A Summary And Analysis Of Labor's New NBN Plan

The National Broadband Network (NBN) has been a sore spot for the Federal Government. The Coalition swooped into power in 2013 and wasted no time in dumping Labor's much-loved fibre-to-the-premise (FTTP) broadband plans in favour of the cheaper and slower alternative: fibre-to-the-node (FTTN). Worst. Idea. Ever. With an upcoming election, the Opposition has promised to bring back a FTTP NBN. If you don't want to read the 33-page document that Labor released (which is mostly full of political rhetoric) here's a summary of the main points and we take a closer look at some of the details.

FTTN is inadequate. Plain and simple. With its dependency on copper cabling, it's a short-sighted model that doesn't accommodate for future internet needs and dooms a large portion of the Australian population to archaic broadband speeds. This isn't just about streaming the latest episode of Game of Thrones in high definition, and anybody who brings this up as an argument against FTTP is sorely misinformed. This is about the current Government blowing money on a broadband network that relies on ageing technology that is inefficient and costly to maintain.

We've previously lamented that it is unlikely that any government could go back and implement an FTTP NBN; we're in so deep now. A viable option would be fibre-to-the distribution point (FTTdp) using skinny fibre, which sits in between FTTN and FTTP in terms of speed and cost.

But Labor has come out this week with a big promise: the party, if elected into Government, will basically 'unfuck' the NBN. Labor said it can't exactly resurrect the original FTTP NBN, but it can bring back FTTP as the main technology for the broadband network. But wait, there's more. All this will be done at no extra cost to taxpayers.

A lot of Labor's 33-page NBN policy document, as you would expect, is dedicated to blaming the Coalition government for screwing things up, but Labor elaborates on how it plans to revive an FTTP-based NBN. Here's a summary of the main points, which all hinge on Labor getting elected:

  • Labor will stop rolling out FTTN across Australia after the current pipeline of work is complete and will, instead, bring FTTP to an additional two million premises.
  • In its first term in Government, Labor will commission Infrastructure Australia, an independent statutory body, to develop a plan to outline how and when areas of Australia that are already on FTTN can be transitioned over to FTTP.
  • Deadline for the initial rollout of the NBN will be completed by 30 June 2022 (same time as Liberal promised to deliver their version).
  • Total cost of the NBN will be capped at $57 billion.
  • Definitive agreements with Telstra and Optus for the use of their copper infrastructure will not be renegotiated. Too much money has already been spent on these agreements and Labor has no choice but to let them run their course.
  • Rollout of fixed wireless and satellite networks continue. Some areas that were previously marked for satellite will get FTTP instead. Greenfield estates will get FTTP on the get-go.
  • FTTdp received an honourable mention as a viable way to bring fibre directly to more homes at a lower cost but Labor has not detailed concrete plans on using the technology in its policy.
  • Wholesale prices on the NBN will be the same or lower.
  • Minimum taxpayer return from the NBN will jump from 2.7 per cent, under the Coalition's policy, to 3.9 per cent.

The cost of Labor's NBN plan, at $57 billion, is slightly higher than the Coalition's current NBN model, but Labor is stressing that it will be getting additional funding from private sector investment to offset cost and is relying on an independent board to make sure the new FTTP NBN stays on budget. The cost of the NBN has always been a sore point for the infrastructure project. When Labor first announced the original $49 billion NBN, the Coalition was up in arms about how expensive it was and that FTTN would halve the cost. Now its own FTTN-centric NBN has doubled in cost to $56 billion.

While Labor's NBN plan sounds fantastic on paper, political promises, especially ones made during the election period, must be taken with a grain (more like a sackful) of salt. Don't forget the Coalition also made promises of a broadband network that would be delivered more quickly and cheaply than the previous iteration but has ended up with cost blowouts and delays.

Also, bear in mind that this new NBN will not be the same as the original $49 billion version that the Kevin Rudd Labor government introduced in 2009 where 93 per cent of Australia would receive FTTP. The current Labor NBN proposal only promises to commission Infrastructure Australia to develop a plan to transition the tens of thousands of homes that already have FTTN to FTTP. So as of now, there is no solid details of how and when that is going to happen.

What is encouraging is that Labor will be able to make use of some of the work that the previous Government had done for the NBN:

"NBN Co retains a fibre-to-the-premises design and construct capability, already has IT systems in place to manage fibre-to-the-premises, already has construction contracts in place which accommodate fibre-to-the-premises with no volume restrictions, and already has Definitive Agreements in place with Telstra that are “technology-agnostic”, subject to the HFC constraints already identified."

The Coalition has yet to respond to Labor's NBN policy plan, but I'm sure we'll be hearing from them soon. (Update: The Coalition has issued a brief response, pretty much saying Labor is lying and over-promising on this new NBN proposal. You can read the transcript from the Minister for Communications Mitch Fifield here.)


