NBN Says Comparisons With NZ's Ultra-Fast Broadband Are 'Apples and Oranges'

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The latest blog post from NBN outlines a number of reasons why comparing the broadband rollouts of Australia and New Zealand is like comparing apples and oranges. To make his point, NBN CEO Bill Morrow finds an orange.

Comparisons between Australia and New Zealand are natural -- both countries think they invented the pavlova and neither wants to claim ownership of Russell Crowe. In this morning's post, Morrow tries to explain why we didn't do things the way the Kiwis did.

Morrow focuses on NZ telecommunications infrastructure provider Chorus, who won a tender from Crown Infrastructure Partners (NZ's loose equivalent to NBNco) for 70 per cent of New Zealand's FTTP rollout.

When the NBN was first formed in 2009, the Rudd government threatened to split Telstra into separate companies handling the retail and wholesale aspects of the business.

Chorus is the result of the New Zealand government following through on a similar threat with Telecom New Zealand -- now Spark -- and then requiring the infrastructure part of the business to become wholly separate as a requirement for winning the Ultra-Fast Broadband tender.

The biggest difference here is that our monopoly telco was unwilling to play nice with our government while New Zealand's was, albeit with some legislative nudging. As a result, NBN has had to negotiate with Telstra for access to the existing infrastructure, and pays almost $1000 to Telstra in leasing or acquisition costs for every connection in a built-up area.

Morrow mentions labour costs and the different starting technologies there were to work with as explanation for the difference in cost. He mentions one of the reasons Chorus has been able to reduce its costs:

"Much has been made about Chorus reducing [its] FTTP delivery costs over the last few years but the reality of the matter is that a major reason [its] FTTP costs have come down – and this is something Chorus have already made public – is that they were compelled to start [its] FTTP rollouts in more expensive areas and then moved the build to many cheaper areas later on."

The NBN rollout also started in more expensive areas as a political ploy to try show that something was being done for regional Australia.

Finally, Morrow brings up the reason we all knew was coming: distance.

"The final difference between our goals is simply one of scale -- Australia is a massive country and is roughly 30 times the size of New Zealand.

"Moreover, we have to deliver a fixed-broadband model to 93 per cent of premises in this huge country – in New Zealand the UFB-1 model only calls for FTTP to be deployed to around 75 per cent of the country – that is an absolutely massive difference right there. UFB-1 is only delivered to areas within 50km from an urban area."

Australia is a big country but we're deceptively centralised. Approximately two-thirds of Australians live within 50km of a capital city and almost 85 per cent live within 50km of a coast. Distance is still a challenge.




    The Department of Prime Minister and Cabinet
    1 National Circuit
    Barton ACT 2600

    18 October 2017

    RE: Ultra Fast Broadband in New Zealand Comparisons with NBN Co. rollout

    Dear Bill,

    As you are aware, the Australian government is absolutely committed to the provision of fast, reliable home broadband services to ensure that Australia is competitive in the 21st century.

    This office has noticed that NBN Co. has become some what of a political football, with the media focusing purely on the extended delays, cost blow outs and number of homes unable to connect to any internet or home phone services. The media is also capitalising on the fact that New Zealand appears to have completed a similar project for a fraction of the cost in a fraction of the time.

    May I suggest a blog post to dispel this myth that the roll outs in Australia and New Zealand are similar? Please focus on the fact that New Zealand is a much smaller size than Australia. Please avoid discussing the fact that they have a FTTP model - something that we both agree the average Australia does not need, nor will they until at least 2050.

    As you are aware, the media continually focuses on the FTTN model that we have chosen - if there is anyway that you can deflect this decision away from us and highlight decisions made under the Rudd government, that could be a political lifesaver in the next election cycle.

