No NBN fate but what NBN Co makes

No NBN fate but what NBN Co makes

Summary: With Telstra's network available and all the boxes ticked around regulatory reform and competition approvals, NBN Co has now set its rather ambitious targets and has only itself to blame if — or when, as the case may be — it fails to meet them.

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TOPICS: Broadband, NBN
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No matter how you feel about the NBN, you have to give it to Labor: they know how to make it look like they're doing something. And yet, as the NBN kicks into overdrive with this week's announcement of the company's three-year plan, the ambitious targets the party has announced seem almost destined to make liars out of it. The real question is: will anybody care?

The numbers speak for themselves, really: 3.5 million properties to be passed by NBN roll-out crews, in around 1500 communities the length and breadth of Australia, within the next three years. That's a huge number, and it had to be: in order for the project to be completed by 2022 as has been mooted, NBN Co needs to ramp up quickly and keep its breakneck run rate for the next 10 years.


NBN Co has set ambitious goals for itself; now only it will decide its fate (until the election, that is). (Screenshot by David Braue, ZDNet Australia)

A few easy calculations show the scope of this challenge. To install 1.17 million services per year, NBN Co will need to connect 3196 NBN services per day, every day of the year including weekends. Exclude weekends (which involve expensive overtime) and the end-of-year industry shut-down, and you've only got 251 working days per year — which will mean installing 4648 services per day, day in and day out (for the purposes of these numbers I have ignored the 28,000-odd properties where the NBN is already installed).

Assume, optimistically perhaps, that it takes an hour per house to install an NBN service; a crew will therefore be able to install, say, eight services per 7-to-5 workday. Factor in the number of cases where something will go wrong — a resident will be away with a locked gate, flooding will prevent works on that day, team members are sick, consent has not yet been gained so the team has to come back later, or even because a nest of rare possums has installed itself in a Telstra duct and can't be touched — and it's probably safe to revise this downward to an average of six services connected per day, per installation crew.

To keep up with the average run rate and install 4648 services per day ... that's going to require the kind of military efficiency and good fortune that is rarely associated with government projects.

Therefore, to keep up with the average run rate and install 4648 services per day, NBN Co will have to be managing 775 different installation crews around the country. Each of those crews will spend the next 18 months installing services in each one of the communities announced yesterday, then move on to the neighbouring community for the next 18 months.

That's doable, but it's going to require a lot of new, trained workers and the kind of military efficiency and good fortune that is rarely associated with government projects. Throw in the unknowns — potential planning issues, hostile residents and the little matter of the looming election that could throw a huge spanner in the works — and there is a great deal of risk around the project.

Labor, of course, knows this better than anybody, but with the election looming and no obstacles in its way for the next 18 months, it has no choice but to ramp up NBN Co's operations and push hell-for-leather to build and sustain momentum. And if Labor fulfils many pundits' expectations by losing the election next year, it's fair to say NBN Co has zero chance of reaching its target. Even if the Coalition ultimately performed its much-vaunted cost-benefit analysis and found the FTTP project was the best way forward — and they would, if only because there are so many additional costs involved in discontinuing the current roll-out — the intervening delays would sink the time frame announced this week.

But in the long term, it may not matter that Labor has bitten off way more than it can chew: Australians of all stripes are rushing to the NBN Co availability guide to find out if they're going to be among the NBN blessed (I, sadly, am not; are you?); will they care if they have to wait a bit longer?

If the roll-out has fallen behind targets by the time the election comes, Malcolm Turnbull will be all over it; having utterly failed in every other attempt to discredit and interfere with the project, he now has little choice but to sit back and watch as NBN Co moves on outside of his control. His statement after Labor's announcement confirms that he has all but given up any hope of influencing the project — and expects only that voters hold Labor to its ability to deliver on its promises.

Having utterly failed to discredit and interfere with the project, Turnbull has little choice ... The Liberals now have to sit back and let the NBN sink or swim on its own power.

That, for once, sounds entirely reasonable. With no external obstacles in its path, NBN Co now has to show Australians that it can actually deliver what it has promised. Until we get near to the election, we can expect a quieter discussion around the NBN debate, with inevitable hand-wringing over take-up and progress as the company releases the occasional update on roll-out numbers. Voters will decide whether they're happy with the project's progress or not, and we can all pick up the debate from there.

