NBN cost cutting hampered by Telstra deal: Turnbull

NBN cost cutting hampered by Telstra deal: Turnbull

Summary: NBN Co's deal to pay Telstra to access its duct and pipe infrastructure limits the government's ability to reduce the cost of the fibre-to-the-premises rollout, according to Communications Minister Malcolm Turnbull.


Australian Communications Minister Malcolm Turnbull has downplayed proposed methods to cut the cost of rolling out fibre to the premises for the National Broadband Network (NBN), saying that any alternative method still sees Telstra paid for its ducts and pits.

As the government waits on the completion of a cost-benefit analysis into Australia's broadband options before it embarks on a planned overhaul of the NBN, there have been a number of proposals put forward to the government on alternative ways to continue to roll out fibre to the premises while cutting down on the cost of the network.

Most notable was the Tasmanian government's proposal to use existing power poles owned by energy supplier Aurora Energy. Recently, many NBN advocates also seized upon a report published by Construction Industry News in late January that said a Western Australian contractor had developed vacuum technology that could reduce the amount of time required to clean Telstra's pits and pipes for remediation for the NBN, and thus reduce the cost of the rollout of fibre to the premises.

The proposal was one that Perth Labor MP Alannah MacTiernan made reference to in a speech to parliament today about proposed consumer protection amendments to the Telecommunications Act. MacTiernan referenced "new cable-laying techniques" developed in Perth that would make the NBN more cost effective.

"This, in my view, will enable us to do a lot more fibre to the premises in a very cost-effective way. It's almost a logical consequence of engaging in a rollout that these new techniques would be developed," she said.

In response, Turnbull said he believed MacTiernan was referring to "micro-trenching technologies", similar to that used by Google for its Fiber project in the United States. Micro-trenching sees small grooves a maximum of 2cm wide and 30cm deep dug into asphalt or the ground for the fibre cable, instead of the traditional 60cm wide, 60cm deep holes.

Turnbull said that such a proposal was hampered by the former Labor government's AU$11 billion deal with Telstra to lease pits and ducts from the telco giant for NBN Co's fibre.

"I can assure the honourable member that both I as the minister, and NBN Co of course even more so, are very aware of that, but one of the things the honourable member should bear in mind is that her colleague Senator Conroy, while the minister, allowed the NBN Co to enter into a comprehensive agreement with Telstra of a take or pay kind, whereby the NBN Co is obliged to use Telstra's ducts or pits, and, if it doesn't use them, doesn't use the nominated vast quantity of them, to pay for them nonetheless," he said.

"So, yes, there are in some areas more cost-effective ways of putting fibre underground, and horizontal drilling and installing new ducts, and they can be taken into account, but the honourable members opposite need to remember that the government is not dealing with a blank sheet of paper here."

However, Turnbull's claim of NBN Co being bound by the Telstra agreement comes as the minister has previously suggested that he is confident Telstra's agreement with NBN Co can be easily and quickly modified to allow for his own preferred NBN alternative plan, which would see Telstra provide access to its copper lines for a fibre-to-the-node network.

In a statement released late on Tuesday night, MacTiernan confirmed that she had been referring to the duct cleaning technology, and said Turnbull was "in the dark" about the technique developed in Perth.

"The new techniques, which use vacuum suction and high pressure hosing to clear blockages in Telstra's pits and ducts, have nothing to do with micro-trenching and are totally consistent with the Telstra contract," she said.

"Either Telstra or NBN Co is keeping this from Minister Turnbull, or he is wilfully ignoring the advances that will slash the costs of delivering fibre to the premises."

Today, Turnbull said the government would soon release maps outlining the best and worst places for broadband in Australia, following a study conducted by the Department of Communications when the Coalition took government in September.

Although he had promised for the Broadband Availability and Quality report to be released by Christmas 2013, the department only released a summary of the report, and admitted that in putting together the report, the department did not test the actual speeds available on individual lines in Australia.

Turnbull has said that the website being put together for the maps would allow users to report feedback on their own broadband experience, and this in turn will be used for NBN Co to determine priority areas.

Topics: NBN, Government, Government AU, Australia


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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  • If you build it, they will come

    How about Malcolm stop wasting time and money doing these "reviews", "reports" and telling us everything is Labor's fault. I have yet to see any real evidence of any progress that wasn't started by the Labor build.