    Yours sincerely

    Malcolm Turnbull

    Prime Minister of Australia

      The real difference is political will and corporate sanity plus the fact we booted most of the unions out of NZ. Nz may be a 30th of the size of Australia but our population is more diversely spread and the terrain often mountainous. The "more exspenive" bits as you called them are about 87% of the fibre roll out. We are enjoying unlimited gigabit fibre... Hope you Aussies like your copper. You've been had

        Funny thing about making statements on the internet without think beforehand, they are easy to prove wrong. The OECD collects info about unionisation rates in countries, and when you compare Australia to New Zealand, surprise, New Zealand has a high rate of unionisation. 2014: Aus = 15.5% NZ = 18.7%, 2013 Aus = 17% NZ = 19.8%, 2012 Aus = 18.2% NZ = 20.9% 2011 Aus = 18.5% NZ = 21.1% and so on, so forth.

        Could you please explain how NZ simultaneously "booted most of the unions out of NZ" while having a higher rate of unionisation than Australia, and for that matter a higher rate than the OECD average? Or did you perhaps just make this up to suit your own political feelings?

    it's about the population density, not size of country, and the government wouldn't have to pay telstra if they didn't need to buy up the existing copper network

      We didn't ask to sell it, they asked to buy it. Strongarmed, really. They ten realised they couldn't perform maintenance and approached us yet again. They then realised they didn't know what a Pair Gain was and approached us again. They then realised their techs weren't very good, and approached us again.

      Last edited 20/10/17 10:26 am

      You're quite right, trunk line fibre optic cable, long distance is cheap, then the population density is comparatively high, capital cities, regional cities, for 93% of the population.

    At least their oranges are ready to eat while Australia is still planting apple seeds.

      Actually it's more like Australia is still planting choko seeds - a useless fruit that nobody really wants.

        tastes great in Mcdonald's apple pies though!

      New Zealand has an orange juice manufacturing monopoly.
      Australia has a bunch of hobby farmers planting apple seeds a few seasons too late and bitching about the size of their farm is too big.

      The thing I never understood is why Australia didn't make the NBN Co. a monopoly... who the HELL gives up the right to own a monopoly. Our government, continually.

        But but but muh wisdom of the free market! The invisible hand needs love, too.

    ...we have to deliver a fixed-broadband model to 93 per cent of premises in this huge country – in New Zealand the UFB-1 model only calls for FTTP to be deployed to around 75 per cent of the country...

    Nicely worded. What percentage of Australian premises will receive FTTP? I'm willing to bet it ain't 75%.

    Apples and oranges my arse.

    Last edited 20/10/17 9:18 am

      Absolutely correct. And even WELL before NZ's fibre rollout, VDSL was available in many places. That's essentially FTTN, which they don't even count in their 75 percent at all.

        Glad someone else has brought this up. I was at my mate's house a couple years ago on his VDSL connection pissing all over speeds our NBN is promised to supply, theoritcally. And his location South island, outside of Queenstown, not exactly near any big city.
        Price was damn good too. For the VDSL plan, not the property.

          So is this super fast VDSL delivered over copper?

      Yeah but here in NZ we are now rolling out FTTP to 87% of the population not 75%. New extention to be completed by 2022. The rest get fast broadband via fixed wireless lte, vdsl2 and local wireless solutions.

      Another thing Morrow mentioned in the blog was that Australia is building an FTTN network while NZ already has one and is upgrading to FTTP.

      He did his best to make sure he had an apple and NZ had an orange. A lot of the comparisons don't stack up and that's clearly deliberate.

    When the NBN was first formed in 2009, the Rudd government threatened to split Telstra into separate companies handling the retail and wholesale aspects of the business.

    We're not separate companies, but this did occur. Retail and wholesale are entirely separated (unless you work in a faults team basically).

    The biggest difference here is that our monopoly telco was unwilling to play nice with our government while New Zealand's was, albeit with some legislative nudging.

    Assuming you're speaking of Telstra, this did not happen. Also it's not a monopoly. You can't be blamed for providing 99% of the nation when other providers (excepting Optus and TPG) don't think you're profitable.

    Last edited 20/10/17 10:24 am

    Yup, apples and oranges...
    Theirs works and ours doesn't.
    There's your apples and oranges.

