Six Myths About The NBN You Should Stop Believing Right Now

Six Myths About The NBN You Should Stop Believing Right Now

I live blogged the launch of the 2012-2015 NBN Corporate plan for Gizmodo yesterday (Giz editor Luke was trapped on a secret mission with a camera which may or may not have involved underwear, so I stepped in). The big takeaway from the event? Cogent dismissals of six persistent NBN myths which I suspect most Lifehacker readers already know are utter rubbish, but which keep clouding the actual discourse about our broadband future. Let’s review.

If you want the full details of what was announced, check out the whole Gizmodo feature, which covers all the notable comments from comms minister Sentator Stephen Conroy and NBNCo chief Mike Quigley. Predictably, most of the coverage of the corporate plan launch I’ve seen to date has focused on the increase in NBN costings, though rather less of that reportage has noted with the same prominence that the predicted rate of return as an investment from the NBN has increased.

But I’m not going there, because arguing solely over the costs ignores all the other issues. If you want “Aaargh the NBN is evil and overpriced” coverage, you have most of the mainstream press at your disposal already. And I’m not going into the whole fibre versus wireless debate either, because we’ve already covered that a number of times.

Myth #1: No-one wants higher speeds

A standard anti-NBN trope is that “the speeds we have now are more than adequate”. That approach ignores all the statistical evidence, which clearly shows our appetite for both download speeds and data allowances is ever-increasing even without the NBN. It also ignores the NBN signup patterns, which show the strongest demand is on the 100/40 and 25/5 plans. NBNCo is still conservatively assuming most customers will use the slower 12/1 option, but that prediction is likely to err on the wrong side. A similar pattern is evident with even the slower satellite services, as Quigley noted: “We’re seeing takeup of the interim satellite is in fact exceeding what we expected at this point in time because the service is such an improvement over what we’ve seen beforehand.”

Myth #2: Consumers hate the NBN because they may not be able to make emergency phone calls

The question of whether ‘battery backup units’, which ensure you can make a call on your landline in a blackout, should be compulsory has been much debated in the press. Given the total saturation of mobile phones, it’s questionable whether this is a drama. More to the point, when NBNCo has asked current customers if they want a battery backup in their home, few say yes once they realise that their current cordless home phone will be dead in a blackout no matter what the network is doing. As Quigley said: “When people understand, they say ‘but I’ve got a phone over here, is it good for that?’ and it’s a cordless phone. There’s not much point backing up a cordless phone.”

Myth #3: Money spent on the NBN should be spent on roads, etc.

Because the NBN is an infrastructure investment which takes place over a decade, its total cost is an easy target. If you don’t like the NBN (or you don’t like the current government), suggesting that spending the money elsewhere would make more sense is an obvious ploy. But it’s not a logical ploy, because the NBN is treated as an investment, not a one-off expenditure. As Conroy pointed out, yet again: “To treat it as an expense would be breaching international accounting standards.” You can’t just shift the money from ‘NBN’ to ‘roads’ or ‘hospitals’, because the latter require a different accounting treatment.

Myth #4: NBN plans are overpriced compared to ADSL

The really short version? I compile and update Lifehacker’s Planhacker listings for the NBN, so I know this is total rubbish. There are NBN plans available at a wide range of price points. And that’s before you remember that comparisons of basic prices often ignore the fact ADSL prices require you to pay for a landline, and that the NBN, unlike ADSL, can offer a guaranteed speed.

That doesn’t stop the myth being perpetuated. As Conroy pointed out, Tony Abbott’s budget reply speech suggested a typical NBN plan would cost three times as much as current offerings. That’s not true even if you ignore the speed and performance difference. And when you consider that with recent price rises, basic line rental from Telstra can cost less than an NBN plan, it’s a lousy, deceptive and pointless line of argument.

Myth #5: You will be forced to use the NBN

Yes, your copper cable will eventually die (unless you live in a satellite-only area). But if you don’t want the NBN connected to your house, you can take your chances with 3G or a rival satellite service. Even when NBNCo is wiring up your street, you can decline the option to have a basic connection enabled for your house for future use. Annoyingly, if you live in a unit block, if enough of your neighbours are misinformed anti-NBN zealots, they can disconnect your block altogether. As Senator Conroy noted: “If the strata says no, we declare it ‘frustrated’ and we move on. We can’t storm the building. We still have property rights in Australia.” If my neighbours try this, I will move, and curse my lowered property values.

Myth #6: Mainstream NBN coverage is objective and balanced

If I ever doubted that much of the local media coverage of the NBN was predisposed to negative bias, five minutes in the room ahead of the announcement were enough to dispel that notion. One journalist from the alleged national paper might has well have been wearing an ‘NBN Sucks’ T-shirt. As soon as the press release was handed out, she complained: “This can’t be the plan, can it? Three pages?” (We got handed the full printed plan as well.) Another financial press journalist was phoning in the increase in the overall costs from the press release, ignoring the statements in the same document about how pricing had largely changed due to delays in the deal with Telstra and the addition of Optus cable customers.

It’s not that the cost isn’t important, but it’s boring and simplistic to say “This costs too much and therefore it sucks” without looking at the context. As Senator Conroy pointed out and we’ve already noted, the incessant mantra that money spent on the NBN could be easily redeployed to roads or health or education or your cause du jour ignores the realities of how different expenditures are accounted for, let alone ignoring the fact that not changing Telstra’s monopoly control on the existing copper network would leave large swathes of the population permanently screwed. Ultimately, we don’t have a fully-priced alternative to the NBN from the Opposition, and it was the Opposition in power that ‘privatised’ Telstra while giving it near-monopoly control over the copper network. Under those circumstances, giving random statements from Malcolm Turnbull or Tony Abbott equal weight with a fully-costed plan is not balanced journalism.


  • Sorry, but Myth 3 is bullshit. Investment or not, money is being spent on the NBN. You are arguing that it doesn’t actually cost money because of creative accounting, which is total rubbish. It still costs money, and that money could be spent elsewhere and saying that isn’t logical doesn’t fly. Now it is fine for everyone to have an opinion on whether the money could be spent better here or there, but pretending it doesn’t cost money to back up your argument isn’t right.

      • reevo, it doesn’t cost money for the same reason a rental property doesn’t cost money. If the income equals the cost of borrowing it… doesn’t cost money. In the case of the NBN the return is expected to be 7.01% and the cost of the borrowing are currently LESS then 3%. It’s not fancy accounting, it’s basic Income VS expenditure. NOT building the NBN costs 4% LOL, and that 4% could build some roads and hospitals if you wanted to direct it that way (although why we need more roads when the sustainable move is to drive less I’m not sure…)

          • He doesnt need to be an accountant to make a valid economics point. I dont see any flaw in his argument. Please explain why a certified accountancy degree is required and what is wrong with this arguement.

            To me it looks like you are going “haha he is saying things i dont understand, I better laugh at him to feel better about myself”

      • No one is arguing it won’t cost money. The distinction is whether it’s a cost with no return or an investment that will generate a return in the future. The financial distinction is real not least because it has a direct impact on the future availability of revenues to distribute. If you were a small business and had 1000 bucks to spend on a new front desk vs a machine that churned out widgets for you to sell it’s a very different debate than if you were looking at a new desk vs new signage.

        • I’m an investor, here’s how to work out the true return (there’s no crystal ball stuff in this formula):

          Cash on Cash Return = (Income – Expenses / your outlay) x 100

          The result will tell you how much cash (as a percentage) is returned from your initial outlay. Remember to include all the ongoing expenses, ie interest payments, fees, etc. Your outlay is for the non-borrowed cash used to start the deal. Compare the return with what you’d get if your outlay was simply kept in the bank.

