NBN isn't meeting our needs: Victoria

Over 358,000 premises, or roughly 13 per cent of Victorian households and 18 per cent of Victorian businesses, want a fibre-to-the-premises (FttP) broadband connection — but they can't get it right now, according to a new report from Deloitte Economics.

The report (PDF), commissioned by the Victorian Government, also stated that at December 2011, only 1 per cent of households and 3.9 per cent of businesses in Victoria had access to FttP broadband.

According to the report, the delay in the roll-out of the National Broadband Network (NBN), while NBN Co negotiates its facilities-access agreement with Telstra, reduced Deloitte's forecast for the uptake of high-speed broadband, because it is unlikely that alternative infrastructure will be developed while the NBN is underway. This coincides with an increase in unmet demand, as "consumers become increasingly aware of the capabilities of high-speed broadband, but are unable to access top-of-the-line services".

The report noted that unmet demand for what it calls "second-wave" broadband, with speeds of between 8 megabits per second (Mbps) and 50Mbps, is likely to fall during the next four years, as NBN Co rolls out its fixed-wireless and satellite services in regional and remote Australia, which are set to be complete by 2015. While NBN Co has forecasted upgrades to these services in the future to increase speeds beyond 12Mbps, the report stated that the launch of this service would "entrench" the digital divide between metro and regional Australia, although it wouldn't make it worse.

"Carriers have not provided more advanced services to these regions to date, as the relatively fewer potential customers mean infrastructure in regional areas does not make economic sense. Consequently a digital divide has emerged between more and less densely populated areas," the report states. "While the NBN approach entrenches this divide somewhat, the wireless/satellite solution represents a similar proportional increase for these regions as the fibre solution does for regions that already have second wave broadband services."

Given the NBN's importance in ensuring that demand is met for high-speed broadband, the report states that the delay or cancellation of the NBN would have "substantial implications" in the uptake of services.

"Given this importance, any delays in the roll-out or cancellation of the NBN would have substantial implications for these results, with fewer likely subscribers in the two more advanced fixed-broadband categories, and more in the basic broadband categories as demand goes unmet," the report states.

According to NBN Co's three-year roll-out plan, around 30 per cent of Victoria will be covered by the NBN in the next three years, with 691,600 premises to be covered in 98 suburbs, while 70 per cent of the roll-out in Victoria will be in metropolitan areas.

The Victorian Coalition Government seized on the report, with Minister for Technology Gordon Rich-Phillips saying that the NBN has left Victoria "stuck in slow motion" and failing to keep pace with unmet demand.

"Much of this unmet demand is a result of the void created in private-sector broadband investment since the Commonwealth Labor Government decided to build its own broadband network," he said in a statement.

"It's clear the Commonwealth's roll-out plan is not hitting areas where there is strong demand for services, or those areas that would benefit most from adequate services."

Shadow Communications Minister Malcolm Turnbull said that the Coalition will aim to deliver high-speed broadband faster and cheaper than the NBN's roll-out, because a fibre-to-the-node (FttN) network requires less construction work, which makes up the bulk of the cost and the time required for the current NBN plan.

But any changes to the roll-out would be decided after a cost-benefit analysis is conducted. Turnbull has previously indicated that he would halt the NBN construction while this analysis is conducted, but said on Friday that he would keep the project going in the meantime.

Turnbull also said that regional Australia would be better off, with communities of under 1000 premises that miss out on FttP under the current NBN plan potentially to be serviced by FttN instead of fixed-wireless or satellite broadband.

Conroy has said that towns near transit links with under 1000 premises will still be serviced by fibre, while under the Coalition plan no regional towns would be serviced by fibre.