NBN In 2018: A Litany Of ‘Lies’ And Broken Promises

NBN In 2018: A Litany Of ‘Lies’ And Broken Promises
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With 2018 shaping up as an election year – we could go to the polls as early as 4 August 2018 if the government calls it – a number of key battleground issues are forming. One of those is the National Broadband Network. Both governments have policies around the NBN with the electorate finally realising it’s a significant project that is important to everyone.

So what have been some of the biggest NBN promises that were ultimately broken? Um, this might take a while…

FttP for (nearly) everyone

The original NBN plan, proposed by Labor in April 2009 proposed Fibre to the Premises (FttP) would reach about 90% of premises with download speeds of 100Mbps.

But once the Abbott/Turnbull government arrived, things changed. FttP became a less popular option, replaced by a combination of satellite, wireless, copper and HFC.

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As we come to the election. Labor is promising 39% of homes will get FttP. That’s about two million more homes that the current plan under the Liberal and National Coalition but still a long way from the original promise.

The beauty of the fibre option is that you can purchase plans with multiple RSPs and aggregate the bandwidth as some commenters noted in a recent story we published.

Along with that technology change, we’ve had to swallow a big performance hit.

Speed Bumps

The Coalition’s plan promises connection speeds of between 25Mbps and 100Mbps”

Given we are no longer talking about a predominantly fibre-based network, the hope of almost everyone getting access to a 100Mbps network looks a little shaky. But the good news is NBNCo has done some work to try and bring the fastest possible speeds to more people. And while RSPs (Retail Service Providers) are offering 12Mbps plans, uptake of faster plans is on the rise. That’s come about as a result of RSPs being forced to buy enough CVC (Connectivity Virtual Circuit) to adequately service customers and decreased wholesale rates.

So, while the promise of fibre won’t be honoured by either party, there’s a good chance we’ll have decent speeds – at least for now.

At some point, the remaining copper and HFC being used by NBN Co will need to replaced.

Show Us The Money

The one number that seems to be hardest to actually pin down is what the NBN will cost to build. Part the challenge of coming up with a definitive number is that construction methods have changed. For example, when the NBN was initially proposed, the connection cost per premises was estimated at $3700. But changed techniques, such as those used in New Zealand, trim close to $1000 from that cost.

If Labor wins the election later this year, we can expect the HFC network to be eventually phased out, assuming they stay in power long enough, which will cost about $19.9b or a little under $1700 per premises when averaged out across the entire network.

What’s clear is that no-one really knew what the network would exactly cost when the project started five years ago. The Coalition said Labor’s plan would somewhere between $74b and $94b depending on who you asked and when you asked them. Labor maintained the network would cost less, more like $43b when they first proposed it back in 2008.

When the Coalition came into government, a review said the NBN would cost about $41b to build. Under the government’s multi-technology mix. NBN Co now says $49b is expected.

Rollout Dates

Under the more supposedly more expensive and longer-running Labor program, those $43b dollars should have been spent by now and most of us would all have a FttP connection. But the timeline has stretched under the less expensive and faster Coalition project we were promised.

NBN Co’s most recent corporate plan says that the project will be completed in 2020 with about three-queartes of the country connected now.

The most recent weekly connection report says 6,855,842 premises are ready to connect. that means the physical installation is complete. All that remains is for customers to choose an RSP and flick from their current service to the new one.

Of those 6.8m premises that are ready, a little over 4m have taken that step.

So, the initial promise that it would be all done this year is fading into history with 2020 the next target date.

Have We Been Lied To?

The problem with answering that question is that the goalposts have shifted many times. There was a near-maniacal adherence to the “fibre is bad” mantra from some politicians and the media. But there was a similar fanaticism for fibre.

Ultimately, the decision to go for the multi-technology mix was made through a federal election where the previous government’s biggest problem wasn’t so much about policy but internal fracturing which resulted in distrust in Labor’s ability to govern. And when they were pushed from office, their NBN policy went with them.

At that time, both major parties had a policy and the were committed to that policy. So, while the goalposts moved, we knew it was coming.

The question of costs is challenging. It looks like the cost of the coalition policy is pretty close to the cost of the Labor policy. Whatever cost savings we expected from moving to the multi-technology mix seem to have been lost. Labor’s projected cost was $43b while the current plan is $49b. The kind of difference is relatively small given the scope of the project.

A far as speeds go, despite some substantial hiccups along the way, it looks like a substantial portion of the population will have access to 100Mbps connections.

So, it’s hard to say we’ve been lied to. But what we have seen is a number of politically motivated changes in the project’s scope that have resulted in confusion.

Under the original Labor proposal, things were simple. Most of the population had the same connection type – FttP – and we could have reliable access to 100Mbps.

Under the coalition policy things aren’t as straightforward. There are multiple connection types, each with its own benefits and challenges. The complexity of managing different connection types has made support more challenging and we’ve seen the HFC program delayed because of problems with the infrastructure. But the coalition made it clear at the last election that this was their policy.

We’ve likely had some “creative accounting” released when each party has provided costings on their own and their competition’s solutions. So we’ll never know whose numbers are right because the project has changed tack several times.

I don’t think we’ve been lied to. But I do think finding the truth has been made extraordinarily difficult.