NBN contracts may be left alone: Turnbull

NBN contracts may be left alone: Turnbull

Summary: Shadow Communications Minister Malcolm Turnbull has indicated that a coalition government may let current National Broadband Network (NBN) contracts run their course, rather than face a multibillion-dollar termination payout bill.

TOPICS: NBN, Broadband

Shadow Communications Minister Malcolm Turnbull has indicated that a coalition government may let current National Broadband Network (NBN) contracts run their course, rather than face a multibillion-dollar termination payout bill.

The 2012-13 Federal Budget papers revealed on Tuesday that as of 31 March 2012, the government is liable to pay out $1.8 billion in compensation to companies that NBN Co has signed contracts with to construct its $35.9 billion broadband network.

As the 2013 election draws closer, Turnbull has indicated that a coalition government would look to scale back the roll-out to a fibre-to-the-node (FttN) network in a number of locations. This would be instead of fibre to the home, which he believes would allow the roll-out to be completed cheaper and faster. If this policy was to change immediately, Turnbull would need to either exit or renegotiate a number of the contracts with the construction companies rolling out the fibre.

But speaking to journalists today, at a post-budget luncheon in Sydney, Turnbull said that the Coalition would honour the current contracts that the Labor government has signed, provided it is more cost effective to do so.

"We're not about breaking contracts, even if they've been entered into unwisely. Where contractual commitments have been made, the Commonwealth has to honour them," he said. "If there are termination provisions in some contracts, I suppose that's something you could look at, if it made more sense to terminate something than to continue with it. But really, I don't anticipate that happening."

Turnbull said the government has made a lot of decisions about the NBN that the Coalition wouldn't have made, but he said that the Coalition can't "unmake" those decisions.

The current set of construction contracts for the fibre portion of the NBN are due to expire in mid-2013. NBN Co will negotiate these contracts soon, which will take the contracts out to expire in 2015. This isn't a concern to Turnbull, who indicated that in many places, the Coalition will continue with a fibre-to-the-premises network.

"What it's all about is about completing the NBN faster, cheaper and consequently doing it in a way that will make it more affordable to customers," he said.

"We're not ruling out fibre to the premises, either. There will be areas where fibre to the premises makes a lot of sense — where copper has deteriorated or is more costly to maintain. You take a rational approach with what is more cost effective."

Topics: NBN, Broadband


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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  • The Coalition must be getting a lot of negative feedback from people & businesses who need the NBN.
    Or are they trying to pander up to the independents to whom they lost the last election because their extreme right wing view prevented them from reaching an agreement?
    Either way, adopting the NBN as is would make a big difference to their support base & as we have seen, Abbott would do anything to get himself the PM's job.
    • let us hope the NBN is past a point of no return for the equality of all Australians
  • Their not going to tear up FTTP contracts and not ruling out FTTP (which we don't need and is wasteful overkill - *sarcasm*) in areas...

    LOL, they want their white elephant and to eat it too... what ever will the FUDster arge over now, that their hero admits FTTP is the best option.

    Otherwise they'd just replace the copper with copper, wouldn't they?

    • LOL, so now Turnbull wants to roll out fibre "where copper has deteriorated or is more costly to maintain" (remember when it was "for greenfields"?) I guess Turnbull forgot that that means ALL of the copper. Well so long as there is more fibre rolled out they can flip-flop as much as they like as far as I'm concerned, however this is EXACTLY what I said would happen. The coalition clowns will have to constantly be changing their FttN patchwork plan plan until they come to the conclusion that FttH is the right answer. Welcome to 3 years ago dummies.
      Hubert Cumberdale
      • What is worse is the rubbish about greenfields

        Telstra has often rolled fibre to greenfields as 2mb ISDN and breaksout to copper phone. This means the fibre actually prevents internet for some people. I had problems in a quite upmarket development getting ADSL as the copper lines were allocated already and I was on the fibre.

        The fibre is run because it is better and cheaper than copper for Telstra, but ADSL doesn't run on it so they run some copper for ADSL users.

        RIMs are a newer development for Telstra, it again allows them to limit the product to DSL speeds and overcharge.

        Anti-competitive Telstra could have run fibre and done mixed voice & data but they don't use new tech that might interfere with their product offering. They would rather run as cheaply as possible and mess the consumer around and overcharge for obsolete technologies.

        Also a story recently tweeted by Turnbull that greenfields were missing out, I found the list of developments getting NBN, heaps of greenfields getting NBN.
  • Not a change in position at all..

    Its pretty much what Turnbull have been saying all along (though I admit the rhethoric from his predecessors were quite different).

