This Is How Much The NBN Spends To Hook Up Your House

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During its entire eight-year existence, the cost of pushing fibre all the way to the home has proved a political headache for the NBN. The former Labor government planned for almost universal fibre-to-the-premises (FTTP) but the Coalition, citing excessive costs, sacrificed performance and scaled the rollout back to fibre-to-the-node (FTTN) — leaving old copper lines in place for last few metres.

In its latest half-year financial presentation on Thursday, the NBN revealed the cost of connecting each home to FTTP, FTTN and other technologies in its catalogue.

It costs $4405 for the NBN to hook up an existing house (“brownfield”) with fibre all the way to the premises. Fibre just to the node – a communal box in the neighbourhood – with existing copper connecting the rest of the way, costs the NBN $2172 per premise.

While that is a significant difference, there is a compelling argument to lay fibre-to-the-premises for new housing developments (“greenfield”). The NBN revealed that cost is just $2,504 per premise.

In some areas, the NBN uses Telstra’s old pay-TV cable – called hybrid fibre coax — and this cost compares favourably, at $2259.

In locations where physical NBN connections are difficult, fixed wireless technology is used to deliver broadband. This costs $3551 per premise.

The NBN is introducing a new technology, fibre-to-the-kerb – or “curb”, as the company calls it – which runs fibre to the front of the property, allowing less copper to be used and provide faster performance than FTTN. There are no costs available on that method yet, as deployment has not yet started.

Accompanying those statistics were the latest financial figures for the NBN, which saw its revenue for the half-year ending December 31 more than double on the same period in 2015 – going from $164 million to $403 million as the network progressively covered more premises.

However, the organisation copped yet another heavy loss — $1.83 billion for the six months ending December 31, up 48% from the same period in 2015.

Joel Clarke, chief information officer of NBN rival Fiber Corp, criticised the agency’s losses, questioning whether the sacrifice of FTTP was worth it.

“Not only has NBN failed the Australian public and business by not delivering fiber to the home to brownfield, or new builds under 100 dwellings, they managed once again cost the Australian taxpayers,” said Clarke.

When told that NBN chief Bill Morrow called the latest financials “impressive”, Clarke said that “it’s impressive he still has a job”.

The NBN is now covering 3.8 million premises, which is about one-third of its target, with more than 1.6 million of those actively using the network through retailers. The organisation had previously stated a goal of reaching the halfway mark — 5.4 million premises – by the middle of this year.


This story originally appeared on Business Insider.

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Comments

    I note they never, ever talk about the difference in ongoing cost and maintenece for fttn vs fttp. What's the difference over 10-15 years vs the pure install cost?

      Probably a difficult question to answer, copper lasts a long time and is very cheap and easy to replace or splice. But they have the additional node to take care off etc.

      But a fresh fiber run probably wont need maintenance for quite a long while but when it does break it will be more difficult to fix (as apposed to copper). But node to worry about. Also hopefully they put in good fiber to begin with which might last a few decades (I dont know whether they did or didnt)

        don't you mean, an additional -distributed- node per dwellling with FTT(K)C.

      I think its because they have no idea what it'll cost. What percentage of the copper still in play will need replacing over that time period? Thats going to be the biggest cost.

        Yep, roll-out is one cost. The ongoing cost of trying to support the decision to re-use decades-old copper to deliver modern services is going to make any roll-out saving look like very small change indeed.

      Well said. Let's also factor in what it costs small business for loss of revenue when the shonky old copper goes down or goes sloow.

        I assume any business that wants or needs it can pay for fibre to the premises themselves. I sure as hell don't see why I should be paying for it. You just have to do the maths to see how much it is saving - we're talking billions of dollars that a large chunk of the population simply doesn't need. I have no problem at all with a user pays system, it seems completely fair and equitable to me.

          It's probably a bit more complex than that though. Billions of dollars saved from one pot just masks the fact that supporting, fixing and eventually replacing it will take many, many more billions from a different pot. And the long term damage to the economy being done by implementing a cut-price poorly-performing solution can't be accurately calculated. FTTN may be cheaper to roll-out, but it suffers from such high fault rates as to be a complete joke.
          What's the point in being forced to have your phone line replaced by a service that drops out frequently? And is run by an organisation that believe 5 service drop-outs a day is acceptable? We'd not accept that from the technology it's replacing.
          FTTN removes reliable phone and internet services and replaces them with a best-efforts service that may as well have the motto "you might be able to stream a bit of a Netflix film before it drops out, take a chance!".
          You're right though, businesses that want to stump up the tens of thousands for FTTP can of course do so. Smaller businesses will just have to put up with possibly having internet access, on a good day, if it's not been raining nearby.