      • Actually, not everything Angus said is correct. As much as I am all in for the NBN, prices ARE still a lot higher, and his comment that states ADSL requires you to pay for a landline is entirely incorrect -I’ve had naked DSL for years now.

        • There’s a clear difference between standard ADSL and naked DSL (as noted earlier in these comments). And there are NBN plans that are cheaper than ADSL plans with less generous data allowances, leaving aside the speed difference and reliability (both important points in a proper comparison). If you want to claim “prices ARE still a lot higher”, cite some specific examples.

        • Yep, as an engineer I design, build and assess capital investment business case options for a range of technologies and other assets for my employer. My payback standard is a minimum 15% return on investment just to be shortlisted against other competing capital projects for the company’s limited capital budget.

          I don’t get to keep my job if the projects do not deliver the return I promised. Politicians, on the other hand, work in a different world.

          For a Polly, 7.0% ROI for the NBN is apparently quite acceptable, somehow increasing to a greed inspiring 7.1% given recently announced long delays and significantly increased costs (Now there’s some creative accounting for you unless they made a noobie mistake and overlooked a large lump of income).

          And just to be 100% clear, there are no released business cases supporting the 7.0% or 7.1% return. There is only a Polly promise (core or non-core anyone?). There have been no independent business case audits and no independent checks by the productivity commission.

          So I call foul on debunking myth No.4 as it is presently unproven. The various range of price points apparent right now may be good compared to the alternatives, but when we are all forced onto to NBN, monopoly business rules will apply! I predict that when the next group of pollies get elected, they will say oh no the cupboard is is bare! We have no choice but to charge you suckers more!

          Only the audit of the business case will be proof that this will not happen. I for one will not believe the approx 7% ROI claims until a full independent audit has been done.

    • I think the basic argument for myth 3 is that unlike the Luddites on the Liberal side of politics most of us actually do consider fibre broadband investment as important as infrastructure such as roads etc….basically because the future is geared towards the digital economy…if you do it now it costs less and takes less time and in 20 years when we say oh this was actually a pretty good investment we’ll see who has egg on his face

      • Frank I think you will find the liberals do support a fibre network but just do not support a fibre network being rolled out to such remove and small communities upfront as it costs a lot more… they believe the major cities should be higher priority and remote areas could at least get wireless which is allot faster to deploy and much cheaper… over time FC could be deployed as needed in more remote areas and as our cities are online and account for the vast majority of the population.. If I want fast Internet, more secure power supply, cheaper shopping prices I would NOT move to a remote location this is economics 101 in my mind!

        • The Coalition does have the odd National Party member in it. I would love to hear Barnaby explain to his constituents that the NBN is being rolled out to cities first, and they might get it later if it pays off.

        • That’s a reasonable position – and I think you’ll find Labor agrees. That’s why the NBN is being rolled out to 93% of the population, and not 100%, with the remainder served by wireless and satellite.

          But if the only difference in policies was the percentage of the roll-out, then why is the Opposition pushing fibre to the node instead of to the home? Why is Hockey pushing wireless everywhere, saying “nobody wants a long cable dragging behind their car”? Why are they saying it should be built privately instead of by government investment?

          Remember, it wasn’t Labor who rebuffed Telstra’s 2006 proposal to privately build an FTTN network. Perhaps the proposed $85/month wholesale costs had something to do with that.

        • The NBN is infrastructure designed to increase Australia’s productivity as measured against the rest of the world. The Liberal option is designed to increase Australia’s wealthy or city dwellers’ productivity as measured against the rest of Australia.

          • Yes this project should be about ” Australia’s productivity as measured against the rest of the world.” – let’s get to first principles before deciding (and debating) details of the implementation.

            If one premises goes without the benefits of the NBN for one year lets define the lost productivity as a “premises-year”. If the NBN takes a decade to connect 10 million premises (i.e. it meets the projections in its rollout plan) the lost productivity to the nation would be 450 million premises-years. It’s basic arithmetic. Is there a better way forward?

    • It’s not bullshit because it is an investment, in that it will provide a return of (if my brain is not failing me right now) around 7%.

      If they were to spend that money on roads, which usually do not provide a return (unless they are totally overpriced toll roads; I’m looking at you citylink) then calling it an investment would be bullshit as that would be classed as expenditure.

    • @the “creative accounting practices” you refer to are basically that NBN Co has to pay back the money to the government. You can spend the money anywhere else you want, but we arent getting it back then.

    • Myth #3 really isn’t set out well above. Maybe it makes sense to NBN geeks, or accountants, but speaking as someone who is neither, it doesn’t make sense at all.

    • The money being spent on building the NBN is borrowed by NBN Co. from the government, specifically for the purpose. Think of it as a business taking out a loan from the bank, except the business is NBN Co. and the bank is the Australian taxpayer.

      There is almost no institution that will lend you money for one purpose, and then allow you to use it for another, hence it is incontrovertibly true that the money cannot be used for other purposes. The only possible avenue for argument is that the government could have lent that money to another project instead – but that argument fails by the fact that it’s a government. It not only has the money, it controls it through monetary policy. If it were necessary to create more money to finance other critical projects, it could (and suffer the consequences, etc. but that’s starting to get way off topic).

    • The NBN Co is a company, that is employed to make money and reinvest in its self and not to give it away to share holders. Ultimatly the longer the company continues to roll out the more proffitable it will be and the lower the cost to the Government!!!!

    • He’s not saying it doesn’t cost money, he’s saying that it’s an investment against future returns, basically that the government will recoup the investment (through subscriptions or privatizing the network). He compares that to spending money on a road, what he calls a ‘one-off’ cost. It really is a different type of spending because the money should come back again without the government having to reclaim it through taxation which is what they have to do when they spend on roads etc.

  • @reevo
    There actually is a difference between investment and expenditure. If you spend money on a road, (unless it is a toll road), that is an expense because you aren’t getting an income from it. If you spent it on the NBN it is investment because you are buying an asset that produces an income stream. The $37B spent on the NBN gives the government an ROI of 7.1%. Spending the same on roads gives no direct return.

  • After South Australia spent 600mil (and the rest when it gets announced) on moving a football stadium, the cost of the NBN seems like a bargain 😉

    • I think this is our problem, our governments are so waist full and the issue is like comments above we put things into comparison which we should not really be doing… I could not agree more though in comparison it’s looking ok BUT that comparison should not be possible and we are comparing something that is ridiculous and they should have not waisted so much on so people start to justify a complete over expenditure to another and start to think it’s not toooo bad. The more I read the more I’m starting to love Campbell Newman in QLD… whole of Australia needs people like him to try and stop all this wastage and lets get things back into context and get a better value of money as governments clearly have no idea on what things should cost and it’s costing the people and this is something they do not understand its’ nto there money it’s ours!

      • But it -IS- their money. It was collected from the taxpayer fair and square through purpose-designed mechanisms otherwise known as taxation. Once the money is in their hands it is their right to spend it according to the political mandate given to them by the democratic process.

      • Before you give in to your feelings for Emperor Campbell, try googling “newman bike scheme” or “clem jonees tunnel” and see if you still think he understands how to not waste money.

        • Both of those instances typify Liberal tax spending policy. They have no problem raiding the public coffers for ill thought out schemes that enrich private companies or their friends, but would rather slit their wrists than return any of that money to the tax payers in actual value. Because evidently giving us back services for the money we give them is “welfare”.

          For the record, I live in Brisbane and I can count on one hand the few times I’ve seen anyone hire a bike and years after opening up the Clem Jones they are STILL advertising it on the radio trying to get people to use it. Both programs are colossal disasters, but certain developers and buisinessmen are making out like bandits due to Campbell Newmans’ largess.

