NBN blowouts warned as Turnbull sets new expectations

NBN blowouts warned as Turnbull sets new expectations

Summary: Communications Minister Malcolm Turnbull has said that the wireless network for the NBN was underplanned, with uptake expected to be higher than forecast.

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Up to 300,000 premises have been left off the National Broadband Network (NBN) fixed-wireless rollout, representing an AU$1.2 billion coverage gap, according to Communications Minister Malcolm Turnbull.

As part of one of the six reviews into the NBN since the election, NBN Co has been examining the fixed wireless and satellite rollout for the 7 percent of premises that are not covered by the fixed line footprint of the network.

Speaking at the CommsDay Summit in Sydney today, Turnbull said that while NBN Co was not yet prepared to release the report, there were material problems with the project, with a material underestimate of the likely demand, a lack of spectrum in the fringe metropolitan areas for the long-term evolution (LTE) fixed wireless network, and more premises in the wireless footprint by 2021 than planned in NBN Co's corporate plan.

"The project as planned would not be able to service an estimated 200,000 to 300,000 premises outside the fixed line footprint," he said.

"Those plans understated the growth in houses outside the fixed line footprint."

As such, take up on the fixed wireless network is expected to be between two and three times what is planned, from 230,000 to between 440,000 and 620,000 premises, he said.

A total of 320 wireless towers covering 80,000 premises would not have sufficient spectrum to deliver services, Turnbull added. The costs all added up, he said.

"Taken together, if the NBN were to take steps to eliminate the 'coverage gap', the company faces a deterioration of operating cash flows of its satellite and fixed wireless networks of up to AU$1.2 billion by 2021."

He said NBN Co was exploring joint-venture options with the private industry to reduce the cost for the NBN wireless and satellite project, but said it was unlikely that the operation of that portion of the NBN rollout would be sold off in the short term.

"There was virtually no possibility that NBN Co would be able to offload any under performing asset to the private sector."

New expectations

Turnbull announced that he and Finance Minister Mathias Cormann today issued NBN Co with a new statement of expectations for the NBN that formally tasks NBN Co with taking a technology-neutral approach to delivering faster broadband.

"The statement is consistent with the government's view that rather than imposing technological constraints on NBN Co, politicians are better placed telling the company what objectives, both technical and financial, it should pursue, and how much government money they have to achieve them," he said.

The statement (PDF) directs NBN Co to roll-out a wholesale-only, cost-efficient, multi-technology mix network with discretion over the rollout and technology used so long as it stays within an AU$29.5 billion public equity cap. 

NBN Co must provide a minimum 25Mbps download speed, and a "proportionate" upload speed to all premises, and 50Mbps to 90 percent of premises "as soon as possible".

This comes despite one year ago today Turnbull and now-Prime Minister Tony Abbott promising 25Mbps to all Australians by 2016 and 50Mbps by 2019.

TPG filled the gap

Turnbull said that the government would await the findings of the Michael Vertigan cost-benefit analysis panel's report before announcing its intention around TPG's fibre to the basement rollout. He claimed that TPG only began rolling out fibre because Labor's fibre-to-the-premises rollout was taking so long.

"I should note that had the previous Government allowed NBN Co to deploy VDSL in apartment buildings and office buildings, many if not most of the buildings targeted by TPG would have been serviced already by NBN Co," he said.

TPG only made the announcement of fibre to the building after the election, but when asked about whether TPG was acting in response to the change of government, Turnbull said it was more about the delay.

"They certainly wouldn't have been doing it if there were NBN FSAMs in those buildings already. What I'm saying is that the opportunity exists because you've got these MDUs with no service, and as you know the NBN Co has had enormous difficulty taking fibre to the premises in MDUs," he said.

He said TPG may not have wanted to roll out fibre to those buildings if NBN Co had managed to roll out fibre to those buildings. 

Turnbull would not confirm when NBN Co may reach an agreement with Telstra, but said that it was a more collaborative, constructive environment than had existed between Telstra and the government in the past.

