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Fibre to the basement left out of NBN plan to update fibre to the node

2 million premises on FttN will have the opportunity to move to full fibre, but only an additional 400,000 are expected to take it up by the end of the fiscal year 2024.
Written by Chris Duckett, Contributor

Two charismatic gentlemen: Minister Paul Fletcher and NBN CEO Stephen Rue

Image: Chris Duckett/ZDNet

Users of the National Broadband Network (NBN) that live or work within multi-dwelling units can stop being excited about an upgrade path for the near future, as the company's upgrade plans announced on Wednesday morning do not take that technology into account.

"Fibre to the basement is not addressed in this plan, but I assure you regardless of that, the company ... continues to look at ways that all our networks can have greater capability in the future," NBN CEO Stephen Rue told ZDNet.

Speaking to journalists while launching the NBN 2021 corporate plan, Rue said the on-demand upgrade plans were previously planned to begin when NBN became cashflow positive on the other side of 2023, but he would not be drawn on whether it would be to the same scale as its new plan.

"I can't tell you what we would have put forward as our corporate plan if COVID hadn't existed. But I can tell you that with the onset of COVID, there's absolutely no doubt that more people are working from home, and educating, and going to doctors, and have the opportunity to live in different locations around Australia," he told ZDNet.

"We are still looking to, obviously, invest further in the network out of cash flow positive outcomes in the future, but what we are simply doing is bringing forward some of that by borrowing against those future cashflows."

It is expected that the first fibre-to-the-node (FttN) users will be able to order upgrades in the second half of next year.

The corporate plan projects brownfields fibre-to-the-premises (FttP) connections to increase from 900,000 currently to 1.3 million at the end of fiscal year 2024, while FttN will increase to 3.2 million next year from the current 3.1 million, before dropping in FY2024 to 3 million.

Before that time, there will remain 100,000 premises that need "bespoke" connections -- these are premises that require a complex installation, are located within culturally significant areas, or are heritage sites -- with the 2021 corporate plan saying it was "delivering as quickly as possible" the remaining complex connection, but "within relevant constraints", and that the company should have 80% completed by the end of 2020. 

Seven years too late: The missing piece from the Coalition's NBN plan  

The plan also stated that the FttN network would soon be paid for by itself through generating more revenue than it had cost to be built and run.

"It is important to note that NBN Co is not proposing a full-scale overbuild and forced migration of FTTN areas to FTTP," the plan states.

"This on-demand model makes FTTP a cost-effective solution; however, NBN Co will continue its strategy of utilising other suitable technologies where it makes sense to do so."

For the company's much-criticised technology choice program where users pay for upgrades, the company said it will make a number of changes, including instant quotes and bringing an end to charging for a quote.

"The improvements to the program will focus on making it more cost effective including improved pricing by completing builds at lower cost, especially for 'group switches'," it said.

"Customer accessibility will also be improved with a simplified website, instant online quotes, and application fee removal."

Image: NBN

NBN also said in its plan that it would improve the resilience of the network by looking at the use of hybrid generators for fixed-wireless sites, which would help in bushfire situations and reduce carbon emissions. It will also invest in battery backups for hybrid fibre-coaxial areas that are prone to outages due to a loss of mains power, look at redundant links and backup sites for NBN points of interconnect to ensure failover, and have more redundant transit fibre spurs.

Speaking at the National Press Club earlier on Wednesday, Communications Minister Paul Fletcher said the upgrades would increase NBN's internal rate of return from 3.2% to 3.7%.

The minister was also asked to respond on whether a decade of useless and wasteful argument had taken place.

"My response is firstly to make the point that what we're focused on is delivering this project, delivering performance, and we've got the rollout to 99% of the premises in Australia -- we're now at a point where we can move to the next stage," he said.

"So I certainly agree that we've had lots of pretty sterile political arguments.

"What our government is much more interested in is delivering a network that meets the needs of Australians today. We're announcing a step change in that and so, building on, of course, the way the network succeeded, and meeting the needs of Australians particularly through the COVID period.

"I think we'll let the performance of the network and the project do the talking."

Shadow Communications Minister Michelle Rowland said the corporate plan was "nothing short of a disgrace" and failed to provide a new estimate of peak funding, nor provided its debt profile, capital expenditure breakout by technology, nor operating expenditure profile.

"The lack of transparency in this document is nothing short of a cover up designed to conceal unfunded announcements made by Minister Fletcher today," she said.

"The lack of transparency also conceals the new cost blowouts which occurred before these upgrade plans were even announced.

"Labor calls on the Morrison government and NBN Co to release an updated document that does not treat Australian taxpayers as fools."  

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