In the meantime, I have no idea whether Malcolm Turnbull will get NBN services into his own house: part of his electorate got it, and part did not. Yet one has to wonder: if he's in the green area, would he refuse the service on moral grounds? Or just sign up and make the most of it, perhaps calling it "research" to plan his future opposition? (and, maybe, watch a bit of on-demand West Wing)?

Either way, the Liberals now have to sit back and — as I suggested they do way back in late 2010 — let the NBN sink or swim on its own power. There is no indication yet that it may end up drowning, but whether it can power into the election with its head well above water now rests squarely on the shoulders of Mike Quigley and his merry band of NBN installers — who will, hopefully, be coming soon to a neighbourhood near you.

What do you think? Can NBN Co reach its targets? Is Labor setting itself up for failure? Will the public care? And — most important of all — did you win in the NBN lottery?

Topics: Broadband, NBN

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Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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32 comments
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  • Yes I won the NBN lottery.

    The NBN Co. is not a Government Department so it has a fair chance of reaching the goals that it has set for its self. The simple fact is that the Government is whistling in the wind when they talk about what the NBN Co will or wont achieve. The NBN Co will set its own goals and make its own decisions regardless of the political commentary.

    The success or failure of the NBN Co. is in the hands of the NBN Co. not the politicians. For this I am very grateful, as there is a better than even chance that by this time next year I will have a revamped telecommunications system at a reasonable cost. If the politicians were running the show I am sure it wouldn't happen.
    Bob.H-819a5
  • It is some time since I have contributed to the learned submissions to this wonderful site but I now feel I must because I agree, for the first time, with the content of one of David's articles. Of course the NBN co has no chance of even going close to its three year goal not only for all the reasons that David recites but because in 16 months (or sooner) there will be a change of government and a new level of sanity will be injected into the NBN. Turnbull (presumably) will re-work the whole project to eliminate at least part of the huge cost of running fibre cable to 93% of private homes in Australia. Of course we need high speed fibre comms to all commercial and government enterprises but to every home in every back street?? Give me (the taxpayer) a break. If we take the recent Queensland election as a model for the upcoming Federal election I think we can confidently predict that Australia will indeed be "future proofed" from the ALP for at least 10 years. Oh joy oh bliss - I can't wait.
    Brianab
    • Another NBN article and and the ill informed come out of the woodwork (yes you Brianab), yet again.

      You say you haven't commented on an article in a while. Guess we should all be thankful for that, as you have been sucked in by the Liberal FUD regarding the NBN, and you clearly have not done any research.

      I hear "taxpayer cost" "don't need it" streaming out of your comments, which means you MUST secretly be a Liberal backbencher surely.

      Mate, the NBN first of all initial INVESTMENT is nowhere near the 43b the fear spreaders will have you believe but is actually less than 30b. Still sound like a lot? It has a projected RETURN of 7%. IT IS NOT A COST. Please actually read some facts without just swallowing the Liberal pills they're feeding you.

      And as for don't need it? What connection do you have mate, because I'm in Forrestdale WA and if you really have any idea what a very large number of Australians have painfully found out since the privatisation of Telstra is that the largest telco DOES NOT GIVE A TOSS about infrastructure or people. Only money. The sooner this monopoly is smashed, the better.

      Thankfully most of us are far more educated on this subject than you seem to be.
      Ramrunner-5dd3e
      • It's interesting that you jump to the conclusion that for anyone to be against the NBN they must've been deceived by liberal (or other) information that you class as inaccurate and incorrect. The fact that you make assumptions about someones political persuasions further highlights your insecurities in the FACTS of the debate.

        Whilst i'm not going into detail on this occassion as most of what i would raise i have already done so and see no need to repeat myself, the point of this comment is simply. There isn't one view on this issue and there isn't a RIGHT and a WRONG for everyone. It comes down to whether people believe theres MORE positives to the NBN or whether there's MORE negatives (or alternatives).

        Just accept that other people have different views that are no more or less valid than your own. That they too base their opinions on fact (not necessarily all of them, but most would to a degree). The simple fact is that the NBN will go ahead at LEAST until the next election and as the article points out, the debate is now turning towards a question of execution efficiency, which is an improvement to the mud-slinging that has been going on.