  • So it’s balanced journalism you’re after, eh? Using terms like “anti-NBN zealots”? There are serious questions to be asked concerning this whole endeavour and cost is the major one. The costs are already increasing – nobody can write off several billion dollars as insignificant – and in the end Muggins McTaxpayer ends up wearing it whether they like it or not. To make out that anyone who has an issue with this project as being gullible, deluded or under the impression of some “myths” does your arguments and this otherwise excellent site a disservice.

    • The whole point of a tax system is to get money from the general public in order to pay for things that are beneficial to the country as a whole. If there was no need for taxpayers to fund government projects then we wouldn’t need to pay tax. It’s not like the tax you pay has increased because of the NBN.

      Everybody keeps going on about the cost, but nobody seems to understand that Australia is a damn big place, and that any major nationwide infrastructure project is going to be expensive.

    • I disagree with your statement “There are serious questions to be asked concerning this whole endeavour and cost is the major one.”

      These are not serious questions because they are framed to disguise actual fact in order to highlight a narrative that supports their own skew.
      The trouble is that the facts are so totally and utterly distorted by those who are opposed to the network, that when this bias is pointed out it makes one look like they are some kind of NBN fanboy that has no objectivity.

      The name calling is a little childish but given the complete polarization of opinions, its not entirely surprising… You Jerk! 😉

    • Your concerned about $3.7B/year cost to roll it out? Will you also complain about the $2.6B/year paid into the federal coffers each year once it’s built? or the $100B or so once the network is sold?

      The federal government sold Telstra the Copper PSTN network including the pits and conduits and exchange buildings for $65b. The government is now buying it and the HFC network back for $11. One 6th what it was paid for it.

  • A largely “techie” audience is not going to be all that concerned about this stuff , but where exactly are the numbers that justify a government investing this amount of “public” money into a speculative endeavour such as this. Instead of worrying about the “myths” how about a couple of facts.

    1. Public money is paying for this
    2. By the government’s own admission there is no business case that adds up – that is why they had to legislate to decommission the copper and various other things. How much did they pay Telstra again ??
    3. This program must be profitable as it is going to be sold to “private industry” – no-one is going to pay a reasonable amount for a “business” that is loosing money and will hardly be state of the art by the time the sale is negotiated. Blind freddy knows what’s going to happen when the details of the sale are released
    4. Senator Conroy was a Union official and is possibly the dumbest politician to ever have held the Telecommunications Ministry
    5. The technology will be outdated in world terms by the time its ready to sell
    6. There is no business case ! The numbers just dont add up and an extraordinary amount of public money will be wasted

    • I shouldn’t feed the trolls, but . . .

      1. Indeed it is. No secret there.
      2. Legislation to decommission the copper was because Telstra wouldn’t negotiate to sell/allow access.
      3. Not sure what “point” you’re making here.
      4. It’s not been the “telecommunications” ministry for a very long time.
      5. How so, exactly? (And how would you propose keeping copper competitive as an alternative . . )
      6. Which numbers don’t add up, exactly?

      • Let me assist and explain on your questions…
        3. This is a considerable point, the NBN is set to be sold off as a business but yet no business case has been done or looked into which is crazy for any business venture looking at selling to the private sector.
        4. I think the point made is we are rolling out an outdated 100mbps network when other countries already have access to 1Gbps Fibre networks, our network is still over 10 years away yet we are rolling out a network which is 10x slower to todays standards already yet alone 10 years away which will most likely be 10Gbps which is already in use internally in many business.
        6. The numbers that do not exist, the details they have not published (due to not doing a business case and a proper job)

        • I really do think they need to add a new myth to the list: That the network will be outdated before its finished”

          The fibre itself doesn’t determine the speed, the equipment at each end does, replace that equipment and the speed goes up, it’s as simple as that.

          By laying fibre to the home we are in a sense future proofing the network, as it is currently the fastest and most scalable cable humans can produce.

          • Why don’t people understand that it is Fibre….it WILL be able to do 1 Gbps…

            And yes, many businesses have 10 Gig and up…and you know how they do that?? With effing FIBRE networks!! The very same that will be run to every house…ffs

          • You are missing the point people… the point being made is not that the cable is not fast enough but the equipment being rolled out should be 10Gbs, so it is true when they say the network will be outdated before it’s finished… other countries have 10Gbs and rolling it out but we are currently rolling out 1Gbs that’s the point being made.. NOT that the cable back end is the issue but the equipment should be 10Gbps and offered upfront!

          • Finally someone commenting that actually knows what they’re talking about.

            Google Fibre are currently laying the same fibre technology in America. Do you think they would be laying something that would outdate so soon. Fibre will reach speeds of well over 100Gb per second in the near future. The current proposed speeds use a fraction of the actual fibre.
            The fibre is the highway and the cars will continue to get faster.

          • Please read and try to understand and stop trying to take every thing on the defensive… it’s true the network will be slow 1Gbps… it has not been said the CABLE is the issue but the NETWORK… I don’t like being an ass but when you are as per above “finally someone commenting that actually knows……etc”

            I think it’s time you try to understand yourself what is being said and stop reading what you want to read as many are… what has been stated is 100% accurate and a very fair point! Nothing wrong with the FC cable but the question is about the equipment/hardware.

          • The fiber rollout is not a 100mbps network.

            The alternatives are severly speed limited and always will be.

            Fiber is good because it is actually cheaper to roll out fiber than copper. Fiber is capable of going way beyond 100mbps (1gbps at the least, almost certainly 10gbps) per connection.

            Wireless & HFC all share channels between connections so whatever speed they can do, as the user base grows they will fail to deliver to the cunsumer.

            Our NBN is not 10 yrs away, it is happening now.

            Rolling out any DSL is in fact rolling out outdated tech on top of already outdated copper.

            Even if we have a fiber NBN, we are still in a better place for the added advantages of any wireless tech for whatever it is good at.

            Wireless networks rely on Fiber backhaul and without it they would not be able to cope with supplying 3G let alone 4G.

            Plus by putting homes and businesses on fiber the bandwidth of the wireless services will be available for the real mobile uses.

            In short – fiber is future proofing.

        • For point 5 : Concerning the out dated technology when it’s completed.

          On of the things that you have to remember that fibre is only the means of transport of data and voice. This should never go out of date but the swtches, routers, firewalls, PABXs etc. etc. can be easily upgraded and this might be what Jonathan and Show me the Money are referring to. The technology that connects the two ends together and not the fibre.

          If a higher speed is required, I don’t see a major issue with swapping out the old tech for the new tech and this is something that can pretty much be increased overnight if required and it shouldn’t cost too much either.

          Yes it can be outdated by the time it is completed but in actual fact it will never “be completed” and it should be easily upgraded at a very low cost.

          • Isn’t the point is still valid?
            100mb vs 1g (now). So while fiber can go higher we are being sold on 100mb (to be completed in 10 years).
            I don’t work for an ISP so take what i say with a grain of salt but I don’t think Its an easy upgrade to change all the backend equipment nor is it cheap. Just look at how long it took for every exchange to have all the DSlams upgraded to adsl1/2? From memory i was waiting a long time.

          • Upgrading the equipment is far quicker and cheaper than laying the cable. 100Mbps is more than most people need today, but will be average 10 years. And it’s already capable of 1 Gbps (which costs $150/month).

            Remember, it was Telstra who limited their ADSL1 equipment to 1500/256 for years, until Internode finally started rolling out their own DSLAMs in 2003. And even then, it took years more before Telstra would bother upgrading an exchange unless a competitor was already offering ADSL2 there.

          • Hi there.

