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.)

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