

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Comments

  1. Perhaps those FTTN boxes can be refitted with charging points for electric cars when 5G takes over.

    😉

    • kannigetMEMBER

      While its better than 4G its still wireless tech and suffers the same bandwidth contention issues. It also has a smaller range leading to an increase in towers required to cover the same area.

      Throughput increases as a result of increased frequencies.
      Bandwidth increases as a result of increased range of frequencies.
      Coverage decreases as a result of increased frequencies and is attenuated by more materials….

      5G will suffer the same issues that 4G in congested areas…. i.e. no signal, drop outs e.t.c. More towers mitigates this but who in residential areas will want a transmitter tower every 500m….. Power poles cause enough access issues..

      Fibre allows for simple increases in throughput as needed. i.e. change the transceiver on each end and go from Gigabit to 10Gigabit…… No need to replace the fibre. What happens when 6G comes out? replace all the towers, possibly increase the tower density and replace all end user equipment.

      • robert2013MEMBER

        I think people will happily put up with towers every 500m. In Merimbula they took so long setting up decent internet, someone took it into their own hands and built his own line of sight microwave wireless network all the way to the exchange in Bega. Little dishes on half the houses in the town. I can’t even tell where his base stations are. Pretty good tech. Works well. Suspect it’s a pilot in a small town and will appear in a big city soon.

      • mate NBN isn’t available in my area yet and my ADSL2+ is so bad I use 4g on my phone now… might have something to do with probably being the first copper cable laid back in the day but f%ck me… it’s a cluster f$ck.

      • Your right, it is. But thats what the NLP wanted because Uncle Rupert told them to scuttle it.

  2. DominicMEMBER

    Another monumental Govt-sponsored c0ck-up. Who knew!

    Thank goodness it was only $50bn of taxpayer blood, sweat and tears.

    • Not much sweat involved in issuing Australian government securities especially when we can flog them to foreigners like a bag of minties.

      But I agree it would have been better to use that magical money power for something that works.

      • It would have worked if Abbot and Turnbull didn’t sabotage it. Fvckers should be criminally charged for what they did.

      • +1. Pure infrastructure sabotage by Abbott/ Turnbull on behalf of uncle Rupert.

        MB isn’t innocent either, they supported the LNP 120 year old copper FTTN plan which predictably has become a monumental disaster.

  3. kannigetMEMBER

    The one thing politicians seem good at is declaring a good idea will be a white elephant and then ensuring that is the outcome. If only they could do the opposite, imagine how this amazing this country would be.

    Its only a white elephant because the NLP decided to make it so. As a friend of mine used to be politically active in the NLP, I was invited and I attended a NLP meeting at Parliament house when the NLP were still in opposition. The Advisor to the shadow communications minister ( an ex Optus Executive ) stated that the party had been caught wrong footed by the policy and while it was a good idea the NLP needed to attack it on economic grounds and reshape it as a NLP focused idea. As we now know they were successful.

    Personally I think the NBN is easy fixed, Write it off as a loss making utility and scrap the idea of selling it to recover costs. return to Fibre to the Home. Reduce the costs of becoming a provider on the network. Offer 5G as a temporary last mile in less congested areas.

    • Unfortunately that will not happen because there are too many half wit neoliberal clowns in the ALP.

      They will write it down and then sell it off so some foreign mob like Singtel can get to work creaming the profits.

  4. Ronin8317MEMBER

    The ‘C’ in ACCC stands for Cartel. ACCC destroyed broadband competition in Australia when they decided NBN should have 121 points of interconnect.

    As to ‘cheaper and faster’ broadband, have Rod Sim even READ the business case for NBN? The business case is slower and more expensive, and NBN will eventually increase the fee they charge to over $100 per household for just the basic connection. That is the only way NBN can get the 7% return on investment.

  5. StephenMEMBER

    I bet a lot of engineers are Optus are cringing at their CEO saying that about 5G. Really can’t believe that he’d be so uninformed at the RF spectrum limit issues but I guess CEOs are generally just sales guys… 5G will be awesome, but in general will be complementary to fixed line – even with small cell technology it will have to be, otherwise congestion will worsen and prices for data will have to shoot back up again.

    At the end of the day, it’s sad that the LNP put a policy into place (against all expert advice) that turned what was a lie about the NBN being a white elephant into reality in just six years… Their brain-dead ‘multi-technology mix (MTM)’ strategy of upgrading mostly obsolete technology has wasted us at least $30bn of the $50bn (so far) project cost. Probably more if you take into account that the copper technologies are far more expensive to maintain than modern, super-reliable fibre.

    • It was always a white elephant. It was never thought out and never costed. The LNP were trying to make it fit within possibilities. Just another brain fart. I wouldn’t mind a RR convertible but I can’t afford it.
      What resources public utilities would everyone want to sell to foreigners to pay for the RR system they all want. Please nominate all companies mines and farmlands you are prepared to sell for it. As opined by the Phantom it was just a DPF project that has morphed into a vehicle for buying more and more and….

      • kannigetMEMBER

        I know for a fact that the NLP didnt care if it was good or bad policy, it was labor policy so had to be scuttled. There was no attempt to make a bad idea look good, it was all about making a good idea look bad.

        There was a business case done, the NLP just kept repeating the lie that it was not done because they couldn’t fight the conclusion in the Business case.

        Everytime the NLP opened their mouth about the NBN they claimed it would was running over budget, and would cost more. They went from claiming it would cost $50B to claiming it had already blown out to costing $90B. All before they touched it , nothing had changed in the roll out and spending was less than $10B.