Comments

    I've been voting for Labor most of my life and I won't be changing now, but this constant rhetoric about how bad the other is from both camps has to stop. When the dust clears and the next iteration of Govt shows itself in the light of day, we will still have a massive economic debt and not enough taxpayers to shoulder the burden. The NBN is a fundamental necessity, without it, we cannot compete on a global scale.

      I agree. The finger pointing really needs to stop and both parties should just commit to getting the job done. But, politics...

      I guess we're now playing the game of "Who can clusterfuck it a little bit less..."

        The spooky thing is I actually had to keep the Coaltion's pamphlet "Labor's Mess" next to me to reminding myself I wasn't accidentally reading the wrong document.

        Both documents are so close to nit-picking the other that it's almost impossible to tell them apart.

          Yep, this has been the most pathetic election campaign I've ever seen. We are truly in the most infantile era of politics ever.

      Sad thing is, if you look past all the finger pointing and politicking, there really isnt much either party could have done to avoid the deficits we've had. Maybe they could have been mitigated a little, but it wouldnt have been much.

      And it stems back to the golden era of mining, and the GFC. Treasury made forecasts, budgets were based on those forecasts and spending was committed to. When those forecasts were woefully short of expectations, it was too late to back out.

      When it happened year after year after year, for one reason or another (exports dropping, China slowing, resources tanking), it just made the problem worse.

      But both parties relied on forecasts from Treasury that ended up being wrong. The flipside is they also got it wrong with the mining boom in the first place, which led to record surpluses.

      Most people dont understand why deficits and surpluses happen. It isnt because of prudent spending by the Government of the day, most of the budget is already committed to, its largely down to how accurate the forecasts are.

    Labor created the NBN, then totally screwed up delivery. Then Abbott arrived and double screwed it. Turnbull had a golden opportunity to fix it, and show some vision & leadership (like with the environment, gay marriage etc) but timidly succumbed to his right wing. Shorten looks more like a leader every day, BUT I do not believe his costings....

      I was very surprised to hear from the beginning that the plan was to start the NBN in rural, remote locations first. Wouldn't a good business model be to start in the area of highest return? If NBN was installed in major cities first, the uptake would be much higher, ensuring the ROI sooner.

      I completely understand that those in rural / remote locations are ones in most need internet connections / high speed internet, but on paper it doesn't make sense.

        I guess the issue is that if you installed fibre in city centres first, that means you do the rural areas last. If the government changes and says "Oh well, we got 90% of the way there, and the last 10% costs the most, so we'll save money by cutting it!" then those rural areas *still* get nothing.

        The logic is that competition stands on its own two feet in the major cities. You only need to look to your closest exchange to find iiNet, TPG and AAPT infrastructure - whereas the regional areas have only Telstra.

        It's also easier to dig up roads in the country than it is in the cities, so while the distances are greater, the costs aren't necessarily much higher. Also, uptake rates should be higher in the country, (not lower), because there are no other alternatives for cheap, fast Internet. (ie. Optus and Vodaphone 4G)

        Of course, the reality is that it gets deployed to the swing electorates first.

    I would hardly call the Coalitions FTTN/MTM plan the "Worst. Idea. Ever."

    For sure, its silly and not the best option.... but its better than the coalitions model prior to mid 2012 of "shut the whole thing down".

    While I would much prefer the FTTP model, any NBN is good for me. I currently sit in an area where my only option is to purchase a service provided by Telstra Wholesale as there are not available ports in my exchange for ANYONE other than the national carrier. I cant get a naked DSL service, I pay more than people on exchanges who live only 200 metres from my place and I have no access to HFC cable of any persuasion.

    As a result, an NBN in any form opens up a world of possibilities for me in choice of provider and the type of service i could have.

    It just could be a better option if they didnt pursue the MTM model.

      That said, it was really stupid to not roll out FTTN POI's that were capable of having a user-pays upgrade to FTTP by replacing the POI-Premises copper with fibre on a per-subscriber basis.

        I have to agree with you there @xpx. I had done some initial calculations that suggested that if i was able to pay around $3k for a FTTP connection (instead of FTTN) I would recoup most of that in cost savings by being able to work from home 2 days per week instead of commuting.

        Additionally, it would improve the capital value of my property AND be a partial tax deduction for work related expenses.

          .... but you can. Go to NBN website and sign up for the broadband choice program. You can upgrade from FTTN to FTTP under the current plan.

            Yes, but no. For $330 you can get a price estimate. For an additional $330, you can get a firm quote. So, for $660 plus $x, you can have fiber run from the exchange to your premises.

            This means for most people, the amount of fiber the quote will cover installing is not the 300 meters or 1 km to the nearest node, it is the 1km - 4km to the nearest exchange.

            If the FTTN nodes had been built to allow for subscriber fiber connections, NBN Co could have gone with a pricing model along the lines of $1,000 plus lead-in costs.

    So what does this mean for areas that are going to be connected via HFC under the current plan?

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