NBN Takeup And The Coalition 'Real Solutions' Broadband Statement

NBN Co has just updated its connection figures for the National Broadband Network (NBN), revealing that as of December 2012 34,500 premises had been connected to actual NBN services. In the same week, the Federal Opposition has released its 'Real Solutions' policy document, which contains some details of its own plans for the future of broadband — a future where the NBN's role is somewhat uncertain. Let's try and make sense of the NBN data and the new Coalition claims.

Networking picture from Shutterstock

The numbers are bound to trigger predictable rhetoric from NBN opponents along the lines of "we've wasted all this money and no-one wants it", while making broadband enthusiasts who aren't connected yet wonder what's holding back all those people who could be on the network but aren't. That's the nature of NBN discussion. But what have we learned this week?

The NBN Numbers

At the end of December 2012, 34,500 people had connected to the NBN. That number is up considerably from June 2012, when the figure was 13,600. The vast majority of those users to date (23,100) are on satellite, which has the advantage of being instantly available to qualified users if they install suitable receivers. By June 2013, NBN Co is predicting those scales will have tipped, with 54,000 fibre connections against 47,700 satellite and wireless connections. But that's a prediction, not a current number. Photo: Lisa Maree Williams/Getty Images

Actual adoption is very different again from potential access. Earlier this month, NBN Co said that it had begun construction in areas with a potential reach of 784,592 premises. By June this year, it is due to have actually passed 286,000 premises — just under 10 times the number of active connections right now. The takeup total will presumably be higher at that point, but it will be a long time before it even approaches 50 per cent at this rate.

In looking at the takeup rates, there's a point worth remembering: the copper network hasn't been switched off yet. While there are speed benefits to moving to an NBN connection, no-one has yet been obliged to make the choice. As we've pointed out before, the NBN isn't compulsory — you can refuse to have it connected. Eventually (assuming the NBN continues in its current form), the copper network will be disconnected and you'll be reliant purely on mobiles or satellite if you don't choose an NBN connection, but we're not at that stage yet. Depending on the politics of the day, we may never get there.

The Coalition Solution

In these discussions, it's always worth remembering that the NBN in current form isn't due to complete its rollout until 2021. That's a long way off, but it does represent a commitment to a specific time frame, with milestones set along the way. If you want to suggest it could be done quicker or more efficiently, you'd need to explain what you'd eliminate, the alternative technologies you'd use and how you would deploy them more quickly. You might hate the NBN on principle as government-funded infrastructure or believe there are better solutions that could be deployed, but it's a major national infrastructure project, which is not something that can be replaced with a one-sentence statement. Photo: Sergio Dionisio/Getty Images

We still haven't yet seen a detailed plan from the Federal Opposition for how it might alter or restrict the NBN. But its 'Real Solutions' policy document launched this week does contain some broad statements on broadband, including the claim that the plan will "deliver broadband faster, sooner and at less expense to taxpayers and consumers than Labor's National Broadband Network". Here is the detailed broadband section from that document:

  • We will for the first time do a fully transparent cost-benefit analysis of the National Broadband Network, to find out the quickest and most cost-efficient way to upgrade broadband to all areas where services are now unavailable or substandard. This is the cost-benefit analysis Labor didn't do before committing to spend tens of billions of dollars on the NBN.
  • We will roll out super-fast broadband using whichever is the most effective and cost efficient technology and we will use existing infrastructure where we can.
  • We will roll it out faster to high priority areas.
  • We will end billions of dollars of wasteful spending on the NBN and deliver more of the modern infrastructure we urgently need while encouraging competition wherever possible to put downward pressure on prices.

The key obvious element that is missing from this statement is any definition of what "substandard" means (or "super-fast"). Is that current ADSL speeds? ADSL2? Without knowing that, it's hard to see how a cost-benefit analysis would work.

We also have no firm commitment on technologies. Ultimately, when you plan a network, you have to pick something specific to deploy. NBN Co has been criticised for using 1GB equipment at fibre endpoints when 10GB would offer faster speeds. But it can only be criticised on that point because it has committed to a specific technology (albeit one which can be upgraded; you can change the endpoint gear without replacing all the fibre).