            Sure but who pays for that? Not the taxpayer, which is all that matters. The Government should NEVER have started this, it was nothing more than a vote--grabbing exercise from KRudd. If we can trust our telcos to provide us the latest and greatest in mobile technology, why couldn't we rely on them to do the same with internet? The most the Government should have done was provide incentives for private enterprise, a billion or two over a decade or so, and let them have at it. They'd have done it more cheaply and far more efficiently. More importantly, competition between telcos would keep prices low.

              It comes down to those incalculable benefits. Fit-for-purpose broadband is our generation's electricity-size opportunity. Without power to every address would our economy be as good as it is? Tomorrow's economy will be driven by broadband communication. Right now, we're screwing it right up.

              Because large scale infrastructure projects, such as the NBN, will never be funded by private organisations and nor should it. Australia do not want a situation where certain sections of the internet are supplied by certain corporations etc.

                but that was the beauty of keeping copper and telstra separated from private companies delivering a competing product.. that was always there to fall back on.

                As to Co's not providing, the famed Korean high speed network.. is it government owned? Prior to KRudd's fantasy thought bubble, there was a company rolling out cable broadband at *no* expense to taxpayers, they were footing the infrastructural costs as they figured they could do it as they had done elsewhere, produce a competitive price structure and faster speeds.. all using through the sewer technology. Sad thing was with KRudd stomping onto the scene it killed that project.

                Think of it like this - the gov provides piped potable water to premises in metro areas at minimal cost, subsidized by tax dollars. Some nonetheless choose to have overpriced bottled water delivered at premium rates to their door via delivery truck. two markets, one fallback, it works.

            Yeah i'd also like to add that it aint that simple to pay for your own fibre installation. Mate has nbn 4 houses either side of him, his stage was the 1st stage of development so missed out initially (about 30 homes all up) and he rang up asking to pay for it to be run 4 homes down to his house and they don't want a bar of it. Been trying for almost 2 years. How hard can it be? a paying customer ffs!

            Also worth mentioning, he was doing some retic work the other day and found out there is a green NBN cable running past his house.. just to rub it in some more haha. I told him to sever it with the shovel but he pussied out lol.

          As Phil said, this is the discussion. How much really is being saved, given it will need replacing anyway? You're looking at short term savings versus long term costs, and they dont add up too well on the FttN side.

          I have no problem either with a user pays system, as long as its fair and equitable, and the FttN setup isnt. If you want to upgrade from FttN, is $2300 to the homeowner fair? Will YOU be happy paying it when the time comes? What if that cost becomes $5000 over the next decade?

          Thats the core of the debate between FttN and FttP over the years, and whats not being answered - by the time we get to complete FttP, what will the total cost be? Whether thats hidden behind tax dollars or comes out of the wallet of the homeowner doesnt matter - we all pay for it one way or another.

          That future cost is very specifically ignored by NBN, and its becoming clearer by the week as to why.

            If $2300 is a reflection of the actual cost, as it is in this case, then yes, it is completely and utterly fair. It's a one-off cost, about the same as a trip to an interstate trade show might cost, but the benefits to your company would be significantly greater. Or for home users, about the cost of a week's holiday in Bali.

            As for whether I would be happy paying it, the answer is "no", because I don't need it. My current 4G internet easily meets all my needs. Even if the NBN does eventually show up iin my area, I won't be signing up to it at all. We'll almost certainly have 5G by then, which will be both faster and cheaper.

            The fact is we don't all have to pay for it and we should absolutely be given a choice as to how much (or how little) comes out of our individual pockets, not be told that we are paying for it whether we want it or not. And the fact that it may eventually cost the same anyway doesn't matter because by spreading the cost out over a greater period of time, we reduce the amount borrowed - the NBN is beng funded by borrowed money, $27.5billion of borrowed money, which will have to be repaid with interest - and the eventual cost of remdeial work could actually be paid for out of profits and billed to users.

              What about in 10 years? Thats the secondary part of this. In a decade, our needs will outstrip what FttN can provide, so what happens then? Mobile broadband isnt the answer, no matter what you think. 4G, 5G, 8G, 10G isnt going to solve the issue that internet needs double every 2 years.

              When the time comes that 100 Mbps isnt enough (newsflash: within a decade) then what? You think mobile broadband will keep on delivering? Do you even know how little data is transmitted via mobile broadband? Hint: less than 5% of an ever increasing dataflow.

              This isnt about today. Its about 10 years from now. And 20, then 30. Fixed line needs to be there, everything else relies on it, and if you think a couple of thousand is an acceptable cost for whats public infrastructure, well I guess you dont have a mortgage.

                if you think a couple of thousand is an acceptable cost for whats public infrastructure, well I guess you dont have a mortgage.

                Every other public service has an installation cost. Why should NBN be any different? $2300 to connect an average house worth half a million (a million in sydney) is peanuts.