            Because human labour is so ridiculously expensive here in Australia most of the cost of the rollout I would imagine is in the digging up of dirt and laying of fibre cables. The networking equipment can be upgraded as part of routine maintenance as they do with telephone exchanges all the time. And by that I mean when new housing estates come online etc…. The DSLam problem that you mentioned has more to do with Telstra bureaucracy (because they own most of the exchanges and are shit slow to do anything) than cost or technical reasons.

            Fibre transports data with light so theoretically it’s only limited by the speed of light. It’s the conversion from light inpulses to electrical impulses by the networking equipment that’s the bottleneck right now. I remember watching Catalyst once and saw that some researchers at ANU have come up with a way of not needing to convert light data at all.

          • Barry you are a smart man, thanks for reading correct and offering some constrictive and educated points!… I agree with you but would like NBN to confirm they are rolling out 10Gbps+ equipment as I understand the cable is expensive but the routers are also by no means cheap and the point is if they are in fact rolling out equipment that is capable of only 1Gps (ports) this is a waist of money… the plans should start at 1Gbps in cities and scale to 10Gbps now as they currently are which is crazy limiting both speed and capacity and I’m really tired of Australia doing things like this and since the unlimited ADSL plans came about I though we had passed that age and caught up to the rest of the world in that regard but looks like NBN is trying to push us back again…

            As mentioned in some other posts, a freind in Brisbane was recently forced onto the FC network (due to the copper network being ripped up and removed) he use to be on ADSL2+ and synced at around 19-20Mbps.. he use to stream allot of overseas TV, host a few services and had an unlimited upload and download connection… Since he’s been forced onto the FC network he now pays almost twice as much (yes including what the phone rental use to be as well) and speeds are slightly better download and much better upload (he’s on the lower speed plans) BUT this costs him more as mentioned and he can’t stream TV services any longer as he’s now got download limits which are simply crazy which he never had before… so currently he’s paying just short of twice as much and getting a whole lot less and is very angry and frustrated, has also tried to complain to just about every one possible including the TIO which can’t do a single thing about it to help out….

          • John. Is that because he is part of the Southbank debacle and is stuck with Telstra is his provider ?! …. That would explain the price.

            Don’t put out misinformation about NBN pricing like this …. All major providers are advertising plans which are significantly cheaper and better value than current DSL offers.

            Unfortunately the only people stupid enough to believe the “services will costs lots more” myth … are the ones who are not able to go and look up the plan costs themselves.

            How sad.

      • Not a lot of point in dishing up “business case” facts to a techie now is there Angus – lets just rollout the Conroy version of the world “spend and spend and spend and they will come”.

        I think you actually missed the whole point I was making in point 6 – there have been no numbers published !! And that is the point !

        I’m not sure whether you work in a profit making/commercial viable business or not, but if you dont make a profit in most businesses then you dont have a business – unless of course you are spending public money and you represent a Labor Government.

        Say hello to Tinkerbell for me and I’ll keep talking to all my commercially focussed business troll associates.

    • NBN cost to government: $28 billion over 10 years (or $2.8 billion per year)

      In perspective:

      $12 billion per year is what state and federal governments spend on roads

      $2 billion per year is what the federal governtment spends on subsidising diesel for companies

      Plus, as most people have pointed out here, the government gets a direct return of 7%

  • “… ADSL prices require you to pay for a landline …”
    Umm, might want to rethink that one, I pay $0 on lines with my nakedDSL connection.
    ok, to be fair, there’s probably a small premium there but it’s nowhere near the ~$35? (not even sure exactly what they’re charging these days it’s been so long since I’ve had a rented line) being charged for line rental these days.

    • Naked DSL is a different beast to standard ADSL (and is a right pain to get connected, which comes back to issues with how Telstra handles other people using its network).

    • I bet you don’t get your adsl voip for under $35… the plan incorporates the telstra rental cost, always has, its just advertised different. You are no longer on the telstra dslam but on a third party but the cable that comes from your house still belongs to telstra and they lease it to your isp.

  • Myth #1, I agree higher speeds are needed in Australia, however what I can’t accept is why they are rolling out a outdated 100Mbps FC network which before its completion date will be outdated? Other countries with Fibre are already upgrading to 1Gbps and this upgraded started over a year ago but for some reason our 10year+ plan is to roll out a 10x slower network upfront… I understand it can be upgraded later but this is such a waste of money and resources… At a minimum all major cities should be on 1Gbps.

    Myth #2, What marketing spin rubbish is that? I run a UPS as home for my PC and my main phone is direct connect for the exact reason of power outage but if UPS is installed you could also connect your phone if you insist on a hands free phone…NBN should NOT go down in a power outage this seems like networking 101 to me and I can’t believe the argument they put together for this point #2… Crazy!

    Myth #3, you are correct you can’t simply shift the money from NBN to roads..etc..etc.. Because the government does not have the money in the first place, the people are paying for this before it’s delivered, the government should have had the funds to build this if they managed our finances better and we would have avoided a huge amount of wastage and interest!

    Myth #4, Too right the NBN is way overpriced! Maintaining a FC network is allot cheaper than a copper network, there is no need for line rental and you can receive more services via an FC link (eg, phone, TV, internet..etc)… They have decided to limit both download speeds AND capacity AND charge a premium to its customers who have paid to build the network… Sorry the pricing should be allot cheaper than it is and capping both speed and downloads is just crazy and not acceptable.

    Myth #5, too right you will be forced to move to the NBN, a friend in Brisbane has already been forced.. he use to have unlimited ADSL2+ with 20MBps connection, they have ripped out the copper lines and forced him over to a Fibre plan which costs over twice the price and he’s now got limits on he’s downloads… upload speeds are better but he’s paying allot more and can’t stream overseas TV services like he use to due to ridiculous download data limits imposed by him… so yes he had no choice but have no usable service or pay extra and move!

    Myth #6, not really a myth as all, I think it’s common knowledge that what is being reported is not balanced, inaccurate and often not understood.

    • The NBNCo is rolling out a fibre to the home network that can run at 1G/Sec, limits on the speeds that are available to subscribers are controlled by the retail providers, not the NBNCo. Retail provider speeds are not particularly high but they can be increased at any time. I have little doubt that the retailers will begin to make higher speeds available but they will try to gouge their subscribers when they do. On the other hand they will be operating in a competitive market and as soon as one provider begins to offer more speed at a lower price the rest will be forced, by the market, to follow. I expect that once the NBN is fully operational that 1GB speeds will become commonplace.

      The speed of the NBN is not a technical issue, is is simply a matter of retailers putting up slower speeds at a time when the market is not competitive.

      • Hi Jonathan,

        I’m NBN Co’s Digital Communications Manager and thought I’d explain a bit more about our speed on the fibre optic network we are building.

        Our fibre optic National Broadband Network will deliver speeds of up to 1 gigabit per second, at least ten times faster than anything residential consumers can currently access in Australia. Those speeds will be available not just to city dwellers but to homes, farms and businesses across the vast majority of the country.

        Broadband signals travel down the fibre at the speed of light. The only limitation on the speed with which the ones and zeros can be reassembled into pictures, video and words is the NBN box at either end of the link and the capabilities of the home computer and networking gear.

        Indeed, the backbone of the NBN, the so-called transit network of large cables that will traverse the nation, is capable of speeds much faster than that: up to 9.6 Terabits per second. This is commercial equipment using 96 beams of light on a single fibre each able to carry 100Gbps.

        Hope that helps.


