Friday, 15 March 2019 04:51

Labor says fixing NBN will be a long process Featured

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Michelle Rowland: "If cash flow is healthy you can invest more, be flexible on prices and provide services that the market would otherwise not deliver." Michelle Rowland: "If cash flow is healthy you can invest more, be flexible on prices and provide services that the market would otherwise not deliver." Supplied

The Australian Labor Party will not make any quick changes to the rollout of the national broadband network if it comes to power in the Federal Election later this year, but will take a "responsible" approach to the project.

Shadow Communications Minister Michelle Rowland told the Sydney Institute, a current affairs forum, on Thursday night that the multi-technology mix adopted by the Coalition Government in 2013 had made the rollout more expensive.

"The irony of this situation is that the Liberal Party promised its multi-technology mix would be faster and cheaper, yet we now have a business model that is in more need of cash flows — but has less capacity to generate it because of inferior technology and higher costs," she said, according to a transcript of the speech provided to iTWire.

When construction of the NBN was begun in 2009, Labor was in power and it envisaged fibre being rolled out to the premises for 93% of the populace, with the remaining 7% to be supplied with connectivity through either wireless or satellite.

The rollout became a political issue when the Coalition Government, that took power in 2013, decided to change the technology of the network to what it called a multi-technology mix.

The MTM includes fibre-to-the-node, HFC cable, satellite, and wireless, apart from fibre-to-the-premises which is being provided only to new dwellings.

As the MTM plan and the connections provided have come under increasing criticism, fibre-to-the-distribution-point, which considerably reduces the copper lead-in to premises — what the network builder, NBN Co, calls fibre-to-the-curb — has been introduced as well.

The rollout of the NBN is scheduled to be completed in 2020.

Rowland said Labor would not promise a quick fix, nor would the party make promises in haste that it could not keep in the long term.

She said improving the cash flow at the NBN Co, the company rolling out the network, was a problem over which the party had been spending many sleepless nights.

"If cash flow is healthy you can invest more, be flexible on prices and provide services that the market would otherwise not deliver," she added.

"The decisions in 2013 to change the technologies used on the NBN has had an unfortunate impact on cash flow.

"Relative to the original fibre plan, the multi-technology mix costs more to operate and requires higher capital expenditure. This is due to copper and HFC technology producing more faults, requiring more technicians and consuming more power."

The NBN Co has said for a long time that it needs to increase the average revenue per use to $52 in order to break even. But in February, when it announced results for the second half of the fiscal year 2019, the ARPU stood at $45.

The company has been bleeding red ink since it started the rollout. For example, for the full-year 2018, NBN Co made a loss of $4.1 billion, slightly less than the loss of $4.24 billion for the full-year 2017, but much more than the $2.75 billion loss the company posted for the full-year 2016.

There has been much talk about a possible write-down of the value of the network, with Labor not ruling it out.

Rowland said the outcomes she would like to see for the NBN, six years hence were:

  • the NBN should be the network of choice for Australians;
  • it should be delivering a good experience for consumers and businesses, with customer service getting better and more responsive over time;
  • Australian small businesses should be benefitting from stronger service standards that reduce the downtime they experience.
  • NBN services should be affordable and delivering great value for money, with 5G competition helping to keep entry-level prices low;
  • more Australians should be experiencing the benefits of deep-fibre connectivity, including greater speeds and reliability;
  • regional Australians should be enjoying an improved quality of life as a result of opportunities enabled by the NBN; and
  • the NBN should be well on its way to becoming a brand that Australians trust and respect.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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