                  Actually, never mind. I have FttP, I dont need to care. When the time comes, if you're a home owner, I hope you can afford it. If you're a renter... well good luck convincing your landlord to pay for it.

                  Last edited 14/02/17 12:37 pm

              Pinning down actual fibre upgrade costs is hard - I've seen a few quotes reported around $6-9k, lowest was $3-5k and highest was $15-17k. Only hard figure I found was this question asked of nbnco in Parliament, which reported $38,724 revenue earned from 3 premises upgraded, i.e. an average of $12,908 per premises.

              In any case, it's clear that $2300 is wishful thinking.

          And I sure as hell shouldn't be paying for your roads to be repaved (or your sewer, water, stormwater, or electricity to be maintained) as I guess you use only little bit of the road twice a day if that!

            Poor analogy because I won't EVER use the NBN but it still comes out of my taxes. OTOH, even if you don't drive, you benefit massively from road infrastructure, from garbage collection through to walking on footpaths and public transport. Your other examples, of water, sewerage, etc. are all excelelnt examples of businesses governments are very keen to hand over to private enterprise, if they have not already been sold. in fact, the NSW Government recently reaped almost $50billion just by selling the electricity wires, which they are busy ploughing back in to works that will benefit Sydney and the State, without having to borrow a penny. It is how governemnts do business in the 21st Century.

            I am completely, 100% happy with my current 4G internet. It easily meets my needs and probably exceeds them most of the time. And I'll probably be on 5G before the NBN reaches my area anyway (the curse of living in a safe electorate), which will very likely be both faster and cheaper. The NBN is a white elephant in the making, a total waste of your money and mine.

            Last edited 13/02/17 1:29 pm

              You really think that your internet usage will never use the NBN? That none of the mobile towers or ISPs that you connect to will ever touch NBN fibre, that none of the websites you visit will ever use an NBN connection, that none of the online communication you do will ever be with someone connected via the NBN? None of the real-world interactions you have with people or businesses will ever have been made possible by the NBN?

              You agree that non-drivers still benefit from roads, but you don't think that applies to the internet?

              You make the basic mistake of believing a government should be run like a business.

              You also mistakenly believe that in a nation only your present, specific needs should be fulfilled.

          That's a perfect response in an ideal world, where copper doesn't degrade, pits don't flood and Telstra has maintained their copper-based infrastructure to the highest standards.

          Reality is not an ideal world.

          I could buy a new car now with warranty for say, $20k. Or I could go out and buy a used one for say, $3500. By your standards I have saved $16,500, but you aren't looking at the bigger picture.

          In reality, NBN have bought a $15,000 car with a bad transmission and a history of reckless owners instead of paying $20,000 for a new car with all-new parts and a warranty. It runs to a point, but the lifetime of the product is hampered by the use of old, used technologies. You can't simply make a cost/benefit analysis based solely on initial outlay. It's short-sighted, and not a very responsible way of creating a network of infrastructure.

          There are a few problems with that position. First is the assumption that most of the public won't need fibre any time soon, when simple extrapolation of the 30-year bandwidth growth rate of 45% shows that our current average usage of 8.2 Mbps will grow to 160 Mbps by 2025 - well beyond the freshly-completed FttN network's capabilities (peak usage will grow from 39.6 to 773 Mbps). By 2030 we'll need gigabit, just for average users.

          Second is lack of scale. Installing fibre for individual clients costs $15-20 thousand each - but a mass rollout costs a fraction of that. If we'll have to upgrade our network anyway, doing it piecemeal is the most expensive and least efficient way possible.

          Third is ignoring all the secondary benefits that come with any national infrastructure project. In other countries we see startups migrating to cities that are rolling out gigabit fibre, so that's jobs & innovation we wouldn't get. Telecommuting lowers traffic problems. Regional & rural networks mean people don't have to move to the city to get jobs, further reducing pressure on city roads, housing, services etc. The phone, electricity, and road networks all enabled vast economic activity far beyond their costs - do you think a national data network would not do the same?

          My tax dollars pay for stuff you use as well. I sure as hell dont see why i should be paying for it. You should pay for it. Why should my tax dollars fund your medicare?

          You support a user pays system right? Lets go with that then. Lets replace our healthcare and hospital system with your user pays system. Much like what exists right now in the USA. And the USA sure does have an excellent hospital/Healthcare system...... right....?

          Last edited 13/02/17 6:46 pm

          No they reserve the right to refuse a FTTP install and so far it looks like the intend to refuse them in a wholesale scale.

        I don't think that has a whole lot to do with the copper, more the speed of their switches at the exchange.. What happens with old leaky opticfibre??

