How the Coalition stuffed the NBN

Arguably the biggest flaw afflicting the National Broadband Network (NBN) is that it chose to stick with the old copper network across many areas of Australia, instead of rolling out fibre optic cable.

This decision came about because then Communications Minister, Malcolm Turnbull, abandoned plans to build a Fibre-to-the-Premises (FTTP) NBN across most of the country.

Instead, Turnbull implemented a multi-technology mix (MTM) that included previously retired copper cabling.

This shift to MTM was marketed by Turnbull as a cost-saving measure. And while it saved money in the short-run, it greatly limited the NBN’s speeds and reliability.

Moreover, the massive amounts of rectification works has lifted the price tag for the NBN from a previously projected $30 billion to more than $57 billion currently (and growing).

With this background in mind, it is interesting to read that a fully fledged full fibre NBN, as initially envisioned by the Rudd Government, could have cost $10 billion less than claimed by the Coalition and delivered far superior outcomes:

The unredacted documents seen by The Sydney Morning Herald and The Age suggest the cost of rolling out a full fibre network to homes and businesses could have been more than $10 billion cheaper than previously claimed by the Coalition…

Telecommunications consultant Paul Budde said there were “already clear indications” of upcoming cost-reducing improvements in the late-2000s when a full fibre network was being discussed. He said the $10 billion savings figure was “certainly not over the top and on the conservative side”…

Labor communications spokeswoman Michelle Rowland has upped her recent attacks over rising costs at the NBN, saying if the Coalition had continued with the Labor policy, the nation would have a “faster and more reliable NBN, at less cost to the Australian taxpayer”.

Regrettably, Australians have been left with an overly expensive white elephant that costs many customers more than the old ADSL service it replaced, and often is not that much faster.

The lack of fibre means that the NBN was never ‘future-proofed’ and will need ongoing retrofitting, maintenance and investment to bring it up to standard, which will cost additional billions.

The NBN is one of the Coalition’s biggest failures.

Unconventional Economist
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Comments

  1. It didn’t save any money in the short run either, since it has to buy the degrading copper network off Telstra and Optus. Furthermore, in places where both Optus and Telstra cable is available, NBN decide to unplug the Optus cable and install new Telstra copper cables @[email protected] That would have cost the same as installing fibre to the home..

  2. These articles need to start with “sold Telstra” so people realise how much of a systemic problem this sort of thing is.

    • And the scenarios for the next chapter for the Liberal/Nationals are, sell the NBN at knockdown rates to Telstra’s InfraCo (ducts, subsea cables and DC’s) during the flagged T22 strategy separation or buyback InfraCo from Telstra at exorbitant prices.

  3. Old bananas down at the markets are cheaper then the new ones….. Doesn’t necessarily make economic sense to buy them….

    • No, nor to do what the NBN did and buy the old bananas, and pay at least as much trying to freshen them up as if they had just bought the new ones…

  4. pfh007.comMEMBER

    “.. The lack of fibre means that the NBN was never ‘future-proofed’ and will need ongoing retrofitting, maintenance and investment to bring it up to standard, which will cost additional billions…”

    On the bright side the RBA is hungry for government bonds for its nutty QE program so it can buy up that $57 billion and burn the bonds.

    Plus NBN was finished just in time for COVID-19.

    Plus there is fibre to most streets with FTTN so the job of getting fibre to the curb is not a big deal.

    Converting that FTTN to FTTC ….will be a useful make work scheme …….at least it will when the borders re-open and the NBN can fly in staff to fill the “ skill shortages”.

    All good.

    • ErmingtonPlumbingMEMBER

      I’ve been on Optus Cable for over 20 years at my place.
      Been getting letters for over 18 mths telling me I’ve gotta go over to an NBN plan with threats on imminent cancelation.
      2 Letters in November and January seemed to be more urgently stating disconnection was definately going to happen on the 26 of Feb,… so I started shopping the alternatives inc staying with Optus on the new NBN.
      But 2 or 3 weeks ago I got a letter saying I’m to stay on cable as new NBN connection bookings are no longer being taken in my area.
      Do you know what’s going on 007?
      Anyone else?