"We will use existing infrastructure when we can" is an impossibly vague statement. If that means maintaining existing copper networks, then the deal with Telstra to access those pits will have to be renegotiated again. That won't be cheap, and it's certainly hard to see it being cost-effective at this point. What other infrastructure is being proposed? Wireless doesn't scale. Cable deployments are limited and shrinking.

The "billions of dollars of wasteful spending" line appears to be based on the fundamental Coalition assumption that infrastructure spending is best left to the private sector. Some people will agree with that; some won't. However, simply stating that we shouldn't spend money doesn't address any of the evident problems with the existing broadband infrastructure in Australia.

The NBN is a massively expensive undertaking, but it is one that is being funded as an infrastructure investment that is expected to make a return. A statement that wasteful spending will be eliminated is nothing more than an ambit claim. This particular statement doesn't even mention whether fibre-to-the-premises is the favoured Coalition approach, something that has often been suggested as a possible approach. There's also no discussion of how it would wind back existing NBN contracts if it did choose alternative technologies (whatever they are).

Tellingly, this statement doesn't actually suggest that the Coalition would kill the NBN altogether, merely that it would make it more "efficient" in some largely unspecified fashion. That might be helpful for Coalition candidates in areas where broadband is awful and where the NBN is due in the next three years. But if you're going to claim billions of dollars in saving, you really need a lot more detail than we've been offered here. It's hard to compare the 96-page NBN Corporate Plan with a 150-word outline and not have the latter come out looking half-formed.

As for the statement that competition will be encouraged? Our comprehensive Planhacker guide to available options lists close to 400 currently available plans which vary widely in pricing and features. The notion that there isn't competition in the NBN environment already doesn't stand up.

The NBN project deserves close scrutiny and criticism. A common complaint amongst Lifehacker readers is that the selection of deployment areas seems driven as much by political needs (placement in multiple states and in marginal seats). The Coalition document touches on that theme by suggesting that it will service areas of "greatest need", though again there are no metrics specified for that. Does a suburban area stuck on pair gain deserve broadband more than a rural community stuck on satellite? Is it unreasonable to focus on Tasmania (as the NBN did) as an area of evident need?

If experience is any guide, the discussion isn't going to even approach that basic level of sophistication in most quarters. We'll just see more rusted-on arguments about waste, devoid of any recognition of the problems in the current wholesaling system or the inherent limitations of the copper network. Equitable high-speed broadband access is a tough problem to solve, and one where fundamental political philosophies clash unpleasantly with technical and fiscal realities. The devil is in the detail, and we still don't have a lot of that.


Comments

    So out of the 34,500 people connected 23100 roughly 67% are on Satellite. You forgot to mention, highly latent, troublesome for some applications and massively inferior to fibre. Also worth noting that its already available without the NBN! Its not part of the NBN roll out, its being delivered via an arrangement with Optus and IPSTAR with maximum speed of 6Mbps/1Mbps. NBN don't even plan to launch Satellites until 2015 and even then the maximum speed only will be 12Mbps. How about you guys do an article on the REAL differences between Fibre, Satellite and Fixed Wireless. Its extremely misleading to the general public to lump Satellite and Fixed Wireless in with Fibre. I think the average punter would be very surprised to find that currently, over 60% of connected NBN consumers are on inferior technology to fibre. NBN Co needs to stop propping up its numbers by preying on peoples ignorance about the various technologies. I am sure someone will tell me if I am being to critical.

      What I cant seem to understand/find an answer for is why they are being so slow to actually roll out the fibre. From what I have read, the are using the existing telstra pits to physically run the the cabling, ergo; little need for major excavation works. So what gives?

      Anyone got any info as why this is?

        For @tuxedoglenny: the stated plan has always been to do a quite slow rollout initially (to test systems and procedures) and then speed up rapidly. When the initial plans were being set, Telstra hadn't signed over its pits, so quite a lot of work was needed on some early sites. You also need suitably qualified staff for the rollout. All potential sources of delay (which doesn't mean what we have is the most efficient model at all; what I'd like to see is specific plans for alternatives).