    Roll out fibre to country towns? I thought they gave up on that idea and gave them satellite instead.

    telstra is not 'ours'. It is privately owned not publically owned.

    Sounds like the key difference is scale. So, apples, and slightly larger apples. If only NBNco was as good as rolling out internet as they are at rolling out excuses.

    Oh, I forgot, they have a much better government even with a right wing gov in power

    The copper phone line network was built using using taxes when Telstra (originally Telecom) was a wholly Govt utility. Something that if Telstra was a private company at the time would never have been able to afford to do. This is proven by the fact that now a fibre optic network also has to be tax funded. So how in the hell when Telstra was privatised was it allowed to have ownership & monopoly of a phone line network it never spent a cent of it's own funds to create. It's why ADSL is more expensive than most countries because Telstra was an inserted middleman. Now it's even more stupid as the Govt is having buy back the very network it paid to construct... W..T..F

      Telstra owns the copper network because the Howard government sold it as an asset bundled with Telstra's retail operation. You could argue that it was undervalued, but the people who bought shares in the IPO paid the asking price for the network.

      I agree that it was stupid to sell Telstra as a single entity, but that's what happened. To compound matters, since the government heavily marketed the IPO to regular people, it is almost political suicide to introduce regulations that will lower Telstra's share price. That's a big part of why Telstra has been in as good a negotiating position as it is.

    Australia: awesome country, shit broadband.
    New Zealand: shit country, awesome broadband.
    You choose.

      How is New Zealand a “shit country”, as you so eloquently put it?

      I’m assuming you lived there for many years, correct?

        NZ turning out pretty good so far for me. Good job, good climate, house was cheap, internet great, job less stressful than in AU and an awesome mountain I can see from my house. Shit has come up pretty Milhouse.

        Yep, used to work for a Kiwi company for 3 years before coming to my senses. Management culture locked into an era circa 1955 based on micromanagment, command and control and punishment for trying anything new that didn't work.

          So, one company equals your entire experience of the country?


    It's not so much Oranges and Apples, but Oranges and Crabapples. The Kiwis get delicious juice and we are left with a bitter taste in our mouths.

    I agree with Morrow about one thing though, the comparison with NZ is not very useful. I am more concerned with the comparison between the original NBN plan, which was visionary, and the Dog's Dinner with a topping of Bullshit that they are trying to feed the Australian people now. We could have had a world-class network for the next 50-100 years and instead, we will spend the next few decades fixing and patching this awful mess. From the bungled privatization of Telstra to the bungled setup of the NBN and the total misunderstanding of the technicalities of 21st-century telecommunications, we have a lot to thank the LNP for NOT.

    NBN co really make it difficult to defend their decisions (because they are pretty much objectively bad). The roll out in the ACT is a good example, as a large proportion of the Territory was already serviced by a VDSL/FTTN and FTTP in some locations by the relatively new TransACT network. Along comes the NBN and TransACT is all, 'do you want to buy our network infrastructure, considering we've basically done most of what you plan to do anyway?' NBN co: 'No thanks. And also, when we do roll out our network, we're not going to give any consideration to starting in areas that do not already have access to VDSL2. Because the people already serviced by VDSL2 will want to switch to our more expensive network that uses virtually identical technology, and has comparable speeds. Because, you know, since TPG bought iiNet, the customer service is terrible.'

    I can make do with the speed of it now, for about 3 years maybe... but then its gonna need to increase

    As a person involved in building Fiber Optic Networks in Canada – I’d say both NZ and AUS got it wrong. Aus and NZ are both using government funding vs the frozen tundra private investor money model! Yep – hundreds of rural communities, millions & millions of homes – all connected at no cost to the tax payer in a very short time. The difference – real competition!!! Not trying to be a homer and say Canada got it right, but OMG – it seems blatantly obvious that a for profit company and in a highly completive environment is going to be more efficient than a government operation. Both NZ and Aus need a telecom poker up the butt to create true competition. Wake up call required, especially for Australia as it slips into 3rd world telecommunication status. Shame for such a brilliant nation like Aus to get it Sooo wrong!!!

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