    The likelihood is for existing shorter term build contracts to remain in place. And whatever is built would be made operational and then possibly even sold off (at a loss, most likely)

    Which is by the way you can see why people who are anti-NBN in terms of overall policy is also keen to get it first just like anyone else. Those who get it first will get sole benefit of FTTH whilst the entire taxpayers foot the bill with the missing out.
    • Not a change in position "at all" and "pretty much" what he's been saying?
      • Yeah if the coalition gets in they will ruin it for everyone they can.

        Change is they may not ruin it for as many people as they were going to before.

        They have backed down because they have been hammered with some home truths, such as copper costs more to maintain than fibre, and copper is being neglected in some areas.
  • Turnbull/Abbott, hurry up and say that the NBN in Fibre to the home form will continue in most cases under your government so I can vote for you in the next election.

    I don't want to vote Labour again but I will not support Liberal until FTTH is the Liberal policy. This is pretty much the only issue that will determine my vote.
    • Interesting how some who support the NBN will forsaken the party who had the balls to actually implement it and will readily reward the party who have from day 1 lied and tried as much as they could to stop it... if/when that party may have give in to the NBN...

      As one who voted for Howard then Rudd, I won't be voting Coalition again until Abbott is gone and they put someone in charge with a positive view for Australia and Australians and will treat us with respect by at least telling us his policies, regardless of whether they have succumbed to the NBN or not.
      • Ditto. Malcolm should be reinstated as leader. The liberals would cruise for years. Mr Negativity and Sloppy Joe are just disappointments and its difficult to see them as true leaders of an alternative government.
        • Turnbull will not lead the Libs again. He is merely trying to soften Tone’s DEFINITIVE statement in his Budget Reply: they will not proceed with the “White Elephant.”
      • Beta,
        "they put someone in charge with a positive view for Australia and Australians and will treat us with respect". Well that pretty much rules out both parties doesn't it! Remember Juliar's carbon con tax lie!
        • Remember John Howard saying "There will never be a G.S.T under my government"

          I dont think it matters who is in power, they are all politican & politicans lie - not one - ALL
        • Lie?

          It provably wasn't a lie.

          The lie is pretending it is a lie.

          It arguably isn't a tax, but they decided not to split hairs.

          Long term it isn't a tax. Did anyone notice that the policy was in the end decided by a comittee? One that the Liberals decided not to participate in.

          Did anyone notice that the government is a coalition government? Making the Lib/nats upset because they couldn't handle the realities of the voters.

          When Abbott realises the election is over, maybe he will stop making promises to wreck everything.
    • Agreed 100%, as someone who is attached to an exchange via a RIM, on **** poor quality copper, that SAME exchange being at capacity so the new estates at Piara Waters and Harrisdale CANNOT get wired broadband, have had to resort to NextG, which is now also at capacity and about dial up speed, FTTP CANNOT be dismantled/dialled back/whatever.

      The coalition need to be forced to spend a few weeks living in my area or even the new developments up the road and living solely on their idea of internet connectivity for the future.


      There are obviously major issues with labour that SHOULD pause me to consider my next vote, but while the coalition is headed by clowns, decisions become easier
      • Exactly; totally agree on all points. Am also stuck on a RIM which is full, so the new houses in the area can only get dial-up; or a wireless dongle, which is quite slow because there are so many of them... I was really lucky even to get ADSL1.

        The joke is that this is in suburban Canberra, but we're not laughing. Obviously no conservative politicians live in this district, but they should be made to.
  • So, come 2015 when the FTTP rollout is one-third complete, the Great Leap Forward will be to go to... FTTN?!?

    By that time, Australia would be pretty much the only developed nation talking about inaugurating a FTTN program. Everyone else will be going fibre all the way. Won't that be fun.
  • An article like this really brings out those who won't look past their own feet.

    It's interesting that nobody here seems to think it's a good thing that just because the liberals disagree with a labor policy, the NBN, they're not going to screw the country over by recklessly breaking contracts when there's a net benefit to simply complete the contracted work.

    Whilst that wouldn't include the entire NBN, unless contracts are renegotiated prior to the next election, it's still a big thing to acknowledge you'll finish what someone else started. Maybe before we ask politicians to improve, it is in fact ourselves who should be improving, to look at both sides of an issue and find common ground, rather than just the bits that we can argue to death about.

    I think this is the biggest positive step forward that the liberals have publicly taken in regard to the NBN and they deserve to at least not be attacked over it. Have some begrudging respect if nothing else.
    • Whilst it is a positive step, it does not change the fact that their priority is to provide a second rate service for the peasants that is not suited because of its low upload capacity for business ( start ups from home where so many businesses have started from ) or even future private needs, that is overlooking the copper maintenance and inherent limitations . About the only value is in downloads, more than likely porn. So in reality Abbott and the libs are pffering a limited infrastructure purposely built to watch porn, not much use for anything else
      Abel Adamski