        Last point, Gwyntaglaw- Other options (as even you point out) have been explored. There is currently fibre to major medical facilities, government organisations and major business districts. Some medium sized businesses would have access to this, some don't. I think it's safe to assume most small businesses don't have access. The Reason why not? Because as yet it's not cost-effective to do so for a private business (eg. Telstra/Optus), just as it's not been cost-effective to do a FTTP roll-out nationwide. I'm yet to see a valid reason as to why a more limited fibre roll-out with the aim of onlying capturing the vast majority of these businesses is not of similar effectiveness to a FTTP roll-out. I understand it wouldn't provide 100% cover, but then it's cost would be vastly less. And the challenges to small and medium businesses would then be similar for internet access as it is for other desirable facilities, like location, road or rail access, access to applicable clients, etc. Those you valued fibre internet access higher would need to choose a location within such a fibre roll-out, those who didn't wouldn't have to worry about it. Much the same that many businesses don't value rail access, however those that do will move to where it suits them best. Such a roll-out would provide most of the benefits as the NBN with a smaller price-tag. Again, not attractive to the private sector for the roll-out, but no reason the government couldn't have gone with such a strategy. They haven't and there's merits both ways, but the point is that the NBN isn't the only viable option, it's just the option that the government has chosen.
        AWY-7dfd5
        • LOL he jumped to the conclusion about Brianab, only to find that Brianab has previously told us he "is" a Liberal party member...!
          Beta-9f71a
          • I have not, and being a party member or not is not relevant to ones views or facts that are applicable to the subject.
            AWY-7dfd5
          • Don't get all upset this wasn't even about you.

            Hard to believe the world doesn't revolve around you, eh?
            Beta-9f71a
    • Ramrunner has already said most of what I would have said.

      But one thing deserves a response on its own.

      Brianab says: "Of course we need high speed fibre comms to all commercial and government enterprises but to every home in every back street?"

      If there were an easier, cheaper, more effective solution, it would have been tried already. The problem is, there isn't one. Brian's question is a call, in effect, for the government to pick winners - businesses that get fibre and those that don't. The trouble is that most big businesses and government agencies already have a fibre optic connection. It's the small and medium businesses that struggle - because they are not all located in CBDs or business parks where connections are more readily obtainable.

      And the options for regional service provision all suck, basically, unless you move to a whole new infrastructure. None of the options - wireless for all regional centres, FTTN, "more competition" or subsidies will really deliver the goods. If they could, they would have been tried already.

      When Turnbull's precious Cost Benefit Analysis or Productivity Commission review is completed, it will find that the Government's approach really is the only one left. And if they haven't shut it down for the 12-18 months that this will take, they will simply let the NBN rollout continue, with some cosmetic tweaks, no doubt, so the Libs can claim they have "fixed" some non-existent problems. Most likely is that they will dial back the 93% fibre penetration figure to something more economy-sized - probably in the 80-85% range. Just because.
      Gwyntaglaw
    • It's been a long time since brianab contributed... yes it's been good brian, so why did you spoil it?

      Almost right Ramrunner, Brian told us previously that he is a lifelong Liberal party member... obviously
      Beta-9f71a
    • Brian. what branch do you belong too. Be happy with your dilal up and dont mess it up for the rest of us that use the net for more than just speaking the LP line.
      bucket2004
      • ... and a retired lawyer.
        Beta-9f71a
  • FYI, Malcolm Turnbull's residence is in Point Piper which is scheduled to begin March 2015. Somehow I could probably imagine that he would have serious bandwidth already. He needs to spend his squillions on something.
    nomadtales
    • That certainly adds a nice wrinkle to the story!

      I subsequently asked him about this and he said only that he had no choice in the matter. Poor thing. It sounds like he would prefer to keep his Telstra ADSL than be forced onto a faster NBN service.
      braue
  • I've been mulling something over to do with the continuation of the NBN rollout.

    Turnbull's latest tune is that the Coalition will let any contracts run their course, should they win office. This is refreshing news, since it was entirely plausible based on earlier statements that they intended to stop the rollout dead cold as soon as they were sworn into office.

    The real question is: what contracts, and how long will they have?

    My understanding is that the big state-wide and multi-state contracts with the likes of Silcar and Syntheo were signed for two years in mid 2011, with an option to extend for a further two years. This poses an interesting question, because it puts the renewal timetable slap bang in the pre-election period of mid 2013 (assuming that the election is held around October 2013).

    What will the ALP do at that point? Of course, with every faith in the worth and importance of the NBN, and assuming that the contractors aren't failing to deliver in a big way, it would be simply prudent to renew at that time. Despite any howls of unfairness from the Coalition, there would really be no reason for the ALP not to set the contracts in place for a full two year extension at that point. It would be before the caretaker period, and there is no convention that restricts a government's ability to make forward plans, including committing large forward expenditures, outside of the caretaker period.

