Hockey misleads on NBN cost and rollout

Treasurer Joe Hockey has incorrectly claimed that the Coalition's National Broadband Network (NBN) would deliver faster speeds to more homes than Labor's proposed policy, in stark contrast to NBN Co's own strategic review, which states that very few premises will have access to 1Gbps download speeds by the end of the Coalition's planned rollout.

Last week, NBN Co released its strategic review into the NBN, detailing the expected cost of six different rollout methods, including Labor's 93 percent fibre-to-the-premises (FttP) rollout, and the Coalition's preferred multi-technology model incorporating FttP, fibre to the node (FttN), and use of the existing hybrid fibre-coaxial (HFC) cable networks owned by Telstra and Optus.

Although much of the finer financial detail of the review has been redacted in the publicly released document, the report states that Labor's plan is now projected to take an extra four years to complete out to 2024, with the cost of the construction set to rise, with peak funding now at AU$73 billion. The Coalition's proposal is also expected to now cost AU$41 billion, but be completed in 2020.

While at the end of Labor's NBN rollout, all users on the fibre network would be able to get 1Gbps download services, the review states that it will be at least until 2030 before 1Gbps is available to the majority of users under the Coalition's preferred model, when the network could be completely upgraded to FttP.

The Coalition government has not yet settled on whether it will proceed with the multi-technology model proposed by NBN Co, but Communications Minister Malcolm Turnbull said that the Cabinet would consider the review along with the cost-benefit analysis into the best broadband model for Australia that is due for completion in mid-2014.

Despite clear evidence from the review stating that only between 65 and 75 percent of premises will have access to 100Mbps download speeds at the end of the proposed rollout under the Coalition versus 93 percent under Labor, Hockey told 2GB on Wednesday that the Coalition's proposal would deliver faster speeds than Labor's proposal.

"The fact is Labor said that the National Broadband Network would cost AU$42 billion, their program would cost well over AU$70 billion, probably closer to AU$80 billion. It would take much longer, and over the same period of time, deliver slower speeds to fewer homes than what we are going to do," he said.

Hockey also claimed that although funding for the NBN is expected to cost AU$41 billion under the Coalition, there would be no more funding after the initial AU$29.5 billion as was promised in the April policy announcement.

"Our program is much more affordable, we have capped the taxpayer contribution to the scheme to AU$29.5 billion and that is it. After that, it has got a pay for itself," he said.

"It has to raise its own money, and it has to start to generate income. We are capping it, and they are going to make it work."

Earlier this week, NBN Co executive chairman Dr Ziggy Switkowski said that Labor's plan to pass 13 million premises by the NBN by the end of 2021 was "never going to happen".