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NBN Co denies claims of cost-saving fibre 'pilot' study

NBN Co has denied undertaking a pilot study using cost-saving techniques to scale down the cost of rolling out fibre to the premises.

NBN Co has denied that a cost-effective fibre-to-the-premises (FttP) rollout to 2,484 premises in Melton, Victoria, was a pilot of design improvements to the National Broadband Network (NBN) rollout proposed by the company's former CEO.

Fairfax Media reported on Saturday that according to internal documents, a "pilot" rollout in Melton using design changes in the NBN FttP rollout proposed by the management under former CEO Mike Quigley found significant cost savings and led to a much faster rollout of the network in that location. The trial saw the rollout completed in 104 days, with more than 90 percent of premises serviceable, 61 percent faster and 50 percent cheaper than previous rollouts, according to the report.

In December last year, Quigley said that NBN Co had found new cable developments, more efficient testing methods, smaller footprints for the multiports, reductions in fibre counts, and corrections in planning tools that allowed greater fill ratios for ducts, which would have reduced the cost of rolling out fibre to 93 percent of Australian premises.

Critics of the Coalition government's move to a "multi-technology mix" model of the NBN including fibre to the node and hybrid fibre-coaxial have said that these cost savings could justify continuing the fibre-to-the-premises model at a significantly lower cost than the AU$71 billion the NBN Co strategic review claims the rollout could cost.

In a lengthy rebuttal to the original report today, NBN Co said that the cost efficiencies used in Melton, such as the smaller cables and multiports, were already being used elsewhere in the rollout as part of NBN Co's constant evaluation for cost efficiencies. Additionally, NBN Co said that Melton had significantly fewer multi-dwelling units to install fibre into, where NBN Co has historically faced difficulties in installing fibre to each individual premises.

NBN Co also said that cost per premises for FttP in other parts of Victoria had actually been cheaper than in Melton. NBN Co said that the results of the Melton rollout could not be extrapolated to the entire NBN project.

The company said that any cost savings incorporated into the NBN rollout would allow the company to use fibre to the premises where it is cost effective.

"The current model is not about a singular technology; rather, is about doing whatever it takes to get the NBN to you as quickly as possible with the least cost and the least disruption while meeting your technology needs," NBN Co said.

"Like any sensible business, we will continue to review our processes and apply best practice where we can. That's just common sense. It is something every taxpayer should expect of a project for which they are paying."

NBN Co originally failed to include the savings , calculated to save NBN Co AU$4 billion in total, as part of the cost for continuing to roll out fibre to the premises in the strategic review, but has now started to incorporate some of the components in the roll out, as revealed by the document.

NBN Co board member Simon Hackett last week said that NBN Co's structure changes under the new management and board would allow the company to weather changes in government policy, and potentially switch back to a full fibre-to-the-premises rollout if a future government mandated it.

"One thing I'd say is a ray of hope for the people who would like to see the old pony come down the road — the one carrying only the fibre — is that I would say to you it is easier to teach this particular entity to add more technologies to its network than take it away," he said, speaking at the Australian Network Operators Group conference in a personal capacity last week.

"If you picture a world where NBN Co has hopefully gotten the hang of deploying all these technologies; if a future government said 'that's great, but turn off all those other things and just go back to doing fibre', that's a pretty easy thing to do, because that wheel is already turning.

"It is important to appreciate that inside NBN Co, none of this is about policy; it is about doing what the government tells it to do. So if a new government changes, it'll just have to change with it. I think needs to get better at changing with government whim, because over the long-term history of the network, and the long-term future of the network, it will get its policy changed lots of times."