        • Scott,

          Thanks for you input. I can accept most of you points. I do how ever question the accuracy of “Those speeds will be available…. but to homes, farms and businesses. Specifically your reference to farms puzzles me. Are you saying that NBN Co will commit to running fibre to a farm residence, sometime several km’s from main roads to service one consumer? If so then fantastic but I doubt that is commercially viable, but you work for NBN so I guess you should know. If not then, you more than most of us should be responsible for you comments and try to be accurate when making them. Is it not the case that the “…vast majority” of farms will be serviced by either fixed wireless (not likely) or satellite (more likely)? I wish NBN Co and others would stop referring to the area’s to be serviced by fixed wireless or satellite using sweeping statements, inferring the technology and eventual capabilities are in line with Fibre. Bring on the NBN but start to properly manage the expectations of consumers likely to be outside the planned fibre footprint.


    • @Jonathan, regarding Myth #1 it has already been revealed that the network is capable of 1GBps speeds. Some customers are already using it at this speed. The reason these speeds are not in the normal list of available plans is because of idiots who scream “WE DON’T NEED FASTER BROADBAND” at us. You can’t complain that it’s a waste of money because we don’t need faster broadband, and then complain that it’s not fast enough.

      Myth #2 Alright, you’ve already got a battery backup, so you don’t need the one NBNCo offer. What exactly is your argument here? If you don’t have that UPS, your current ADSL or cable connection goes down during a blackout. How is this any different from the NBN? Networking 101 eh? Did you complete Electricity 101 first?

      Myth #3 Yes, ALP are massive retards when it comes to managing the budget. But this is the ONE THING they should actually be spending money on. Forget the stimulus packages, what a waste. But to argue that the one worthwhile expenditure should be put aside is counter-intuitive.

      Myth #4 I believe Angus covered this. A premium charge? GTFO. It’s not overpriced for what it delivers.

      Myth #5 He could have instead gone to one of those amazing 3G or satellite plans the libs are espousing as a viable alternative… oh wait.

      Myth #6 I agree.

      • Micha…

        Thanks for the reply.. let me provide you more points to think about.

        1. I NEVER said we don’t need faster internet, I’ve always said we need faster… My point is (and I did say the network can be upgraded to 1Gbps) is that the equipment being installed should be 1Gbps upfront… why install 100Mbps equipment that needs to be replaced and upgraded at more cost again? I don’t think the issue is the network is too fast, the issue is the cost involved and then limiting speeds AND downloads and paying for the network then paying even more to be connected and use it than the current technology and it SHOULD be cheaper!

        2. The point was about your phone being offline, this is the point.. I don’t appreciate your electricity 101 comment and would appreciate if you try and read and understand a little better before attacking on a basic issue… If you have seen when companies sell VOIP services there is big concerns for many about the service going down and not being accessible during a power outage and why old people have to have a reliable service. I believe the same warnings and education is needed as this could catch people out that will not understand they will loose access to there phone during a power outage which could cost some there lives… The point is a basic USP of some kind has to be offered and explained to customers as we can’t expect end users to know networking and power 101 as you and I might understand and it’s a very serious issue… when the power goes out currently people do NOT loose access to there phones was the point!

        3. I use to vote ALP in the past but do not any longer as I’ve been very disappointed by them… the point was it should not be costing as much as it currently is and there is big amounts of wastage in our country and very high taxes and cost of living pressure, the thing we need least right now is more costs, debt and higher taxes..

        4. Again you are looking at speed, and miss the point that the Fibre network should be cheaper to run and maintain over copper so prices should be cheaper…. Speeds and downloads are both limited which is wrong (pick one or the other NOT both as its’ not needed)… We have paid for this network and need to pay more to use it as well so yes there is a premium and as per my friend he’s most upset with the much higher costs, similar speeds and significantly less downloads! so I think I’ve made a very fair point.

        • 1. It is capable of 1Gbps already. NBNCo said that two years ago.

          2. Agree that education would help. Many people don’t realise their cordless phones won’t work in a blackout, but nobody’s concerned about that. Luckily, battery-powered mobile phones are common.

          3. Perhaps you should talk to NBNCo’s accounting department. They might know a few relevant figures about costs and wastage.

          4. You’ve forgotten that lines are shared and have limited capacity. Not just at the GPON level, but the backhaul, backbone and international links too. If all 8 million homes in AU had 1Gbps links with unrestricted quotas, that’s 500x more than our current 15 Tbps of international bandwidth (not counting the considerable needs of businesses). Quotas keep average costs down and congestion under control, while still allowing heavy users to buy more if they need it.

          • 1. yes thats what they have ‘said’ but failed to provide details other than saying it’s ‘capable’… I could claim my car’s also capable of running at 300KM/h… I don’t have to give details how but I can guarantee I could get it there if I wanted to…. Put it this way we all know the FC cable can run at 10Gbps the issue is they have not said the equipment/hardware they are rolling out is.. As they have not said this it would seem they are rolling out 1Gbps hardware which is outdated and will need replacing very soon.. it seems silly if you are rolling out a brand new network to be installing old/obsolete hardware… again I do understand the cables are capable but it would be great to get clarification that the hardware being rolled out is 10Gbps which is what they have not said and have avoided when asked… they keep saying exactly what you just have ” the network is ‘capable’ of it… yeah we know that much but what about the question, is the equipment and entire network currently able to..etc

            3. I think many have tried to get details and figures out of the NBN co… and have failed! I have tried to call them my self to just get a rough ETA for roll-out in my area and spent about a week going in circles and getting no were. They now have released a bit of a website which is at least something but basically with that company if it’s not published already I don’t think you will get much more out of them as they are rather useless to talk to (give it a go and take the challenge, I already have and gave up with them!)

            4. If you are installing an NBN network part of that should be with working closely with backbone operators (some are already increasing capacity as we type) but more should be getting done and it will come with time.. I understand your point but if we want to have what they keep referring to a ‘world class network’ it has to be just that a world class ‘network’ which includes the ‘entire network’ as you say there is no point in having really fast connections with slow links between states/world..etc..

            A world class network now days is 10Gbps not 1Gbps but slowed down to 0.020Gbps ow yeah and we’ll also limit your downloads and hell while we are at it lets count the uploads as well… come on we just started getting some decent unlimited ADSL2+ plans in our country and we are taking a step back with this so called ‘world class’ brand spanking new network… I think we deserve better and people should expect more for the money being paid.

      • Hi there,
        I’d like a comment regarding this comment repeated below. Not the first time I’ve heard similar……

        Myth #5, too right you will be forced to move to the NBN, a friend in Brisbane has already been forced.. he use to have unlimited ADSL2+ with 20MBps connection, they have ripped out the copper lines and forced him over to a Fibre plan which costs over twice the price and he’s now got limits on he’s downloads… upload speeds are better but he’s paying allot more and can’t stream overseas TV services like he use to due to ridiculous download data limits imposed by him… so yes he had no choice but have no usable service or pay extra and move!

          • Is that really your argument? That having the only reasonable alternative removed doesn’t constitute forcing you onto the NBN?

          • There are plenty of other reasonable alternatives. Like the wireless solution that the Liberals so clearly want to be the only one.

          • Hi,

            It sounds like your friend was in South Brisbane? This is where Telstra is rolling out the velocity fibre network as a result of decommissioning the old exchange to make way for a new hospital. Telstra are responsible for this not the NBN, and the reason for the increase in price is entirely a Telstra decision. I am not yet aware of any other copper being decommissioned…

    • Jonathan, from my understanding the upgrade from 100Mbps to 1Gbps is actually not a difficult or very costly one to make in the future, and can be done by upgrading the receivers or something (sorry, dont remember the technical details). I think this was done because general opinion is that even 100 Mbps is too much (these people have clearly not tried to use Skype at home with 3 other people either torrenting or YouTubeing..

    • Again?! Are you serious?

      “why they are rolling out a outdated 100Mbps FC network”

      Because that’s what the majority of the people want/needs as a max speed. It doesn’t make sense to roll it out to everybody now …. as it would cost too much. It can easily be updated ater for those who want it.

