Group buying could extend NBN fibre footprint

The AU$150,000 quotation from NBN Co to run fibre to an SA man's home may seem extravagant, but it's a great benchmark for satellite and wireless-targeted communities that could use group-buying strategies to broker an acceptable price.

To the anguished gentleman who informed Whirlpool that NBN Co quoted him AU$150,000 to extend its National Broadband Network (NBN) fibre footprint down the 1.3km of road to his house: give me a pickaxe and about two weeks, and I'll do it for AU$75,000.

But I jest: I have neither the tools nor the skills to do the fibre joining, so I'll have to outsource that part. Which might cost a bit more.

What's that, you say? Oh, yes, of course we'll look after you if you're paying cash.

My obvious first reaction to this piece of news (first spotted by iTnews) was to assume that this AU$150,000 figure will become yet another deceptive throwaway line in the Coalition's anti-NBN arsenal; stay tuned to see whether that prediction comes true.

Could the community-driven Google Fiber effort be replicated in Australia to extend the NBN fibre footprint?
(Downtown from Top of Liberty2 image by Hngrange, CC BY-SA 3.0)

However, if you think past the number itself, it's actually a useful piece of information — and an important call to action that could affect the way that the NBN is rolled out in the future.

Firstly, it's a good benchmark by which to judge the previously hidden costs of rolling out extra fibre. This figure has been far from obvious in the past, and will be of great interest to those councils that are interested in joining the NBN fibre roll-out, even though they have been earmarked for satellite services.

Second, it shows exactly why private-sector operators simply aren't interested in rolling out competitive infrastructure, especially in sparsely populated areas: it's just too expensive to be worthwhile. Telstra's USO obligations have forced it to roll out copper where no other company could justify it, but there is no such impetus for private-sector fibre; as we've seen in South Brisbane , Telstra's enduring monopoly position in last-mile access has given it the unrivalled ability to pick and choose where it decides to put fibre.

Thirdly, and perhaps most interestingly, is that AU$150,000, while high, could be effectively met through concerted community action. Although it is obviously ridiculous for a single homeowner, would it be so ridiculous if a community of 150 homes all signed on to split the cost of the roll-out?

The total cost would presumably be higher if multiple houses were connected, but GPON is designed to cater for many houses on a street, so the incremental cost of each house would be far lower than the first. I suspect that homeowners could, with the right negotiating tactics and a measure of NBN Co goodwill, end up getting fibre internet installed for AU$1000 to AU$2000.

Throw in a two-year contract with an ISP, and that cost could be amortised on a monthly basis; extend it to three or four years, and payments would be lower with the added benefit of encouraging a service discount from the ISP.

It's not as though this is a revolutionary scheme; Google is using community registrations to target its Google Fiber roll-out in Kansas City, in the US. The company has broken down the city — which straddles the states of Kansas and Missouri — into "fiberhoods", and is collecting deposits of US$10 per household for people who are interested in getting the fibre.

The green-light point is, by reports, 40 to 80 homes in a fiberhood, which seems to be an entirely reasonable number.

Whether such a scheme could be replicated in Australia, of course, is another matter entirely. Such a project would require extensive organisation and a willingness by NBN Co to be somewhat more flexible on its price. This might be less of an issue, of course, than sheer scope: with the NBN effort battling to meet its revised roll-out targets, the last thing the company needs is to add even more things to its to-do list.

I suspect homeowners could, with the right negotiating tactics and a measure of NBN Co goodwill, end up getting fibre Internet installed for AU$1000 to AU$2000.

But you never know; it could happen as the roll-out progresses and, presumably, picks up the momentum that it will need to realistically meet its targets. Organisations like StreetSmart Energy are working to use market weight to chisel lower prices out of energy providers, while group-buying sites continue to offer nice discounts on everyday services.

Whether this would translate into the NBN is not entirely clear yet; such an effort would have to be executed without the support of a giant like Google, which has already indicated that it won't be replicating Google Fiber in Australia (ironically because we're getting the NBN).

ISPs, perhaps, could become the instigators of such an effort, motivated by the promise of a big whack of locked-in NBN subscribers who might be willing to sign long contracts to get fibre. Local councils might chip in, since higher NBN penetration would support their desire to paint themselves as "smart" cities.

Who knows: maybe Telstra, reduced to little more than one of many retail service providers (RSPs), will see group buying as a way of tapping into its own fibre-laying prowess, and chip in to the overall cost on the promise of 100 long-term NBN customers.

This whole idea heaps one bit of speculation onto another — but if someone can think of a way to consolidate demand and present a financially viable model for extending the NBN footprint, I imagine that there would be a number of interested audiences for it. The question is: who will be the first to build out a creative, workable way of solving the NBN's last-mile problem?

What do you think? Would you pay AU$1000 to get an NBN fibre connection? And would your neighbours?


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