  5. two plus twoMEMBER

    Not just the old copper for FTTN, the HFC network is a disaster too. Upload bandwidth fluctuates wildly in my area (any given day can be between 2 and 38mbps upload), with some days choking completely (0.0mbps and 50% packet loss).

    • Yep, this is true. Back when NBN Co under Labor appointed a panel of experts to advise on what way to go (the same ones that correctly said that FTTN on a deteriorating, end-of-life copper network would not be worthwhile), they advised that given things like the subscription ratios on the network segments, the amount of infill that would be required, the condition of the networks, the cost of upgrades, etc. that it probably wouldn’t be worth the time and cost to bring the Telstra HFC network up to scratch, and it definitely wouldn’t be to use the Optus cable.

      It took NBN Co under the Liberals something like a year of messing around and wasting money after having acquired the networks to admit the Optus HFC was not fit-for-purpose, and they still haven’t quite got to the point of admitting the Telstra HFC was a bad idea yet… Even some tech industry players like Simon Hackett got this majorly wrong. He was advocating for using the HFC around the 2013 election but I suspected back then that the panel of experts back at the start probably had better information available to make their decision, and time has shown that they were right and that Hackett and the post-2013 NBN Co were wrong.

  6. kierans777MEMBER

    > This shift to MTM was marketed by Turnbull as a cost-saving measure.

    Until it wasn’t. This is failure of every major multi billion dollar IT project I’ve seen, been on, and read in the history books. Bean counters don’t like the cost, and try to “trim the scope” which then sees the project fail to meet any realistic objective requiring billions more to fix. And I thought Myki was a pretty bad example if IT project incompetence.

    In Turnbull’s case he was told to kill the NBN by Abbott to help prop up Foxtel.

  7. “Regrettably, Australians have been left with an overly expensive white elephant” and that is Albanese.

    Recall that Albatross was the relevant gov Minister often on tv, the mumbling stuttering innumerate tied-in-knots fool, up against the glib but lying Turnbull of the reams of imagined numbers. Turnbull said two plus two equals three and Albeasley the inarticulate dope never replied. Instead he blabbered spluttering protests while diving into his stack of papers flicking through them for a number on a page he could never seem to find. – Admittedly, those were interviews on the Voice of the LNP, the ABC.

    “was never ‘future-proofed’ and will need ongoing retrofitting, maintenance and investment to bring it up to standard, which will cost additional billions.” You could well be describing “Our Albo” himself there in every way except for ever attaining any acceptable standard.

      • Nope. You’re so far into ’em and rusted-on the rust has affected your apprehension of real world facts – just like your Albo eh? Rudd took to long to get it going. then began the roll out significantly in the wrong places failing thus to hook up as many customers quickly and failing to bring in those extra revenues and ultimately votes. Albatross had the easy job of exposing Malware’s Fraudband and selling and saving a FTTP nbn and utterly failed every time he err, arh, um, er, spoke.

        • BTW, Gillard extended the bible bashing libtard hack Mark Scott’s MD of the ABC contract by an extra five years without him even asking! Scott then blocked any competent analysis of fraudband at the ABC among other things he did to see the LNP elected. Gillard… ffs!! Scott under Abbott and Malware then got to enlarge the ABC religious department budget to be the biggest on Earth and about the biggest still in the ABC! Gillard… Rudd… Albatross… ffs!!

        • Was never gong to matter what labor did in this space. the election the ALP lost that put the LNP back in power was won on the back of claims of internal ALP conflict and claims of ALP monetary mismanagement…. Ironic how things have gone since then on those fronts…

          A mate of mine was trying to convince me to join, and dragged me to an LNP meeting at parliament house, the opening statements at the meeting was along the lines “Labor has caught us wrong footed on this NBN thing, its a great idea but we need to recast it as an even better LNP idea”. The rest of the meeting was spent discussing how they could get the public to believe it was going to be an expensive white elephant and how they could do it cheaper…

          Again, ironic how things have played out since…. I never joined and he left the party a few years back, disillusioned….