$120m too much for $65m spectrum: Libs

$120m too much for $65m spectrum: Libs

Summary: The National Broadband Network Company (NBN Co) is paying twice the price for spectrum that the government rejected when it cancelled the OPEL network, according to the Opposition.

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TOPICS: NBN, Broadband, Telcos
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The National Broadband Network Company (NBN Co) is paying twice the price for spectrum that the government rejected when it cancelled the OPEL network, according to the Opposition.

NBN Co announced this morning that it had secured Austar's 2.3GHz and 3.4GHz spectrum in a deal worth $120 million. The company said it plans to use the spectrum for high-speed wireless services in regional and remote areas of Australia that will not be covered by fibre to the home.

However, time has inflated the price of the spectrum, according to Shadow Regional Communications Minister Luke Hartsuyker.

"The OPEL consortium paid $65 million to Austar but handed it back when the newly elected Rudd government reneged on the contract in early 2008. The improved wireless service would be operational now if Senator Conroy had not blindly ignored the merits of OPEL," he said.

Shadow Communications Minister Malcolm Turnbull echoed Hartsuyker's statements saying that had the government not cancelled the OPEL contracts in 2008, this wireless network would be up and running delivering 12 megabits per second (Mbps) speeds to rural Australians.

"Instead, 37 months have passed during which Labor has announced a series of ever-more grandiose plans for a National Broadband Network, with the cost to the taxpayer blowing out from $4.7 billion to more than $50 billion," Turnbull said in a statement.

Turnbull argued that the purchase indicated that NBN Co was entering the already competitive wireless market.

"But even though there is significant existing infrastructure and competition in the wireless market, [Communications Minister Stephen] Conroy has instead decided to incorporate it into his monolithic government-owned monopoly," he added. "Senator Conroy's arrogance will result in a less efficient market, huge costs to the taxpayer and ultimately, higher prices to consumers."

Hartsuyker went further in his questioning of the spectrum deal.

"NBN Co is paying $120 million for spectrum which Austar currently has on its books as having zero value," he said.

Conroy today addressed the Setting the Agenda for Regional Futures Summit at the University of New England in Armidale where he highlighted an 87 per cent opt-in rate for the NBN in the area and praised the impending roll-out of fixed wireless and satellite services as part of the NBN.

"These new technologies are an exciting development for people and businesses in rural and regional Australia, delivering peak speeds of at least 12 megabits per second," he said. "For users of both the fixed wireless and satellite systems, this will mark a dramatic improvement in broadband services."

Topics: NBN, Broadband, Telcos

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Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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15 comments
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  • These Liberal party clowns just cant seem to make up their minds can they.
    Hubert Cumberdale
  • "the cost to the taxpayer blowing out from $4.7 billion to more than $50 billion," Turnbull said in a statement.

    Ummm. Unless I'm very much mistaken, the "cost to the taxpayer" of the NBN is $27.5billion, and the total capex of the NBN is $36bn. Turnbull's maths seems to have been Abbottised.
    HazTechDad
    • I think what Mr Turnbull is saying is that the cost of a broadband network has increased from $4.7B (the Opel scheme) to its present estimated cost.
      Blank Look
      • "the cost to the taxpayer blowing out from $4.7 billion to more than $50 billion"

        He explicitly says "cost to the taxpayer". The cost to the tax payer is $27.5 billion, not "more than $50 billion". When the Libs are just pulling numbers out of thin air to suit their rhetoric, why do people take them seriously?
        Dean Harding
        • I think both labour & the liberals are good at plucking figures from the air, however if we consider the track record of this government in just over 3 years, Education revolution, green loans, the batt thing, I am inclined to think the Labour government is not able to produce reliable figures.
          Blank Look
          • The $4.7 billion NBN Mark I of 2007, like the $6 billion OPEL scheme of 2004-6, turned out to be incapable of delivering universal service. Either would have cost at least $20 billion on the information made public much later. NBN Mark II comprises two satellites, fibre to 93% and wireless to 4%, plus a lot of backhaul. When you buy more it costs more, but only slightly more than the total cost of either OPEL or NBN Mark I.

            Malcolm Turnbull blogged live on The Australian a week before Christmas 2010 and disagreed with a poster who referred to $50 billion as the cost. He said that after the agreement with Telstra the cost was now $36 billion, of which $27 billion would be publicly funded. Now he calls it $50 billion. When did it double?

