NBN Just Got A $20 Billion Government Loan To Finish Its Rollout

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The remaining money that Australia's national broadband network company needs to finish the rollout of the country's multi-technology mix fibre- and copper-based — $19.5 billion, to be exact — will come from a government loan, rather than private investors NBN had hoped.

In May, the government's 2016-17 Federal Budget showed that NBN would need an additional $16.5 to $26.5 billion to finish the network. It had originally planned for that money to come from "significant private sector investment", with the government capping its investment at $29.5 billion.

Until now.

Today, government communications minister Mitch Fifield released a statement with joint NBN shareholder minister Mathias Cormann saying that the investment will allow the government-owned company to continue operating without waiting for outside cash:

"To help ensure that NBN can fully focus on the remaining rollout as it significantly ramps up, the government has decided to provide the remaining funding required to complete that rollout through a government loan to NBN Co Ltd on commercial terms."

"Fully focus" is the same term used by NBN chief executive Bill Morrow in his statement:

"This allows the NBN executive to fully focus on building and operating the network, to bring fast broadband to all Australians by 2020. NBN welcomes the decision, which is in the best interest of the Australian taxpayer."

Cormann and Fifield said that they expected NBN to repay the loan after the currently government-owned company is sold off to private operators — hopefully — after 2020.

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Comments

    that $76 billion now, with the $56 billion construction costs , closing in on the Coalitions doomsday figure of $94 billion for Labors FTTP

    Congratulations - 75% of the cost for 25% of the speed.

    And its already obsolete.

    FFS

      I assum the 25% of the speed figure comes from the 100Mbps peak figures for FTTN/B versus the FTTP 400Mbps speed? FTTP could have been scaled to 1000 or more Mbps...

        or the 25Mbps on fraudband 'guaranteed' vs 100Mbps on FTTP

          My area is going to get HFC soon. At the two lowest of three tiers it's worse (slower, limited and more expensive) than my current ADLS2 connection. At the top tier while it's expensive it's claimed I'll get 100Mbps - though in the real life testing it's supposedly under 80Mbps (but faster than the 18Mbps I get on ADSL2). Still it's the upload speed that is killing me. Waiting more than 24 hours for an uploaded to cloud services to complete is almost unworkable.

          Meanwhile in the US they have started rolling out 10Gbps fibre.

        FttNo 25Mb/s once a day vs FttH 100Mb/s initially & 1000+ any time later (formal cap).
        That's <2% effectiveness & long term more expensive.
        All for the speeds ADSL2+ was delivering to some 10 years ago & cable was superior long time ago.
        Effectively a disastrous waste of Money & TIME for a downgrade to many.

      My understanding of this is this is the remainder of the $56 Billion not an additional 20 Billion, so the cost is still 56 I think. The government initially funded $29.5 billion

      This $20 billion was rather over optimistically expected to be source from private investors and unsurprisingly that hasn't happened.(Return on investment on FTTN is probably crap so no-one was interested.

      That's my understanding anyway...

      Well that's an Einstein take on things - not. So the cheaper version becomes more expensive while the expensive model doesn't go up accordingly. If only I could by a Merc for the price of a Holden Commodore.

    Who would have though that the private sector would have no interest in investing in a network that is based around inferior technologies, and will have significantly higher maintenance costs in the future.

      That's ignorant, stop it, you're being ignorant!

        I'm glad you asked Leigh, well, we've had the additional NBN funding out to tender since it looked likely that we would win the 2010 election and there was a lot of interest early on and we were actually very close to signing up three or four major international Telco's who were each ready to inject more capital than was requested or projected to be required.

        Things started to turn sour, however, when it became obvious that Tony wanted to persist with a primarily copper connection to households and, as part of the second-stage tender process, the Telco's were given access to lightly redacted documentation about the condition of the network that they would ultimately be paying to purchase and either maintain or replace - maintain being the likely option as per Tony's leadership at the time.

        I believe the last communication we had from any of the tender responses was around mid-2011 when we asked for further commitment to the two remaining interested parties and, as yet, have received no further reply.

        I can assure you, though, Leigh, that the tender is still open and we've been pursuing outside funding just as vigorously as we've been advertising and educating the public about the benefits of our vision of the NBN - houses flying into space, lasers flying through streets to indicate the speed - at least once 'wave' every 6 to 9 months, just to let everyone know the NBN is still a thing worth talking about and, obviously, waiting for. And investing in.