    Malcolm, for the love of Australia (if you have any). Build it once, build it properly. Sure, save as much money as you can along the way. That is your job. But your current plan for FttN will be NO BETTER than the ADSL2+ the vast minority of us already enjoy. Lab test results on VDSL are a waste of time when there are not enough usable copper pairs in most suburbs to service existing residents (pair gain, RIM). If you're serious about VDSL then we'd have to put more copper in the ground (double) to make it work. Pointless.

    Go well, go fibre.

    Make Australia proud instead of being a nuisance.
  • NBN - Labor Policy Vomit

    Ramrunner. Malcolm has the unenviable task of unscrambling one of many Labor Policy Vomits.
    Poor management, zero planning and a philosophy of punting on one technology has resulted in this debacle. Billions of dollars have been wasted due to Labors decisions in a myriad of areas ...NBN is just one of them.. The cash is gone Ramrunner... from people like you and me. I am presuming here that you are a tax contributor.
    Thankfully we have an adult government in place that will at least stem the financial hemorrhaging of Labor folly.
    Poh Lin
    • Sarcasm?

      That is sarcasm surely? I can't tell. Labor may have done many stupid things, but a fibre NBN is not one of them. Please educate yourself in this area if you really believe this as you might have been deceived by what has been said in media.
      • maybe you misunderstand?

        While I agree fibre nbn is, and will be, a great thing, you seem to have missed Poh's main points - poor management, zero planning, billions of dollars wasted. You can't disagree with those points. And we do need to remember that all Greenfield/ industrial/ business estates are to be serviced by newly laid fibre, the current government is trying to work out a cost effective way of delivering sufficient broadband to the rest of Aus - a sledge hammer approach is generally not the best way to take on such a massive project.
        Andrew Hargrave
    • Been reading too much news limited press i think.

      So labors waste hey, just like how they now want to end the age of entitlement, most of which was created by the previous Liberal government with things like baby bonus, first home owners grants and want to waste more money by exorbitant maternity leave policies, when a quality fibre network, would allow many mothers to return to work sooner by working from home thus increasing productivity!

      Labor gov had many flaws but the NBN was not one of them and when half of coalition voters supported the NBN, it kind of suggests it was a pretty good policy.
      Justin Watson
    • An adult givernment?

      Are you deaf as wall as blind? An adult government acting like spoilt children more like it. Tony "Ali Barber" Abbott and his bunch of thieves Brandis, Joyce, J. Bishop and Randall who all rorted their entitlement expenses, obviously didn't listen to their parent's advise not to steal, lie, exaggerate, blame others and not be selfish. The only expertise this lot has show is how to do a perfect double back flip and a magic act of making industries disappear forever. As for Turnbull sending us back to the copper ages with his fraudband, he will forever be remembered as giving us a big white elephant that had a very short life span. No vision what so ever.
  • Time to Grow Up

    Unfortunately Poh, many self proclaimed Adults, via media support from Alan Jones & Murdoch tend to feed naive little children all sorts of fairy tales such as Santa Clause, the Easter Bunny & their pixie dust 'Cheaper & Faster' Fraudband hoax while sending the last of our manufacturing capacity offshore & protecting our borders by gifting Indonesia an endless supply of brand new lifeboats.
    Didn't your parents warn you about offers of candy from strange adults such as Malcolm?
  • Turnbull's head on Telstra's Guiottine.

    Hopefully Telstra will press home it's contractual advantages in it's dealings with Mr Fraudband and insists that it's contractual arrangements be honoured. If not make Mr Fraudband Pay and pay, tie him up in endless litigation until he strangles.
    Kevin Cobley
  • NBN cost cutting hampered by Turnbull

    Let's see,
    Instead of a fast, reliable universal high speed, low maintenance, low power consuming, future proof national fibre network we instead waste at least $41 Billion on HFC & buying back obsolete copper only to keep it on expensive node/vectored life support for the next 10 years at best before dumping the lot at the nearest tip & spending likely twice as much struggling to unscramble Turnbulls omelette of a multi tech dogs's breakfast of incompatible equipment in order to satisfy the LNP's favoured sponsors.
  • Really missing the point

    The real problem is incompetent NBN Co employees with no FttH experience (as acknowledged by Quigly during the Phil Dobbie interview) having contractually tied us taxpayers to third rate, out of date designs, supply contracts and solutions.

    Much as we love to bash the pollies frankly LNP's key crime was putting in stooges as opposed to FttH engineers - and then not listening to industry as these stooges proceeded to betray all we had worked for to get FttH. Hopefully LNP has not signed us taxpayers up as standing surety to the contracts - and hopefully Turnbul can liquidate NBN Co and allow us to start again.