NBN cost cutting hampered by Telstra deal: Turnbull

NBN Co's deal to pay Telstra to access its duct and pipe infrastructure limits the government's ability to reduce the cost of the fibre-to-the-premises rollout, according to Communications Minister Malcolm Turnbull.
Written by Josh Taylor, Contributor

Australian Communications Minister Malcolm Turnbull has downplayed proposed methods to cut the cost of rolling out fibre to the premises for the National Broadband Network (NBN), saying that any alternative method still sees Telstra paid for its ducts and pits.

As the government waits on the completion of a cost-benefit analysis into Australia's broadband options before it embarks on a planned overhaul of the NBN, there have been a number of proposals put forward to the government on alternative ways to continue to roll out fibre to the premises while cutting down on the cost of the network.

Most notable was the Tasmanian government's proposal to use existing power poles owned by energy supplier Aurora Energy. Recently, many NBN advocates also seized upon a report published by Construction Industry News in late January that said a Western Australian contractor had developed vacuum technology that could reduce the amount of time required to clean Telstra's pits and pipes for remediation for the NBN, and thus reduce the cost of the rollout of fibre to the premises.

The proposal was one that Perth Labor MP Alannah MacTiernan made reference to in a speech to parliament today about proposed consumer protection amendments to the Telecommunications Act. MacTiernan referenced "new cable-laying techniques" developed in Perth that would make the NBN more cost effective.

"This, in my view, will enable us to do a lot more fibre to the premises in a very cost-effective way. It's almost a logical consequence of engaging in a rollout that these new techniques would be developed," she said.

In response, Turnbull said he believed MacTiernan was referring to "micro-trenching technologies", similar to that used by Google for its Fiber project in the United States. Micro-trenching sees small grooves a maximum of 2cm wide and 30cm deep dug into asphalt or the ground for the fibre cable, instead of the traditional 60cm wide, 60cm deep holes.

Turnbull said that such a proposal was hampered by the former Labor government's AU$11 billion deal with Telstra to lease pits and ducts from the telco giant for NBN Co's fibre.

"I can assure the honourable member that both I as the minister, and NBN Co of course even more so, are very aware of that, but one of the things the honourable member should bear in mind is that her colleague Senator Conroy, while the minister, allowed the NBN Co to enter into a comprehensive agreement with Telstra of a take or pay kind, whereby the NBN Co is obliged to use Telstra's ducts or pits, and, if it doesn't use them, doesn't use the nominated vast quantity of them, to pay for them nonetheless," he said.

"So, yes, there are in some areas more cost-effective ways of putting fibre underground, and horizontal drilling and installing new ducts, and they can be taken into account, but the honourable members opposite need to remember that the government is not dealing with a blank sheet of paper here."

However, Turnbull's claim of NBN Co being bound by the Telstra agreement comes as the minister has previously suggested that he is confident Telstra's agreement with NBN Co can be easily and quickly modified to allow for his own preferred NBN alternative plan, which would see Telstra provide access to its copper lines for a fibre-to-the-node network.

In a statement released late on Tuesday night, MacTiernan confirmed that she had been referring to the duct cleaning technology, and said Turnbull was "in the dark" about the technique developed in Perth.

"The new techniques, which use vacuum suction and high pressure hosing to clear blockages in Telstra's pits and ducts, have nothing to do with micro-trenching and are totally consistent with the Telstra contract," she said.

"Either Telstra or NBN Co is keeping this from Minister Turnbull, or he is wilfully ignoring the advances that will slash the costs of delivering fibre to the premises."

Today, Turnbull said the government would soon release maps outlining the best and worst places for broadband in Australia, following a study conducted by the Department of Communications when the Coalition took government in September.

Although he had promised for the Broadband Availability and Quality report to be released by Christmas 2013, the department only released a summary of the report, and admitted that in putting together the report, the department did not test the actual speeds available on individual lines in Australia.

Turnbull has said that the website being put together for the maps would allow users to report feedback on their own broadband experience, and this in turn will be used for NBN Co to determine priority areas.

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