      “NBN should NOT go down in a power outage”

      It doesn’t have to…. If people like you want or have a UPS…. then they can also take the option to have a battery backup on their NBN.

      “the government should have had the funds to build this”

      Business since the beginning of time, have borrowed money to invest in return generating endeavours…. The idea of not borring the money, and waiting to save up before getting the wealth generating asset, is actually LESS economically smart …. assuming you will be making more in return than the cost of interest…. which this project will.

      “They have decided to limit both download speeds AND capacity”

      Speeds can be easily upgraded, it does not make sense right now to roll 1gps or more to every house.
      There is no limit on capacity, this is up to the retail service provider.

      Implying that we should have no download limits ignores the fact that providers pay money for the data. Unlimited is not a viable business case at such large speeds…. but like I said, RSPs are free to do this if the can/want.

      “you will be forced to move to the NBN, a friend in Brisbane”

      Yes you will be forced to move. Copper will be decommissioned. That is a smart move.

      Your friend in Brisbane must be limited in his choice of retail providers to be stuck with a service like that (*cough* Testra *cough*) …. Other providers NBN plans almost universally better value than DSL / cable.

  • Look, I have been a Liberal voter all my life. I WISH the Libs had come up with the NBN – it’s the best bit of infrastructure in decades. I have to say, anyone who argues against this is arguing purely and solely based on political allegiance. If you’re against it, pretend that it was Malcolm Turnbull, rather than Conroy who was the minister overseeing this. In fact, I would not be in the least surprised to discover that Turnbull is privately in fact in favour of the NBN, but has to toe the party line.

    The NBN is an investment, not an expense – as pointed out numerous times above. So the cost argument loses a lot of credibility right there.

    Those who say wireless and satellite could do the same job are ignoring the technical reality. Fibre is far more scalable, far more reliable and less prone to overload.

    Those who say the current media coverage is fair and balanced would also consider Fox News in the USA Fair and Balanced. I’m a liberal voter, former Young Liberal, and ashamed to say I hope to GOD that Tony Abbott is not the next PM.

    • “My point is (and I did say the network can be upgraded to 1Gbps) is that the equipment being installed should be 1Gbps upfront… why install 100Mbps equipment that needs to be replaced and upgraded at more cost again? ”

      The equipment being installed *IS* 1Gbps capable, not sure why you think otherwise.

      In the long run though, it’s smarter to upgrade as you need rather than too far in advance. NBNco could build the network to support 100Gbps speeds per house… but the costs would be phenomenally huge, the RSP’s wouldn’t be able to support said speeds, and the benefits would be very minor. Instead, it’s smarter to wait for demand to increase and the prices of the electronics to drop.

      Do remember, the vast cost of the NBN is in the labour required to put the fibre in the ground – the bits that need upgrading are a minor aspect of the budget.

    • I’m with you Micha, i’ve been a Libs voter in the past but this is looking like a deal breaker for me. The Lib’s back-up plan just seemed conceived by people who don’t know what they’re talking about.

    • if you understood how the liberal party operates as compared to labor you’d understand that they would NEVER have caused into existence NBNCo. They would have (have the demand was there) given incentive for private enterprise to compete over the network (resulting in it being cheaper for the tax payer and end user, not to mention a quicker build cycle) rather than building some bureaucratic organisation at all of our expense, i.e. Telecom 2.0

      • In theory tax incentivisation to spur private business to provide necessary services and goods is solid economics. However, it’s not a panacea and certainly isn’t applicable to all cases.

        In this particular instance, the amount of tax incentive you’d have to give private industry in order to commit to such an agressive program of work is a moot point because no private business exists that can feasibly acomplish this goal.

        Even if Telstra or Optus were able to accomplish this program on their own with tax incentives, there still is very little reason for them to do so because there is no direct competition that would make owning such a network desirable.

        The end result would be fairly predictable – the public coffers would be drained for tax breaks and the result would be a spotty 1gbs fibre network in some of the capital cities.

    • Would be an interesting point to put across by an ballsy journo to Telstra and the government! *who gets the money for the resalke of the copper – is it reinvested in the NBN?

        • I seem to recall reading somewhere that ownership of the copper wire does go to NBN Co, so if that’s right I guess they could sell whatever they pull out. But you also have to consider the logistics/cost of pulling it out. I wouldn’t be surprised if they leave it in unless they need the space in the conduit.

          • Incorrect. The government purchased access to the pits conduits and exchanges. Telstra agreed to deactivate the copper network, not give it to NBN Co.

  • I suppose building the snowy mountains electric scheme was a waste at the time? The Sydney Harbour bridge was also a waste considering the economic climate at the time.
    We have to look at the future, if we look at 1995, did anyone really realise how big the internet was going to be? We have gone from dial up speeds to massive cable speeds, and what will happen in the next few years. I am for the NBN and what I see is an investment with a 7% return, so spend 35 Bil now, make it back + 7% when sold.
    We need people to look to future years and not the next election cycle.

  • Myth #2:

    Both Panasonic and Uniden now have cordless phones that work in a blackout available for sale immediately.

    With Panasonic rolling out this feature to every model updated from now on.

    The point of mobile phones is still partially true but you must bare in mind that In the event of floods and/or fires, it is entirley common that mobile networks fail in the effected areas.

  • Agree with all your points, Angus, but, lets face it, it’s pissing in the wind. The QLD State elections are a clue to the future: Australia’s idiot-redneck population will vote for the mining company representative organisation once known as the Coalition. There will be no NBN. Outback/regional Australia will be thrown to fat extreme-right-wing multibillionaires, who will decide who gets access to what in their personal fiefdoms.

    The NBN is a good idea. But in practical terms it’s a dead duck.

    • And if the coalition *does* dismantle the NBN, then we no longer get a return on the money invested so far. They’ll be directly responsible for wasting all of that money, not the current incumbents. That really gets my goat.

    • The mad monk is not going to be able to cancel the NBN. Contracts have been signed. Those contracts have penalties written into them if either party breaches the contract. In our legal system even the government can’t just cancel a contract without paying for it.

      At the end of the day the amount of money spent to get out of the contracts plus all the legal fees would end up costing almost as much as building the network itself, except there wouldn’t be an asset to make a profit off or sell. It’d all be straight dead loss.

  • I would like to see info on the hidden cost of city consumers subsiding country ones by have flat rates across the NBN. I think it is appropriate to subsidize regional areas but under this model we have no idea what that hidden cost is. It is obviously substantial or they wouldn’t have to legislate against competition (new competition not just Telstra copper mentioned in the article) in metropolitan areas.

  • I live around 3.7km as the crow flies from the centre of Brisbane’s CBD and my ADSL2+ connection doesn’t sync above 9mbps at a stable SNR. It seems that my house is basically at the very outskirts of the coverage area for 3 different exchanges, which means my street and the surrounding streets are essentially in a dead zone.

    TPG’s coverage maps show people 300m away syncing 2x as fast. What garbage infrastructure considering I’m living smack bang in the Brisbane metro area… can only imagine the BS people living rurally have to endure. I have friends living in the western suburbs of Brisbane who tell me they can’t even get ADSL because the exchanges are at capacity and have no ports spare for new customers.

    Bring on the NBN.

    • But there will be no NBN! The mining-Coalition have made it clear they’ll get rid of it, whatever it costs to do so (which makes a sense, given that they have a preference for private over public monopolies). And does anyone seriously give Labor a chance at the next Federal election?

      • The Libs seem to be stepping back from that now. They are starting to realise how much will already be built by the next election, how much it would cost to scrap and how popular it is as a project. They will probably look to scale it back but at the moment it looks like a substantial portion of the network will be built no matter what happens at the next election.