            It is also worth remembering that the $27 billion does not come from other budget programs, but is borrowed for the NBN construction and to be repaid by NBNCo from wholesale revenue. I don't believe the originally-suggested but later widely opposed sale of the fibre will be necessary to recoup the cost, because the takeup and growth forecasts are unjustifiably conservative when you look at the historical growth trends, especially data growth. Data volume is what kills wireless. NBN wireless will work, because it only has to deal with light traffic since all but 7% of premises will have fibre.
            umbria
          • Visionary, I agree with you that figures produced by Wayne Swan do not inspire confidence as a rule. We are fortunate that these figures were produced by Mike Quigley.
            umbria
          • Of course the most important and often forgotten aspect is the need to get reliable high speed broadband out to those work in regional and country areas at a reasonable price.
            Blank Look
  • Umbria, - you said 'all but 7% premises will have fibre'.
    Nope. Read the press, or industry input or the wealth of information and advice on this.
    The expectation is that 30% + homes (and thats just homes) will be wireless ONLY in 3 years. Perhaps even 50% as the shift can be dramatic due to the ease of that being an alternative now. The active use/takeup of the NBN where passed in fixed is 3-8% max.
    So lets say 70% in 5 years have a fixed connection and its best case 30% takeup, which is very optimistic best case - that is only 20% - Twenty % best case that would be a usage base for the NBN.
    And that will be marginal, lower socio economic, expensive non urban or suburban sprawl most likely as competing alternatives cherry pick out the cities and business community.
    So the best case for NBN takeup is worst than marginal and totally uneconomic.
    And the worst demographic in cost to provide and service or gain premium income from.
    Unless the NBN is forced by law, exclusive, and all other alternatives removed, - then the entire NBN plan, design and business case is dead. Non Labor will control all the mainland states and has moved to stop the NBN from being forced.
    So the NBN has become political suicide for Labor if they do, or if they dont.
    The NBN has been a dead duck from day 1 on 2 things.
    As many people have said for nearly 2 years now, the plan and design is wrong.
    Conroy and Quigley have cost this country billions in misadventure and lost opportunity cost. They both have failed to gain consensus or provide the required social, community or business design and outcomes we need.
    The only political alternative for Labor is to find an excuse to stop the NBN, get a proper minister, board, manager and have a new plan, new direction - and regain Australia's trust and confidence.
    NBN failure from the gun
    • "The expectation is that 30% + homes (and thats just homes) will be wireless ONLY in 3 years. Perhaps even 50% as the shift can be dramatic due to the ease of that being an alternative now. "

      As a wireless only user (No other option for me, no adsl, no cable) i dread the day when this occurs. if in three years the demand is that high, i wont be able to load this webpage in the middle of the day. as it stands i cant between the hours of 6pm and 10pm due to the large number of users.
      wireless user
    • You have to be kidding me...

      a) Everyone I know has a fixed line connection or wants one. I don't know anyone in Gen Y who would prefer a wireless only connection.

      b) Those figures are exaggerated by those with a vested interest in seeing the NBN die. I challenge you to find a news story outside of the Murdoch press reporting those figures for wireless takeup.

      Last time I checked the statistics, the number of fixed line connections was increasing. Sure 30% of people might have a wireless connection on their phone in 3 years, but they'll mostly rely on a fixed line connection at home. Hell, even my parents go over their 5GB monthly wireless limit (they're forced to have wireless as they have no fixed line ADSL option. They will be getting the NBN fibre though, and they're looking forward to it).

      You also forget that if it is successful, we'll make the capital expenditure back, which can then be reinvested in other infrastructure. If it isn't successful, we still end up with a world class comunications network, which can be sold and used as the backbone to this magical wireless network you seem to think will be invented in the next 3 years (how it's going to handle the 3,000 people to a tower I don't know...)

      Finally, in case you didn't know, the coalition wireless plan would be fixed wireless anyway. This means no smartphones, no moving around. Effectively you have a fixed line connection travelling through an inefficient medium (the air). This wastes more power, is slower, has higher latencies, has bigger security problems...why is that better again?

      But you know, keep spouting off the rubbish...62% of Australians think the NBN is important or very important, and that number will only grow.
      three_pineapples
      • " Everyone I know has a fixed line connection or wants one. I don't know anyone in Gen Y who would prefer a wireless only connection."
        And you happen to know everyone in Australia? You must be one popular guy. Heck while I am at it, I know plenty of people that are on wireless only

        "Those figures are exaggerated by those with a vested interest in seeing the NBN die. I challenge you to find a news story outside of the Murdoch press reporting those figures for wireless takeup."
        Eh, no they are not, they come from independent organizations
        deteego
  • hi Wireless User : on the NBN your ID, IP, proximity will be traced, checked matched.
    Every data or voice packet on the NBN will be captured, inspected, then blocked, altered or allowed to pass and then stored for further analysis. Nothing can pass on the NBN that cant be captured, traced and inspected and stored. So you certainly wont be using the NBN either to read, talk or comment on anything except what is allowable. Re the NBN intent, the new telecommunications acts or even the ISP NBN agreements.
    You will be purchasing NG wireless or other options that are easily available for most or rapidly emerging , or you will value FOI and your freedoms much more than a web page load speed. :)
    30% WIRELESS ONLY btw is the mid range prediction, given the conversion to wireless only for most 50% is a quite likely a scenario. Other countries are already at that level.
    The NBN guys know they have it all wrong ,but are constrained by Conroy and the political design of the NBN (fixed point stasi capture & info control) overruling commonsense.
    NBN failure from the gun
    • If you think the government won't be able to monitor and filter competing wireless networks, you are delusional.

      Any law that is passed will apply to every publicly available network in the country.

      Please try and look beyond your own short-sightedness. It's rather disappointing to see people so worked up over their political allegiances that they can't see past the end of their own rhetoric.
      three_pineapples
      • "If you think the government won't be able to monitor and filter competing wireless networks, you are delusional."
        They can sure as hell try, but it will degrade the wireless networks performance into oblivion compared to fixed line
        deteego