        Large amounts of Telstra's urban pit and pipe is totally inadequate. Ducts/pipes full of cables/tree roots.Tiny old pits and bends that will not house fibre. New estates no worries ... older well established areas ... big problems.
        Ex-Telstra Liney and former NBN contractor

      A few misapprehensions here: yes, the satellite services are interim solutions, but it's not accurate to say they're "not part of the NBN rollout" -- it was always presented as a mixture of (mostly) fibre with satellite and wireless in areas where that didn't make economic sense. I don''t think most Lifehacker readers would assume that satellite and fibre were equivalent -- there's certainly room for a more detailed feature on that point though.

        Sorry Angus, I disagree. I don't consider reselling existing technology from Optus and IPSTAR as part of the NBN Roll Out. Is it not true that consumers could already subscribe to these services without the NBN. It's not like they have deployed any new infrastructure to provision Satellite to these consumers. I accept your point the most Lifehacker readers would be aware of the differences but my post referred specifically to the "..general public". Do you really think that the average consumer realises the difference? Surely you can see how including these numbers could be viewed as misleading given the broader audience they are being published to.

          @somers, your totally wrong, the interim satellite service is not the same as the satellite services that were already offered - the big difference is that the services offered by the NBN are much faster than what was previously available.

          Its true that they are using the existing satellites but what you've failed to mention is that the Government has actually purchased more bandwidth from the satellite operators which is why service providers are now able to offer a much faster service than before. Its only a short-term solution (it won't work in the long term), but it is a very clever way to increase internet speeds in remote communities right now. So far, from all accounts, its been very successful.

          See this fact sheet (which explains in very broad terms how it works) if you don't believe me http://www.nbnco.com.au/assets/documents/nbn-satellite-factsheet.pdf

          @Angus Kidman - as a side note, it would be interesting to see lifehacker or gizmodo do a short article explaining how the NBN's interim satellite service is able to offer better speeds. I'm sure the Somers' of the world would appreciate it (or not, if they're just trying to push an agenda).

            @anguskidman - as a side note, it would be interesting to see lifehacker or gizmodo do a short article explaining how the NBN's interim satellite service is able to offer better speeds. I'm sure the Somers' of the world would appreciate it (or not, if they're just trying to push an agenda).

              Well, not totally wrong. But, wrong just the same. It would appear that previous offerings were available at 4Mbps/1Mpbs. As stated the NBN current offering is 6Mbps/1Mbps. Not exactly what I would call ".. much faster", but hey I guess it is faster. The point is that whether we are talking 4Mbps or 6Mbps or eventually 12Mbps, they are still massively inferior to Fibre at potentially 100Mbps. Obviously this is best effort given the technology available and I appreciate that but the benefits of the NBN FTTP discussed in a broader context do not necessarily apply to Satellite or Fixed Wireless. Anyway thanks for your input, you are correct I would appreciate an article clearly explaining the differences/capabilities of the various NBN connecting technologies. I guess you could say that is my agenda. Yours is pretty clear!

              Last edited 30/01/13 9:09 am

    "We will for the first time do a fully transparent cost-benefit analysis of the National Broadband Network, to find out the quickest and most cost-efficient way to upgrade broadband to all areas where services are now unavailable or substandard."

    The idea is that the NBN will bw replacing all internet technology, thus making it all "substandard"...

    My understanding is that that want to reintroduce a brand new up-front one time engineering component, delaying any future rollouts by years. And the major component going forward is labour and training, both of which are finite, and would need to be equally managed by both approaches. FTTN also being administration heavy "Can I cut your phone line in half", "not this week, we need it for this that or the other reason". In return most people will get a service that is not much better than current ADSL2+ speeds.
    http://nbnmyths.wordpress.com/why-not-fttn/

    There are a number of "greenfields" estates around the country which are still waiting for their NBN connection, some more than 6 months after moving in. It's tricky for residents when they can't fall back on a copper connection.

    http://the-riotact.com/nbn-woes-for-watson-residents/93171

      I question your assertion that there are "a number" of sites having this problem. Also, you are misrepresenting the facts about this particular instance. From my reading, this is affecting one street in an entire suburb which really should have been mentioned in your post.