    However, there may be a perverse incentive for the ALP _not_ to sign a full extension at that point. If the polls soften, and re-election is not a mathematical impossibility, it would actually strengthen the PM's stated platform that a vote for the Coalition is a vote to scrap the NBN - and that to guarantee continuation of the NBN, voters MUST re-elect the ALP.

    Otherwise, the ALP may hand the Coalition a popular project that cannot be easily cancelled, without really being able to use the realistic threat of termination. Voters could have their cake and eat it - "we like the NBN, but we don't like Labor". And so they could merrily vote out an effective government that has failed to connect with its message, while keeping a key project which is the fruit of that effectiveness. And letting the Coalition take the credit without taking the heat. Yowza.
    Gwyntaglaw
    • I have wondered the same – whether Abbott and Turnbull will ride the wave of discontent over Labor in general, then get into office and throw their hands up to say "oh, look – it's all too hard and we're stuck with what Labor has given us". That said, Turnbull did commit to stopping the project as soon as the party got into office, if only long enough to conduct his vaunted cost-benefit analysis. And if the Liberals were to take office and fail to conduct that CBA, it would seem to negate their three years of heated lobbying – not to mention putting their much-trumpeted economic credentials up for questioning. So I would assume there will have to be a sudden and potentially disruptive (and punatively expensive) pause in the NBN after a Liberal election win, no matter whether they eventually decide to just continue the fibre rollout.
      braue
    • A very interesting point. It will be intriguing to see how the government plays it politically.
      AWY-7dfd5
  • Oh Dear I appear to have struck a nerve. Sorry chaps - no offence intended. Gwyntaglaw, who I have noticed from his previous posts, suffers from acute pollyannaism - to wit - his most recent quote: "If the polls soften, and re-election is not a mathematical impossibility, ". Gwyntaglaw I do not know what planet you are living on but the ALP is as dead and John Cleese's Norwegian Blue parrot. Ms Gillard, Mr Conroy and most of their ministerial colleagues are all out of work come the next election in 16 months or sooner. My old sparing partner Beta (surprised he's not Omega by now) continues to trot out his usual diatribe about my alleged party affiliations.

    As for my WA colleague Ramrunner who lives in Forrestdale he seems to imply that I have some sort of preferential treatment from Telstra - quite the contrary - I happen to live in Mt Pleasant and have an excellent ADSL2 service that is more than fast enough for my needs. MY son has just acquired a new iPad 4 (or is it 5? not sure) and he tells me that the power of this new device has largely rendered his "state of the art" ADSL2 Apple system at home redundant. For my part I have just returned from a jaunt up the Murray river. I took my wife's notebook along with her 3G Telstra broadband MODEM and had good quality wireless signal for 5 days on the Murray. Of course I only do simple things like e-banking, email, checking the NYSE on CNBC, following the ASX and reading Drudge. For all my quaint simplicity I'll bet you London to a brick on that I do considerably more that some of the happy folk that will have the fibre cable pass their homes. Many of them can't spell computa leave alone own one! Finally by the time the NBN gets even it's three year target rolled out (in about 2018) wireless comms will have progressed to a point that the concept of having a computer in a home tethered to a cable will be considered equally quaint.
    Brianab
    • Very impressive - I often struggle to get online in the middle of the Melbourne CBD. Perhaps there is a secret agenda here to redistribute the population by driving all broadband-loving Australians towards rural areas where they can actually get connected on wireless? Your ADSL2 service sounds impressive too – sadly most Australians can only dream about an "excellent" ADSL2 service and will, I would suggest, jump at NBN fibre whenever it manages to roll up their street.
      braue
    • My old sparring partner... he says as he picks himself up off the canvas for the umpteenth time.

      You are the master of understatement Brian.

      And ADSL is fast enough for you, so ***k the rest.

      Thats the spirit.
      Beta-9f71a
      • Ooh BTW Brianab, you are a Liberal party member, so you said previously and it shows!

        So either you are lying now (as you seem to be inferring you aren't a Lib member after all) or lied before... either way, you know what equates to?

        Look that's fine to be a subservient sheep to a political party, but don't come here preaching the party diatribe. We are here to talk NBN not the love of one's political masters!
        Beta-9f71a