        The speed of a signal in copper is still 95% of light in a vacuum. Don't forget that an optical fibre booster/switch/relay/mux still relies on the switching speed of doped silicon (they don't have a new class of "optical processors" etc to use, the same as with copper.. newer tech using lower voltages, smaller semiconductors, faster processors etc. is just faster.

        Would love a completely light powered logic device. That would withstand any emp.

      I think its because they are still planning on selling it.
      In their mind whoever buys this mess will have to bear the costs.

      There are a Lot of engineering, economic and logic plusses to upgrading the core of the network and leaving the periphery (which costs the most $ (by a long shot) per return on investment) for the Next Big Thing. I bet the majority of people who think this is not good enough would never foot the bill if it were charged individually pro rata for their increased speed.

      My guess is that in even less than 15 years the Liberal government if it exists then will be saying nahneenah...

        I bet the majority of people who think this is not good enough would never foot the bill if it were charged individually pro rata for their increased speed.I would agree. But a significant number of people being moved forcibly from ADSL to FTTN get a reduction in speed and reliability.
        Sorting all the backhaul should of course be a priority. But being able to reliably access the service should be a higher priority - I know many people who would be happy with 25% of the FTTN speed they get if only it wouldn't go down multiple times per day.

        Last edited 13/02/17 11:06 am

          "But a significant number of people being moved forcibly from ADSL to FTTN get a reduction in speed and reliability"

          Would need to have hard data to believe that.

          Personal anecdote: At least 63% faster download on FTTN than ADSL2. And My ADSL was faster than most non CBD dwellers.

          Yes Upload is variable, 2-8Mbps, but that sure beats 700kbps

      Ongoing maintenance of fibre is near zero. Provided it's properly installed.

    Is it the taxpayers responsibility to pick up the tab for FTTH to all sites? Let's not forget that if you get FTTN, you can pay for a upgrade to FTTP at your own cost. Individuals can make their own decision on whether they think its worth it.

    After all, there are a lot of people paying for RON 95/98 petrol when their vehicles would work perfectly well on RON 91 or e10 because they believe there is value in the extra cost.

      Now we are off topic, but there is a good reason why Victoria refuses to sell E10. As it is harmful to all Petrol engines, unless they are specifically designed for FLEX FUEL like many vehicles in the US. But, sure go right ahead and keep saving 5c per Litre until your engine dies.

      Taking your petrol analogy, are FTTN subscribers paying less each month for their inferior product?

      Last edited 13/02/17 12:41 pm

        only for inferior ADSL, as in: "not top shelf".

    "NBN connecting your house" bahahaha, thats a good one!

    As NBNCo now seem to run some political defense plays on behalf of the government, it may be interesting to put any apparently inflated claims on relative costs to some genuinely independent verification.

    Last edited 13/02/17 6:50 pm

    Something I learned from someone working on the cable side of the nbn, the optus cable network was at its end of life when they bought it, they were/are replacing 400 repeaters per day every day. Also the nbn cable network could go faster than the ftth has been designed to if they decided to drop a load of money on it.

      Have there been any reports as to whether or not they looked at the state of the Optus HFC network before they purchased it?

        Yeah they looked at it, but neither Telstra or Optus had any idea what condition their networks were in, neither really knew what they had either. The amount of work that is going into just finding out what NBNco has bought and if its any good is staggering. Literally every single piece of equipment in Australia is being checked, and documented. I mean everything... someone is getting up a ladder and checking every repeater up every pole and its going into a massive file which records its location and condition. NBNco now knows more about the Telstra network than Telstra do themselves.

        gizmodo should go find the guy who's overseeing the cable roll out and interview him about it, the bloke also did the satellite launch. super smart and nice guy with heaps of information... probably under piles of NDA's though :p

    Back in 2006 the census included a question on internet access. There were only 10 local government areas where broadband take up was greater than 50%. You can argue (1) that these areas were the ones with the services ie private companies had determined these areas were the most profitable or (2) these areas were where residents were willing to pay more for the service. Either case amount to pretty much the same thing and is probably a good indicator of high take up of NBN services.

    With a 3rd of the NBN rolled out, how many of these 10 high usage/high return local government areas residents have received the NBN rollout? I suspect it is very few.
    62.1% Ku-ring-gai
    58.0% Baulkham Hills
    55.2% Willoughby
    54.0% Hornsby
    52.3% Lane Cove
    52.1% Nillumbik
    51.6% Nedlands
    51.3% Hunter's Hill
    51.1% Mosman
    50.5% Boroondara

      It sounds like you are referring to a either an actual properly and proportionately represented democracy or a well organised business & engineering model or all three.

      Not in Australia, sometimes one at a time but not all 3, never, not on your life mate!

      That census data that our two party preferred system loves to ignore cost us all $1/2Bn+ BTW.

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