          Im Gona build an NBN, and its gona be great, and im gona get taxpayers to pay for it

      The Private sector weren't too interested when Rudd's NBN mk1 was offered to them and before he decided that Conroy could build it for $20b and save the nation a few bob. Only Australia has gone this route in creating a new nationalised Industry. Now we're complaining that our internet is falling behind other nations who didn't create an NBN but went to the private Telco's with expertise to upgrade cabling to fibre to the node for them.

    Just throw another $20bn on the pile for the 'consolation prize' solution.

    Are Labor going to use this for political gain? They darn well should. As more time passes the percentage of the population who see the NBN as necessary infrastructure grows. Hopefully more people realise, in hindsight, that whatever the Libs said about the NBN when they were in opposition is now demonstrably false.

    I mourn Delimiter's passing. I want to read their wall of comments, there was always gold in them thar' hills.

    @over30yearsofsharing - thank you, but I need more.

    We probably could have bought New Zealand for that money.... and they still have better internet than us.....

    hahahahahahhahahahahahahahha

    It's like we all saw this coming yet > Australian Government.

    Such a joke.

    All those years of blasting Labor for money wasted, and they go and pull this. These a***holes are the biggest hypocrites in living memory. And of course they'll find a way to blame Labor for their own idiocy. Again.

    So we get to spend the exact same amount of money, if not more, for an inferior network that its own champions have admitted will not last more than 10-15 years without a major rebuild. What a f***ing joke.

      I feel your pain!!. Every time I read something about the fraudband I get so sad that the Australian people were lied to for the Coalition's own financial gains and at the expense of all business that could have benefit from actual fast internet in metro AND regional areas.

    ”Cormann and Fifield said that they expected NBN to repay the loan after the currently government-owned company is sold off to private operators — hopefully — after 2020."

    Ummm, isn't selling government infrastructure how we ended up with Telstra Wholesale (and Telstra Retail)? Look how great that turned out for Australia.

      In that instance you ended up with a company both selling and buying the same product (wholesale and retail). In the case of the NBN they are only a wholesale seller. So long as the law prevents the NBN from selling direct to households it shouldn't be an issue.

        "So long as the law prevents the NBN from selling direct to households it shouldn't be an issue."

        @petergdownload

        Whooooosh

    The primary limiting factor is the continual physical decline of the Copper utilised in the FTTN rollout. It costs about $500 Million dollars a year to maintain the degrading Copper. This is why the contractors are seeking to use imported low cost Labour to continue the maintenance. Improved coding algorithms allow greater speed to be extracted on Copper but the degrading distribution cable will remain its Achilles heal whilst it remains part of the delivery infrastructure. The only true answer is Thin Fibre to replace the Copper "O" pairs and the sooner the decision is made to rollout thin Fibre the better it will be, for users to avail 100Mb/s. There is no point in the entire Nation going beyond 100Mb/s until the Core Backbone is ramped up from 100Gb/s to 400Gb/s TCP/IP or even jumping over 400Gb/s and going straight to 1 Terabit/s on Ethernet. Even now the SDH backbone is faltering and the cost to move to 400Gb/s or 1 Terabit/s will cost the Carriers many ,many Billions. and that is completely separate to the $20 Billion NBN requires to complete the customer end terminations in Businesses and residences.Personally, I think they need more like $30 Billion more. Finally, completing 20 Million terminations by 2020 means about 13,500 per day, every day actually terminated.They have no hope and should stop fooling anyone that they can.

      And yet people are complaining that we've been too slow off the mark in upgrading Internet connectivity, yet all developed countries have not created a new state Industry but have paid Telco's to upgrade to FTTN to limit the cost to taxpayers.

    So the Oz taxpayer funds this POS, then has to pay a premium to access a sub-standard facility?!
    With the amount of funding taxpayers have dished out why are we not shareholders in this enterprise? By this I mean not having to pay for the same thing twice and not reaping any $$$ benefit from it (ie. dividends) over the next say 20 years or so... assuming the NBN can last that long.
    Screwed over by successive governments once again...

    THE CHAOTIC LNP FRAUDBAND A BIG JOKE.

    Now our only hope is that SpaceX satellite service will save us

    So Ditherer Turdball and his crony communications minister,
    Potatoehead, fail to get private sector investment for the NBN. I can't think of a more ringing condemnation of Ditherer and his MTM, fibre to the copper model. I mean with bond yields at historic lows you'd think that our super finds might think it would be worth a go, you know even if its just because of some silly diversification mandate...But no even they can't see a future in investing in outdated tech and buying something worth half as much as it costs. Moreover it would just be a proxy investment in Telstra to whom the government will eventually flog off the network to (once they declare it a failure due to Labor), and Telstra's share price performance truly sucks. Can we have a royal commission now?

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