Another $16b needed to fix NBN debacle

The hits keep on coming for Australia’s beleaguered $51 billion National Broadband Network (NBN), with a parliamentary inquiry told that the NBN has put an “artificial handbrake” on fast download speeds, raised the price of accessing the internet, and repeatedly failed to meet its own revenue targets:

The latest NBN complaints came at the first public hearing of a Joint Standing Committee inquiry into NBN’s business case and services to small businesses.

Vodafone chief strategy officer Dan Lloyd spearheaded a charge for changes to the NBN’s pricing structure, saying users were being slugged too much to access broadband and particularly high-speed plans.

“Our view, which is shared by many others in the industry, is that NBN’s CVC charge is a speed tax on NBN customers and it must be abolished,” he said.

“There are many open-access fibre networks in the world but only NBN has sought to introduce an artificial handbrake on the performance of its network.”

Mr Lloyd said the price of delivering broadband at the “same speed” to customers over the NBN had increased by 50 to 60 per cent since 2011, and as many as 40 per cent of Australia’s internet users would consider using a mobile service, such as 5G, if high prices remained.

“If costs continue to go up for retailers to sell the same speed service on the NBN, the industry will find substitutes to meet the increasing customer demand for broadband, including 5G,” he said.

Meanwhile, the latest quarterly broadband speed data from Ookla has ranked Australia 64th globally, landing it in the same realm as Uruguay, India, Kazakhstan and Vietnam:

First, here’s the global average rankings…

Our services deliver an average of 42.2Mbps/19.70Mbs and rank a lowly 64th globally. This lands us in the same realm as Uruguay, India, Kazakhstan and Vietnam…

Even if the vast majority of homes did get a full 100Mbps downstream, that would only land Australia in 26th place or so on the global rankings.

This highlights that not only are we living in a hyper-connected world, but our infrastructure is also sub-standard and we’re not catching up. If anything, we’re falling behind as other economies catch up and eclipse our woeful NBN speeds.

According to RMIT’s Associate Professor of Electronic and Telecommunications Engineering, Mark Gregory, Australia needs to spend another $16 billion to repair the NBN so that it is fit for purpose:

RMIT’s Dr Mark Gregory has estimated the potential cost of repairing the discredited MTM at around $16 billion. Internet Australia chair, Dr Paul Brooks, argues that the replacement process should begin pretty much straight away once NBN Co cries “mission accomplished” in June this year – the scheduled completion date for the MTM-based rollout.

Swinburne’s Dr Steven Conway agrees with Brooks that while it will be expensive fixing the NBN must be done without delay.

He told New Daily:

‘When you compare us to any other first-world country, in terms of the speed at which data can move and the amount of data we have to move, we’re going to be left in the dark ages.’

That would take the NBN’s cost to nearly $70 billion.

What a debacle.

Unconventional Economist
Latest posts by Unconventional Economist (see all)


  1. Colour me surprised. Still, think of the ‘boost’ to GDP. Always a silver lining to these fck ups. 😉

    • That’s it. That’s the sweet sweet fiscal stimulus y’all cry out for. Those subcontinental (why always subcontinental? Must be some kind of racialist recruitment policies by NBNCo…) telco contractors are licking their lips, I’m sure.

      • NBN shows what a “job guarantee” will look like. Create new jobs but give all of them to vibrants. Brilliant!

        • Which is why I always scratch my head when people get excited by stimulus – somehow they think they personally will benefit, when in reality only a tiny proportion whose jobs are directly linked to it actually benefit.

  2. We have a 50 mbps plan which is plenty for our family of 5. We can upgrade to 100 in due course and that would probably be fine for the next 5 years or so. As I understand it though, that is probably the limit for the HFC that we have so if we do want faster than that in due course we will have to add fibre to the premises.

    • It’s only $20,000 to do that. Your house will have gone up by multiples of that by then, if the Libs stay in power.

      So it’s fine.

      • Actually it looks like it will only be 2 or 3k (less if I can convince a bunch of the neighbours to do it at the same time).

        Still, it too much to bother with now while 100mbps is the max anyway.

  3. That would take the NBN’s cost to nearly $70 billion.

    I’d like to see a full breakdown of the costs so far. Who collected all those billions? Was it
    * optical cable sellers
    * ditch digging and dodgy wiring Indians (who drive beaten-up utes)
    * share market investors
    * banker middle men
    * elite CEO type people
    * commercial in confidence spivs
    * share market investors
    * ordinary mums and dads

    • Accenture have over 500 “consultants” on-site at the minute. Most will getting paid peanuts based on the demographic.

      • alwaysanonMEMBER

        But Accenture will be billing them a bomb. The arbitrage on those wages vs what they charge is the (very lucrative) business model…

  4. The FTTC, FTTP connections are capable of delivering much higher speeds right now and the HFC should be fine as well…..our HFC connection has been solid close to 100/40.

    The speed limit has one function.

    To stop the peasants with FTTN from grumbling about being 2nd class citizens and demanding an upgrade to FTTC or FTTP.

    • ignoratio elenchiMEMBER

      My FTTC connection is 109mbps at the pit. This is the artificial limit set at the POP. The theoretical maximum is much higher. allows 1+ Gigabits / second.

      (the source of the reading at the pit was the guy who did the install)

      Your HFC when it was Telstra was probably giving you up to 150 mbps down.

      Agree the limits are artificial. The reason why our download speeds are so slow is due to way NBN prices its products.