"I'm not sitting there every day at the table, but it is going very well and I think there is a really new atmosphere of collaboration between Telstra, the NBN Co and the government," he said.

"For this thing to work, we have to have a really good relationship with Telstra."

Turnbull today also announced that the MyBroadband website had now been updated to include a speed test page that will collect data on the speeds experienced by residents across Australia.

Turnbull said data from this new function would go towards determining the underserved broadband areas in Australia that will be prioritised in the new NBN rollout.

Topics: NBN, Government, Government AU, Australia

About

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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Talkback

6 comments
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  • Former Merchant Banker Declares Himself An Engineer.

    It's clear that fantasy has taken a foothold in the mind of Mr Flawedband, I remember very Clearly his statements about "Rolls Royce satellites" that he would like to cancel.
    Finds himself in the position of demand completely overwhelming the existing satellites in just 6 months.
    He's fumbling around for solutions and blaming Labor for allowing too high a download allowance (12G a month on most plans).
    Now it's the Flawedband/Jones solution that's flailing around till it fails, they have run out of spectrum, did Flawedband expect it to be infinite or wasn't 5 and 6 G invented fast enough or did he run out of money to build more towers.

    Unfortunately this fool, is not an engineer so it's quite clear that his HCF scheme will fail as the amount of money that will have to be thrown at it is just too high and will have to be a "gift" to Telco's (as yet we haven't seen any plans of how he is going to acquire ownership, what happens if Murdoch says "I want to own the internet"). This 'technology solution" is obsolete before implementation.

    FTTN will also fail, the expense of Telstra pit remediation will be the sword of Damocles just like the asbestos pits of Labor. what happens when the node tests are completed and Flawedband finds his (is it a guaranteed 25/5Mbs or is it an Up To) speeds not being attained at the low cost he expect to build The Fraudband Network, and the construction schedule no better than Labor's.

    Australia will be left with a series of obsolescent solutions that will require new funding from the next government, they should really empty the bank accounts of the coalition members to pay for their mistakes. Australians will have a publicly funded Fraudband to areas that Private enterprise's vastly better solutions can't cherry pick.

    Private profits and Public losses.
    Kevin Cobley
    • Not many engineers go into politics...

      ...but it would be better if non-technical ministers listened to their civil service techies instead of trying to discredit them.

      And, yes, this principle is easily applied to the private sector as well.
      John L. Ries
      • and...

        ...in a parliamentary system like Australia's, it would be better if the parties devoted more effort to recruiting technical people to run for Parliament, so there are people in each caucus who can competently address technical issues and explain them to their colleagues and constituents.

        And yes, here in the States, we need to do a better job of recruiting techies to run for office as well (never send a lawyer to do an engineer's job; or vice versa).
        John L. Ries
  • Telstra's Alan Bond

    In full flight
    Josh you missed the item that black spots and underserviced areas, MUST be prioritised.
    Considering most of these are lack of backhaul and infrastructure, or very long distances from the exchange, or crap copper, he is instructing NBNCo to stop efficiently rolling out the infrastructure and instead run around like headless chooks running a bit here and a bit there all over the nation even if the transits and core infrastructure is not in place.

    No wonder anyone competent has already quit working for NBNCo, - sorry there may be some left, but how long for. Bad as the Communist regimes where ideological purity was more important than competence
    Abel Adamski
    • He probably had to toss in that throwaway line about underserviced areas to keep the National Party quiet. If the Nats ever realise how much of their areas will be shortchanged by the new policy, there would be uncivil war between the govt parties.
      anonymousI
  • The Make it Up As We Go Network.

    Not so long Ago He stood beside Alan Jones quite happy to agree that Wireless is the Future, We don't need Fixed Line Networks any more.
    This clown's capabilities seem to be strictly limited to constant spin & setting up his mates in producing umpteen dozen bogus reviews & reports.
    grump-a1eeb