    My NBN plan is the best, basically they start at my house, then do the rest.

    "We will end billions of dollars of wasteful spending on the NBN and deliver more of the modern infrastructure we urgently need while encouraging competition wherever possible to put downward pressure on prices."

    Translates to:

    Fibre for Metro and easy to implement areas only. Let 'competition' lop ten percent or so off the price of rural and suburban residents having to pay for the upgrade themselves.

    I think my existing ADSL2 speeds of 5-8Mbps is too slow. I can't wait to get a 100Mbps connection. Most general public people do know that satellite Internet is quite slow compared to the speed of light with optical fibre.. I pity the poor people if the Liberals get in and the NBN is reduced to less than ADSL2 speeds.

      Why is ADSL2 too slow? It's a helluva lot faster than my 3G connection and that is well fast enough for me. As long as I can watch a Youtube video without it stopping to cache all the time, I reckon that's more than adequate. I wish it was a lot more reliable but it is plenty fast enough when it's working.

        saying "that's all i need" is pretty short sighted, it's like having a fridge and a tv and saying, well, that's all the electricity i need. if we have massive connections then we will easily find uses for them, and that's not just for business.

        The Cloud! The Cloud!

        I have so many customers wanting to move into the cloud or even a private cloud and there are massive issue with current speeds. ADSL 2+ doesn't cut it when an office of 20+ people want to operate remotely, the upload bandwidth is way too low. So they have to resort to Ethernet over Copper which starts around the $600 mark a month for a 10/10 connection. When the NBN hits they will have a 100/40 connection for $100-150.

        Oh and saying that its only viable for business and should only be run to commercial areas needs to look at how many people operate a business from their residential address.

        " I wish it was a lot more reliable "

    I dont understand why people would opt out. The fibre to the house is just another one of those things going to the house just like water, electricity or the copper telephone line or even roads!. Why is there such a big deal about fibre, I am sure there wasnt this much hulabaloo when water, electricity or telephone was connected to everybodies house.

    Angus - so now you're interested in a cost benefit - "it’s hard to see how a cost-benefit analysis would work". What has changed ? Have you been to a "real world reality" conference lately ?

    Well at least all of those Telstra shares you have are heading north at a great rate.

    So have you started sucking up to Malcolm Turnbull yet or are you still going to rely on that clown Conroy for all of your views and opinions ?

      My point is that there are no parameters for how that proposed analysis would work: if we haven't set what a minimum speed is, for example, we can't even work out where the "benefit" side of the equation starts to apply. I own no Telstra shares, and I'm not sucking up to anyone. Insulting me (or Conroy) is no substitute for a reasoned argument or a detailed plan. You're certainly not supplying the former, and the Coalition is not yet supplying the latter.

        A reasoned argument ? you mean the one that goes something like " lets just build the NBN and we'll worry about the numbers on how the taxpayer and the community will benefit after that". You seem to be forgetting that the government who have signed off on spending this money have not supplied a cost benefit. In my business and most others, you do the cost benefit before you spend the money - not after - it is of course a bit late then !!

        I'd suggest you spend more time worrying about the business case that the Labor party are promoting rather than what the Coalition are proposing - after all its the Labor party that are wasting the money, the Coalition are just proposing to limit the waste.

        And in terms of insults, I seem to recall being called a "troll" and "clueless" by your good self in the past when I've dared to question your Conroy apologist views so please don't lecture me on insults. How about you use your knowledge of this area to provide a balanced and objective view of the technology and leave the analysis of the economic benefit to someone who understands something about paying the bill.

          The problem with the Coalitions proposal is there are no details as what they will deliver. promising to fix substandard speeds is pointless if they do not define substandard speeds. If they consider ADSL 1 a decent speed then they surely have no clue about IT needs of small businesses. Large businesses can afford the links required to operate. Small businesses can't and anything that provides a much faster service will benefit those businesses.