        • I hope you’re right. In particular I hope the nats can hold enough sway to stop them savaging rural areas too much. In my part of Brisbane, I get pretty good net access as is, and that isn’t likely to change. But without the kind of nation-scale planning that the NBN represents, rural Australia will get a raw deal.

    • Oddly, I live in a rural area about 2km from the exchange and get a nice consistent 7mbps ADSL connection through bigpond (only provider on the exchange). A friend of mine lives just S/Wof Brisbane in quite a large housing estate and can’t get ADSL at all – has to really on crappy 3G. He’s hoping for the NBN so he can get decent broadband. Me, not so much. I’m in an area not covered by the NBN which means (I fear) that the ADSL I currently use will be switched off and I’ll be forced to wireless and satellite of lesser bandwidth/quality.

  • However, it does give the government direct power to censor, monitor and track all internet activity at the wholesale level, which is still a scary thought.

  • Myth #7: You are likely to get fibre to your house in the next 3 years.
    One thing that I am disappointed about is the time it takes. I know it is a huge job, but virtually all non-nbn improvements to the existing adsl network have stopped in the face of the monopoly, and the NBN is nowhere is sight for many of us. I did a quick look at the greater Sydney and Melbourne roll out maps and by my reckoning about 2/3 of the houses have nothing starting within 3 years.
    I agree the coverage seems negative. almost univerally. That worries me as well, almost as much as the incessant fanboys on the other side of the argument.

  • All in all I am hoping there are no delays to my house being hooked up in 2014. If the wildfire liberals want to keep their suburbs in the 1920s they can but my progressive suburb has its contract signed.

  • I have always found the amount of media ignorance and bias in reporting the whole NBN debate intensely frustrating. I used to work on the NBN so I know how well this project has been planned and run from day one, but even an outside observer with a decent level of technical knowledge can see how many of the arguments raised against it are absolute nonsense. There is a legitimate debate here as to the costs and benefits of a FTTH versus a FTTN network versus existing infrastructure but unfortunately the media are a long way from having that debate. The Murdoch-owned outlets just talk about cost because that’s their narrative on everything this government does and so other outlets feel the need to defend the project. In neither case is there any real analysis.

    What is scary is that I can see what a poor job the media are doing in this debate only because I know about this project and follow it closely. Presumably there are all manner of other areas in which the media is failing us and we would never notice.

  • Not building the NBN will not save money. Copper needs replacing, it is already in disrepair. Just like keeping an old car running eventually costs more than buying a new one without any improvement in performance, to keep copper with slower speeds, constant maintenance and shrinking capabilities is actually counter productive.

  • Skyva
    Agree that it is disappointing that it will take so long but how many employees would it take to connect the millions of homes any quicker? It would also mean having the total expenditure up front rather than spaced in achievable tranches.

  • I live in Brisbane and my suburb (which isn’t exactly out in the sticks, it’s a popular residential suburb) doesn’t even have an estimated NBN install date yet. I want it, but I can’t help but feel that it could stand to be rolled out a little faster.

  • The big problems that I see are:
    1 no bipartisan support. One side of government will try to bury it, the other will support it through thick and thin. This should have been addressed before commencement.
    2 Creation of a government funded monopoly. After all the problems with Telstra, we are going down that path again. This is compounded by problem No.1 which means the monopoly willl be a protected species under Labour and a whipping boy under Liberal. Both are equally bad.
    3. Costs of the project. Anyone who thinks this will be the last of the budget increases is dreaming. Compound with problem No.1, this is fine whilst the current government is in power as they will keep stumping up additional funds. When the next government comes in, there will be no more extensions to funding so the project will shrink.

    • Bipartison support was never a real option once Tea Party Tony and his nutty crew took over the Libs. It might have been possible under Turnbull, who is at least sane.

    • government funded monopoly… like Australia Post? or a wholesome private monopoly like the Airports or other Macquarie monopolies?

      If you want anything big, long term and with a long pay off time, it will probably need to be government funded or government backed at the very least. Unfortunately, politics now has a four year event horizon so don’t expect to see many national infrastructure projects.

  • Yes there were budget blowouts but there were gains along with them. More connections in a faster time. Completion is delayed but a better network with a better return in the end.
    The NBN mononpoly is very different to Telstra’s. They are simply the wholesaler and plans for breaking up the monopoly are already there.

  • The NBN is a fantastic idea, especially given the current state of the internet services in Australia. Coming from the UK where cable is the norm (and installed to most streets during the early 1990s), the net services here are dated: speeds are slower and capped plans are the norm. And by no means is the UK at or near the top of the download speeds medals table. For Australia and Australian businesses to carry on growing the NBN is not just desirable it is essential. It will also provide an excellent return on investment for the country.

    National infrastructure projects like this cannot and should not be left to the private sector. This is text book example of when the Federal Government should take the lead and plan for the future to create a nationwide solution. Of course, these projects cost a lot, of course they run over budget.. but it’s the same in the private sector. Just because there’s waste it doesn’t mean the project should be canned. The benefits far outweigh the costs.

    Fingers crossed the project doesn’t get scrapped due to short-term thinking. If it does Australia will get be left in the dust as the internet age matures and you can’t keep digging stuff out of the ground forever.

  • I have idea for myths #7, The NBN will be obsolete by the time of completion.

    #8 Wireless internet will be superior to wired internet in a few years.

    This seems to be a popular arguments with anti-NBN people, which with these and the other myths proves people don’t know what they’re against.

  • Let’s get one thing clear, we WANT NBN to be a monopoly. It is actually cheaper and more efficient to deliver broadband with a wholesale monopoly.

    Its a first year economics problem, but by the sounds of things not many people on this forum have any idea about basic economics. Try searching for Natural Monopoly (

    So in industries with high fixed costs (utilities like power and water) you only want ONE set of the infrastructure. Eg You only want one set of water pipes to someone’s house, it is not efficient to have 5 different water pipes because water pipes are very expensive. Then you regulate for retail water providers to rent space in the pipes. Same goes for electricity distribution and, you guessed it, broadband. In this case, you encourage competition in the retail space where firms compete on price and service, NOT on who has the best pipes.

    The system we previously had was Telstra and optus laying fibre to the SAME areas (most metro). This is not efficient.

    • Your way off with Natural Monopoly. From your link: Natural monopolies arise where the largest supplier in an industry, often the first supplier in a market, has an overwhelming cost advantage over other actual or potential competitors”. The “overwhelming cost advantage” provides a natural monopoly. Getting the government to buy up and pull out competing technologies (ie payment to telstra and pulling out copper) is not a natural monopoly, it is a very artifical government monopoly. Having Optus compete with telstra actually reduced costs to the consumer, not increased them. It did increase the total cost of the infrastructure though.
      Lets get one thing clear, we have seen a telco monopoly here and it was bad. This project is another one, and competition has already dried up, with the largest being bought out of the game (telstra and optus) and the smaller being absorbed by bigger fish. Read what a competitor said after quitting the game:

  • Please remember this. The Liberals oppose the NBN because they have mates who run businesses that could make big profits if the government weren’t going out and building this. Every single financial and technical argument against it is a constructed fancy derived from this driving intention. You can argue technical facts, accounting systems until the cows come home, but you will never convince these people that a government has any role in building infrastructure that a private company could do instead. Forget the fact that a private company would do it on a smaller scale, targetted only at those parts of the country where easy profits could be made with the least expenditure, upgraded as slowly as possible to ensure the maximum profit made from any actual investment.

