Opinion: the NBN is a debacle. Where art thou, minister?

By Laurie Patton

Wednesday July 1, 2020

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Today we have finally reached the much-vaunted date on which the government said it would have completed the rollout of the trouble-plagued NBN. Widespread industry expectations of a media blitz by communications minister Paul Fletcher have so far not materialised. No ribbon cuttings and no skywriter plane spelling out “Mission Accomplished”, as some jokingly predicted.

Mr Fletcher had a rolled-gold opportunity to spruik the NBN on Monday when he appeared on QandA. Nothing! Even NBN Co has gone unusually quiet. Silence from chairman Ziggy and his stardust warriors on the NBN Co board.

Speculation in Canberra is that the minister has been told to “Shut the [email protected]#k Up” about this embarrassing exercise given that poor broadband has been found to be a red light issue in Saturday’s Eden-Monaro by-election. Perhaps the celebrations have been placed on hold until next week?

So, where are we with what has been described as the country’s all-time biggest infrastructure debacle?

Well, for starters, a project the Coalition said would cost less than $30 billion has so far blown out beyond $50 billion and they’re still counting. A third of the fixed-line network uses old coper wires (known as FTTN) which are technically incapable of delivering very fast broadband and will need to be replaced – some say within five to 10 years but others, notably TelSoc, argue needs to happen now. Costs for the inevitable upgrade vary, but nobody I know expects any change out of another $10 billion.

This week, NBN Co announced that it has passed 11.5 million premises. However, four million of these have not yet signed up and millions that are receive a slow and unreliable service. This is not the fault of the many great people working at NBN Co. They are just doing what the government forced them to do thanks to Tony Abbott’s desire to pick a political fight with Labor back in 2013.

Apart from its self-inflicted wounds, NBN Co is facing a serious threat from 5G. Once they roll out their 5G networks, the telcos will presumably (and understandably) price access to encourage people with dud NBN connections (about three million homes and businesses) to sign up. This will savage the company’s already challenged revenues. NBN Co is running up a loan debt to the government of around $21 billion and has no prospect of repaying it from current revenues when it falls due next year.

The last time Fletcher mounted a detailed defence of the NBN – back in March this year – he was immediately contradicted by industry experts.

Fletcher claimed that: “NBN Co is implementing new technologies that will allow faster speeds on its network, such as G.Fast and DOCSIS 3.1“. The reality is G.Fast will not fix many of the FTTN problems because of the run-down state of our copper wires. Telstra sensibly stopped all but essential maintenance on its copper network long ago in the logical expectation that it would inevitably be replaced with fibre.

DOCSIS 3.1 – which is designed to make HFC (Pay-TV) cables run faster – might fare better, but the trouble is much of the Telstra HFC cabling is already being overbuilt with fibre-to-the-curb (FTTC) because of uneconomical remediation costs. The entire Optus HFC network has been junked already.

NBN Co and its minister have been eager to highlight the fact that the network hasn’t fallen over due to extra demand during the COVID-19 pandemic. They are correct, but the additional demand during the day has not yet reached the normal peak at night. So, of course, the basic service has not been interrupted. It’s too early to know how most Australians have fared as they’ve launched themselves into online work and study. No doubt some will be fine, but others will struggle with poor internet connections. Spare a special thought for people living in rural and regional areas where the situation is often much worse than in our capital cities.

The signs are this crisis will persist for a long time. I’ve previously suggested the government fund NBN Co as part of its stimulus package so it can employ retrenched workers and send them out to upgrade FTTN connections to FTTC or, better still, fibre-to-the premises (FTTP).

TelSoc, of which I am vice president, has called on Fletcher and NBN Co to immediately commence a second phase of the NBN project. This should include an upgrade of all outdated technology.

TelSoc recommends that the government allow NBN Co to commit all of its profits (when that point is reached) to progressively upgrading the network. The repayment of government loans should be deferred until the upgrade is completed.

So, as we now embark on a theoretical “post NBN rollout” future, where to now?

Over in New Zealand, where they persisted with fibre, 87% of premises will have access to a full-fibre connection by the end of 2022. Chorus NZ, the equivalent of NBN Co, is already delivering gigabit speeds to many of its customers across the ditch. What’s more, over time they have found ways to reduce their per premises installation cost by around 40%.

We need a full-on investigation into the costing of an upgrade and we need the government to find the money.

We need to acknowledge that NBN Co is currently a financial and technological mess. As I’ve been saying for some time now: we need the major political parties to come together and develop a bipartisan rescue plan. Otherwise Australia will miss out on the myriad opportunities on the horizon in a digitally-enabled world. And with an economic crisis unfolding due to the coronavirus we need all the economic levers being pulled right now.

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