          So many people are either moving to the Cloud or wanting to have remote workers log in to their local network. Something that's painfully slow on even ADSL 2+. Bump those businesses up in speed dramatically and their remote workers become more efficient.

          The price difference to small businesses between a high speed NBN plan 100/40 and a Ethernet over Copper link that's say 40/40 is almost enough to hire one more staff member part time. Which situation would be better for that business and the employment rate.

            And the problem with Labor's proposal is that they are spending $40 billion dollars of our money on something that they have not been able to calculate or justify the economic benefit. If they can show show spending $40 billion dollars will return $40 billion to the economy in a reasonable timeframe then by all means spend the money. Everyone all over the world wants faster speeds - that's a no brainer - but if spending the money doesn't produce money saving efficiencies or create a net increase in jobs then why is this government spending the money ?? To download movies faster ? To get Facebook updates faster ? To send / receive emails faster ? Really ? Is lightning speed Internet to the outback going to generate more work out there ? Is HP and Amazon and Google going to locate their newest data centres in Far North Queensland or the Kimberley ? Or perhaps Infosys, Wipro and Samsung are going to form a partnership and move to Alice Springs bringing all of their technological expertise to the Australian outback. Really ? Or just maybe the NBN is going to allow everyone to download movies a lot faster and watch IPTV - now that I can believe.

          A reasoned argument ? you mean the one that goes something like " lets just build the NBN and we'll worry about the numbers on how the taxpayer and the community will benefit after that".

          Have you read the corporate plan, where it shows how they plan to pay back the taxpayers with interest?

          Have you read the Coalition statement, where it shows all of their financial details? Wait, no, nobody has, because there are no financial details.

          In my business and most others

          The government is not a business. It is not standard procedure to have the PC perform a cost-benefit analysis on every policy; there are dozens of tools (and philosophies) for analysing and designing policies, and a CBA is only used in certain circumstances.

          The current policy aims to dramatically improve services while ensuring that the taxpayer gets a small return on investment. Which part needs a cost-benefit analysis? It simply isn't a "throw money at X and hope something happens" policy. If you think it is, you ought to do more research before commenting.

            So Gene where did you study economics - perhaps under tutelage of the US government policy makers ? Or perhaps you're from Athens ? Ireland, Spain ?? Perhaps the Australian governments should adopt their policies of spend spend spend and let our children worry about the trillion dollar deficits and paying the money back.

            If you think that a CBA is not required here then you are in la la land. The justification for payback to the taxpayer is based on flimsy and optimistic figures at best. How has the takeup been so far ? There is no choice here - the copper is going and the taxpayer has funded that. Why ? To make the NBN successful - there is no competition. Why ?

              I...won't comment on your first paragraph.

              If you think that a CBA is not required here then you are in la la land.

              If you think a CBA is required here then you ought to explain why. "Because billions" has been the explanation from the Coalition, but that is not an explanation. As a fun exercise, look up all the billion-dollar-plus policies from the Howard era. Try and find a CBA for each of them. Good luck.

              The justification for payback to the taxpayer is based on flimsy and optimistic figures at best.

              Then the logical solution is to correct the figures in the corporate plan (and no, you don't use a CBA to do this). You don't just go "oh, this seems flimsy, let's assume 100% losses and do a CBA to see if it's worth it".

              How has the takeup been so far ?

              Excellent - north of 40% in the older rollout areas, and takeup of the 100Mbps services exceeded predictions. The Coalition loves to focus on the newest areas where people haven't decided to sign up yet. This may shock you, but nobody actually expected the entire population to switch overnight, and that doesn't happen anywhere. Ever. For any service.

              There is no choice here - the copper is going and the taxpayer has funded that.

              Oh, only the choice of 400+ plans from dozens of ISPs. Practically nothing, eh?

              Taxpayer money took away my dirt road too, but I'm quite happy with the sealed road I have now. Technically, the taxpayer has provided capital, and hasn't been "funded" the way you "fund" an orphanage that runs permanently at a loss.