        To claim the NLP was just trying to make it fit within possibilities is ludicrous. Anyone working in the Industry knows that the Mixed Mode model they proposed was always going to deliver less for more. Its why French telecom dropped mixed mode and pushed ahead with Fibre to the home and Turnbull knows this as he is a sizable investor.

  6. Some say “driverless cars can not exist without 5G”.

    So if we can not have 5G everywhere, we can not have driverless cars.

    The state Labor governments screwed up by not requiring new suburbs built after 2000 to have FTTH. In the 1980s or earlier, new streets in Melbourne were banned from having overhead power lines. The state Labor governments also screwed up by not requiring new suburbs to have a third water pipe for greywater supply.

    Smart councils and stupid councils:

    the Council had the foresight in the very early 2000’s to get developers to stick in conduit as part of all greenfield development. This conduit is now Council owned and was a condition of developers getting their plans approved.

    https://forums.whirlpool.net.au/thread/1564821#r26572772

    To developers it was just another pipe in the ground and a costly lunacy. To residents it was an empty network full of potential not realised.

    But finally, after ten years, Victoria’s Whittlesea council’s foresight to install under-ground communications pipes alongside gas and water in all new roads around South Morang is paying dividends.

    https://www.smh.com.au/technology/empty-pipes-now-paying-nbn-dividends-20120704-21gpf.html

    What an absolute joke. All councils should have done the same. In about 1996, Kerry Stokes told the ABC that new suburbs should be required to have FTTH. The cost of putting in FTTH in a new suburb was almost the same as putting in copper phone lines. A few brand new suburbs started partnering with Telstra to install FTTH in 2000 or earlier.

    Anybody know when Telstra FTTH (called Telstra Velocity) began?

  7. scootytootyMEMBER

    My phone line was taken out by a tree and while we waited for it to be repaired we were hot spotting everything (TV, computers) off the mobile phones and it was faster. Only thing is don’t go near the Playstation store and download a game, holy crap they’re big.

    • Worked that out myself a few years back. Without TV’s and Foxtel’s brainwashing adverts and news breaks to keep the peasants informed, Murdoch with his USA allies cannot control our minds and thoughts as easily. Especially with few reading papers these days.

      I remember when chevron had brainwashing ads running that no one even noticed. Design to sit in your long term memory so when you think of chevron you think of beautiful oceans and whales instead of war, corruption & pollution.

  8. I’m still fuming that having just done relatively large renovations, that I couldn’t at the same time add FTTH rather than the HFC. I would have been happy to pay for it.

  9. AndynycMEMBER

    Doesn’t 5g still struggle to get through walls? 5g still sounds like a pipe dream for the cost

    • yeah so far its a line-of-sight technology. Its so far aimed at people in remote locations that will position a 5g antenna directly towards a tower.

  10. ran a speed test on my ADSL last night, got 110 mbs, for $73 via a rip off plan with telstra….200 gb

    they now want me to pay $90 for a 50 mbs plan via NBN……..200 gb

    will not be signing up for as long as possible, hopefully labor write down the business when in and plan cost drops.

    • Given ADSL2+ has maximum theoretical speeds of 24 Mbps not sure how you managed that. TPG has unlimited 50 and 100 plans for $70 and $90 respectively. Gotta stay away from telstra

  11. If you took the NBN spend out of National Capital Investment figures it would have been pretty grim for Oz.
    What I call it’s replacement, the NDIS, is propping things up for the moment, I don’t know whats next ?

  12. ChristopherJMEMBER

    a lot of the problems people experience, regardless of whether FTTN or FTTH, is due to ISPs leasing the minimum amount of bandwidth and scaling all customers back when its busy.
    Aussie broadband has it’s own fibre and adds to it when new customers are added. Oh, and I recommend you put a fixed line cable into your modem, a lot of speed lost with wifi. Oh and Linux. Heaps less resource hungry and virus prone and prolly save you 50gb in space. And free

    Yes, a lot of money spent on NBN and much of the policy, like the digital tv roll out has favored incumbents (indeed they were given free, valuable, bandwidth).

    NBN wankers like me just got our zero hours 25 per hour casual work. Hard too. The real money accrued to the regional planning/oversight companies and those that had the wherewithal to have some money, equipment and expertise to run a install operation (or cable manufacture). Big money, billions accruing to those at the top. Probably like MMT will work with politicians and their mates lining up for the contracts and concessions….

  13. use cases for nbn presented so far
    download porn
    download games.
    don’t forget netflix 🙂 we’ve paid $50billion for this.

  14. DefinitelyNotTheHorribleScottMorrisonPM

    Internet is an impossible fantasy like electric cars and Brexit. Money is always best spent on negative gearing.

  15. As someone who got the good version, I gotta say it’s great. Given I’m in a region I ended up paying the same as what I paid for ADSL, which dropped out any time it rained.

  16. Its become apparent to me that rolling out a NBN for $50Billion dollars, assuming every Australian (even assuming the majority of Australians) would want hella-fast broadband internet for absurd costs ($1200 each year, really?! WTF) is a rather stupid policy when there are much cheaper competing technologies available that meet the needs of, oh I dunno, say 95% of Australia’s population LOL !!

    Hella Fast internet ain’t potable water, its not electricity, and it ain’t natural gas….. so why should the public purse fund it being reticulated to each and every house-hold in the nation at any cost – its just fvcking silly! so silly! FFS

    • drsmithyMEMBER

      Same reason they funded it the first time (well, at least until Howard sold it off) ?