    The fact is that building our new network this way maximises the value to the Australian nation and the Australian people as a whole, and forgoes any capacity for private interests to extract all the possible profit margins. That’s why the Liberals hate it. That’s why The Australian (or more precisely, their advertisers) hate it. That’s why it’s pointless trying to convince those who think governments shouldn’t build infrastructure.

    As taxpayers and individual citizens, and as small and medium and other non-telecommunications businesses, we will all derive massive benefits from this project. The powerful, noisy but tiny telecommunications businesses will miss a chance at easy profits.

    • Decent internet comes from great competition. We are in trouble right now because we haven’t had this competition, and we have already experienced what happens when the government owns it (Telstra). The privatization of Telstra only sucks because they were originally government owned and have never had to consider what would happen if they didn’t make competitive products.

      • Competition is best to happen at the retail level, not at the infrastructure level, as has already been mentioned a few times, otherwise, you get multiple pipes at the same destinations, which is wasteful. This is how it is done with electricity, gas and water and you don’t see anyone wanting that changed. For basic utilities such as power, heating and water, it is wiser to have it owned by the government as it has to answer to the people, instead of a company which is more interested in profits (e.g. Telstra). Internet broadband is now increasingly a basic necessity so the same arguments apply. The privatisation of Telstra was a mistake because it gave Telstra a monopoly in the infrastructure and it retained its retail arm which means it gave its retail arm advantages and its competitors disadvantages when it can get away with it thus restricting competition. It was also a mistake because it’s making generous profits year after year, when all that money could be going back to the government and us, the taxpayers. Yes, a big chunk of the surplus that Howard is praised for is probably from the sale of one of the most profitable public assets of Australia.

        Myth 10: using private companies to build things will ensure less waste, which will translate into cheaper cost to the consumer.

        Companies that are experts at something will be more efficient at doing things. That’s why the NBN company was created. Marketing 101 says, you price your product at what the market will bear. If the market will bear a higher cost, no matter how much it saved, a private company will use the higher cost (think current house prices where a new coat of paint increases the house price by $40k). At least the NBN will have the government as its master, and not a select few shareholders. I dread the day that the NBN will be privatised because that is when it will become another Telstra, not before.

  • The battery issue is a real one. In an emergency situation the shear number of mobile calls being made could make it unfeasible to use, this cost cutting exercise will cost lives.

    • All you do is piggy back a connetion from your cordless phone to a typical hand set of old, problem solved and the NBN backup battery does the rest. In the case of the Satelite a 24hr UPS battery (Should be Standard part of the kit) or connect to your 40volt sola system done!!!

  • I disagree with point #4.

    I currently have Cable internet with optus ( i don’t rent the cable from optus) i have the high speed package with theoretical speed of 100 Mbps, i get 80 Mbps out of it and 60 Mbps over wifi, at a cost of $69 month.

    For the the same package on the NBN according to Planhacker it will cost me $129.99. Mmmm that appears to be almost double what i pay now for the same thing.

    • I agree. Oh, and btw, they still want to censor the internet, despite it falling off the front page of the popular media. It frightens me what will happen when they will OWN the internet within the country

  • Myth #1 is the most accurate after a slight tweak. Hardly anyone will pay for the faster speeds. vast majority will get 12 or 25mbits to save $$. people DO want faster interent, they just don’t want to pay for it.

  • Myth #6. Last I checked, Gawker was a fairly “mainstream” media outlet and is INCREDIBLY slanted towards pro-NBN. (wikipedia: “Gawker Media….considered to be one of the most visible and successful blog-oriented media companies.”).

    Oh, I guess that supports your point that media is not “objective and balanced”, just be sure to lump Gizmodo and Lifehacker into that group, please.

  • Quite a heated discussion here eh. Good to see that so many people are passionate about the internet. My only problem with the NBN is simply this…

    The only reason that we need the NBN is because the government paid for the infrastructure that Telstra currently owns (as it used to be a government owned company), and after privatization, it became the owner of this infrastructure (hence, a monopoly on all infrastructure). Why is our answer to this problem to create new infrastructure, the same way we did before, and hope that this fixes the problem (and perhaps having another monopoly with the new infrastructure in the future). Surely a decent thing would be to subsidize infrastructure to other companies to encourage competition (so that prices will be better).

    The only reason why the rest of the world is doing better is because they have lots of competition. Have a problem with AT&T in the US? Go to Comcast? Don’t like, that head to Rogers. So many choices, and they all are trying their hardest to ensure that your money is going to them. Oh, and they all own their own infrastructure.

    • Yep, competition is good. The government needs to stick to policy making and stop interfering with competition in the marketplace. I love how nobody bothers to ask why Australia really got to be a “broadband backwater” as Labor loves to call it (beyond than just blaming the other guys: ). Yes, lets fix the problems that our previous monopoly caused by putting in a new monopoly!

      Gotta love the human condition and our utter inability to learn from mistakes.

  • The way both Optus and Telstra market high speed broadband right now is diabolical. For example, South Brisbane is ostensibly ready. Naked BB? – no. Need a phone for all high speed plans. $300 odd for a high speed modem? Extra charges etc. Who you kidding Telstra.
    Ombudsman force them to put up a naked 100mb/s say 150gb for $90 p/month.

  • There are many supporters of the NBN here on this forum who gloat over the supposed 7% return on the investment in the NBN (after borrowing the money in the first place at 3%). Sounds great if the project comes in on budget. Word is already out about cost blowouts of anything between 1.5 and 6 billion and the project is way off completion. What do they think will happen when the budget blows out to 50Billion … 70Billion … 100 Billion? Either the return will have to take a hit, or once the government has seen all the alternate internet service connections dismantled, guess what … we the lucky ones will just have to pay more to make this wonderful investment look like it was worth it after all!

  • Having discussions over a dead set winner for this country is idiodic, lets just leave our wonderful out of date copper and gloat over the saving we will make…

  • I’m a fan of the NBN (or at least, what I hope it will become) and live in an area that was in the second group of suburbs announced to get access to it. It still hasn’t been completed – although work has begun – so I hope those in the rest of the country are ready for a huge wait.

    I think that, on balance, the NBN is a worthwhile investment and even the Opposition knows we’re beyond the point of no return – they are setting things up so that every set back that occurs whilst they’re in a future Government can be placed upon their political opponents, whereas whatever benefits occur will be said to have potentially been achieved more cost effectively under their plan. So no one needs to stress about a future Liberal Government stopping contruction of the NBN – just hope that the rollout rate increases exponentially because I can’t believe a suburb that was listed as one of the first to get access is still without it in 2012 and with no information on when precisely it will be available (well, it says “within 12 months” of cable being laid, which occured Jan 2012)

    That said, the article seems to “debunk” myths I hadn’t heard of up to this point by any serious opponents of the NBN. Their arguement simply seems to be that the cost to benefit ratio of the NBN is inferior to that of other alternatives.

  • I’m a big fan of the NBN, can’t wait till I have it, but #4 isn’t REALLY correct…

    Right now I’m paying $60/month at 12Mbps down, no data cap (i.e. 3.2TB data cap). I won’t be able to get a plan anywhere NEAR that good, for a price anywhere near $60.

  • So 7% return :: $B37 investment .
    7% = $B2.59 return every year.
    If there are 22,705,075 australians – then every single australian will have to pay $114.07 each year.

    That seems an awful lot more than what I’m paying for ADSL now – for my ‘whole’ family’

  • Has anyone got a 30 mt tower 50 mts from their kitchen window?
    That’swhat is proposed for my place!! Health risks, they say very little. ??????
    They have given me 16 days to comment. I feel so helpless

  • @moss, it is a return of 7.1% each year. If the NBN only lasted for a year, then you would have a loss of investment, but 7.1% a year for the life of the NBN is a reasonable return. I wish my back account was paying that at the moment.

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