              I will also note that I do not have a choice of which water or sewage service I want, or which bus service or which train service or which gas service or which electricity service (except at the retail level). I currently have no choice of which telecommunications infrastructure either (it's Telstra copper connecting to Telstra ports only).

              To make the NBN successful - there is no competition.

              To make the water service successful, there is no competition. To make the power service successful, there is no (infrastructure) competition. To make roads successful, there is no road competition. To make rail successful, there is no rail competition.

              Should I go on? You may have observed a pattern here. When you have an essential service that's very expensive to provide (capex and opex), you generally have to make it a monopoly for it to work. This is called a natural monopoly, and your economics textbooks should be able to explain why.

              Surprisingly, the Coalition policy actually doesn't improve on many of the points that they criticised. A monopoly will still exist for fixed line telecoms in most areas (it has to, although they can't admit this), and (boldly assuming they actually do FTTN) your old copper lines will be forcibly re-terminated at a cabinet whether you want it or not. The taxpayers will still provide significant amounts in capital, etc. We just end up with worse services for the same monthly cost.

          Again: no reasoned argument here and no discussion of specifics, just bluster and insults. As a guest commenter, I can't readily check what I may have called you in the past, but if you made comments along these lines, I'd have no hesitation calling you a troll.

            Rather a troll with an opinion based on reality than being a blind Conroy apologist. Its just incredible that you are unable to understand that economic reality is what this argument is about. Go and get some life experience.

              I don't see an opinion based on reality in your comments. I just see your ideological and political bias. The cost benefit argument has been FUD'd to death. You're just repeating old mistruths and trying to rehash old discredited arguments. Why don't you demand detailed policy from the alternative government and make an objective comparison between the two policies instead of your lame attacks on the current NBN plan?

    we as farmers living between tamworth and armidale would just love to have an internet access other than dial up!!!! were not in the simpson desert 10ks off the new england highway..!! its a joke.....satilite they say....jamb the lot of you I say!!!!!

    @Angus - props for being actively involved in the discussion, we'd like to see this from writers more often.

    +1

    I can't wait for NBN - I've always had adsl at about 3.5 kms from exchange in a capital city which is good but not great (line speeds change after lots of rain etc). Liberals are not interested in me and I doubt I'd be seeing anything change if it wasn't for the nbn plan. If nothing else I'm glad labour raised the questions that tech circles had been complaining about for ages - i.e. why are we as a developed nation so far behind?

    >We will roll it out faster to high priority areas
    256/56 (kB)
    Totally, I mean the suburb over has 20mB/s and they got it, but we ain't gonna get it for another five years... (Not saying that we are priority over dial-up and Satellite users, they should get first, but not people with more than enough connection already)

      >We will roll it out faster to high priority areas

      What sort of vague promise is that?
      Take care.........
      Paul Simon's words in The Boxer A pocket full of mumbles such are promises.
      could apply to everything MT says.
      And All lies and jests, Still a man hears what he wants to hear and disregards the rest applies to how we keep on believing these politicians even when we know they are lying to us.
      The NBN is in hand - it's happening now; and A bird in the hand is worth two in the bush.

    I was talking to someone the other day, and we finally rolled around to internet access and the NBN, yes apparently they are rolling out NBN in remote areas first, but the reason for the slow take up is the fact that that's the way they chose to roll it out. Roll it out in areas where there is a general lack of internet take up and wonder why it isn't being flooded. Now I'll probably never get access to the NBN due to renting, but it'd be nice to be able to access the internet without paying huge fees for what should be considered utilities along the lines of water and power.

    if there is going to be a CBA, it should just be from a survey with questions like,
    would you sign up to to the NBN when it's rolled out?
    are you currently in a service contact with your current ISP?
    etc.

    then you can plan the roll out avoiding areas with little or no interest from being the first area connected.

    make a push for phone line replacement service being cheaper than the current.
    then it will be seen as a telecommunications replacement instead of its Internet only view it currently has.

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