NBN Co not bound to fibre to the node in Telstra deal

NBN Co CEO Bill Morrow has said that the company will not be under any obligation to use a set amount of the copper network under a renegotiated deal with Telstra.
Written by Josh Taylor, Contributor

NBN Co CEO Bill Morrow has left open the door to a wider fibre to the premises rollout, stating that the renegotiated deal with Telstra for access to the copper network for fibre to the node will not bind NBN Co into using the copper across the board.

Morrow this morning was reluctant to go into detail about the ongoing negotiations between NBN Co and Telstra, which had originally been forecast to wrap up in the middle of this year, but said that under the "multi-technology mix" model, fibre to the premises was still an option for many premises, and the deal with Telstra would be flexible enough to ensure the company is not penalised for choosing fibre over using Telstra's copper for fibre to the node.

"While we're in the middle of these discussions, I can't talk about any of the detail [but] the flexibility [is] for us to be able to deploy whatever technology we think is suitable without any negative consequence," he said.

NBN Co was continuing to work on reducing the cost of rolling out fibre to the premises, and has issued the first full construction contract for the "builld drop" method of rolling out the fibre to the side of each premises in each area for Maitland.

"We're trying to do a lot of different things. We're not giving up fibre to the premises," Morrow said.

NBN Co will be relying on the learnings of the 1,000-node, 200,000 premises-wide fibre to the node trial to inform the company on the costs of rolling out that technology more widely in the rest of the network. Morrow said it would take between six and 12 months before NBN Co would know the cost of rolling out fibre to the node in reality, despite the company relying on forecast costs for the technology in the strategic review.

Greens Senator Scott Ludlam pointed out that in 12 months from today, the company will only have another 12 months to get the network passed out to all Australian premises as per the Coalition election policy.

Morrow clarified that NBN Co's projections state that the company is projecting to complete the rollout in 2019.

Morrow said that a draft version of the company's first corporate plan under the Coalition government is now with the Department of Communications and the Department of Finance, and NBN Co was in the process of preparing its forward schedule for the network rollout.

The CEO revealed his salary at the company to be at the base of AU$2.3 million per year, with potential bonuses for meeting targets putting his salary closer to AU$3 million.

Former Communications Minister Stephen Conroy said that this was one-third higher than former CEO Mike Quigley, who was paid AU$2 million per year, and opted against taking any bonuses.

Morrow said that NBN Co has a number of reviews underway, including into the satellite projects, the use of consultants, and whether NBN Co should be using more cloud services, and whether the cloud should be based in Australia.

In reaction to commentary that NBN Co had passed very few premises in Tasmania in the last six months, NBN Co chief operations officer Greg Adcock said that under NBN Co's old metric of "premises passed" instead of "ready for service", 7,500 premises had been passed in the last 10 weeks in the state.

Adcock also faced criticism from Conroy for appearing in a press conference with Communications Minister Malcolm Turnbull to announce the fibre to the node trial, and comparing favourably the size of an Alcatel Lucent node with a fibre distribution hub that is larger than what NBN Co had been said to typically use.

None of the executives at the hearing could state who had decided to use the larger fibre hub for the comparison.

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