Released on Friday, 30 August, the plan sets out the carrier’s strategy for the next four years. It predicts a total of 8.6 million installed premises by 30 June 2023. Of these, 3.3 million, or nearly 40%, will be FttN. Just 1.8 million (21%) will be FttP, the technology originally envisaged for more than 90% of connections when the Rudd ALP Government announced the project after the 2007 federal election.
With the election of the Abbott Coalition government in 2013, then Communications Minister Malcolm Turnbull switched the strategy to what he called a ‘multi-technology mix’ (MTM) comprising a blend of FttP, FttC, FttN, HFC, satellite and fixed wireless. The reasons given were to reduce costs and to complete the network more quickly.
Announcing the new corporate plan, NBN chief executive Stephen Rue said the 1.1% of NBN customers connected by FttC would soon benefit from the implementation of G.fast, a technology which enables Gigabit bandwidth over short copper connections. He said the 2% of NBN customers connected by HFC would also benefit, with the introduction of DOCSIS 3.1 technology.
Rue was asked at the press conference announcing the corporate plan whether there were any plans to improve bandwidth for the much larger group of customers on FttN. He said there were no plans within the strategy’s four-year timeline, stressing that the emphasis was on completing the network rollout and ensuring NBN Co was profitable.
“We expect 90% of FttN customers will reach speeds of 50 Mbps, and we guarantee 25 Mbps to all of them. Our priority now is to complete the rollout, which we are on target to do by June 2020. The best way to ensure we can invest in future the network will be to generate a strong cash flow,” he said.
The NBN has been widely criticised in many quarters for the low speeds experienced by many FttN customers. Alternatives such as Optus wireless broadband are growing quickly, particularly with users experiencing bandwidth problems with the NBN and others who want wireless and portable solutions, such as renters.
In view of this wireless competition, Rue was also asked whether he saw the introduction of 5G as a threat to NBN’s business model and profitability. “The two technologies are complementary,” he said. “5G has its place, but it will never be capable in the data volumes of fixed line broadband.”
He made much of the fact that the completion of the NBN rollout in a year’s time would be on time and on budget. What he did not mention was that the schedule and the budget were substantially revised by the government after earlier cost blowouts and delays.
The final cost of $51 billion is substantially higher than the initial estimate of $29.5 billion, the amount legislated as maximum government funding. The difference has been made up by government guaranteed debt funding, which has had the effect of not changing the cost of the project in the Federal Budget.
The final completion date is also something that is sleight-of-hand. It is one year earlier than Labor’s initial proposal for an all-FttP rollout, which means that Turnbull was correct when he said the multi-technology mix would be faster to implement. But it is two years later than he promised when the Coalition was elected in 2013.
Rue said when delivering the NBN Corporate Plan that the completed network would ensure Australia moved from the bottom 10 to the top 10 of the OECD and its broadband speeds, quoting data from consultancy Ovum, which published a report on the NBN (commissioned by NBN Co) in April 2019. That report concentrated on the benefits of broadband to Australia and did not contain any odious comparisons with other countries.
(For the record, the OECD currently ranks Australia 23rd out of its 36 member countries for the speed of its fixed broadband. Australia is also ranked dead last in the OECD in broadband affordability. These are not impressive statistics.)
NBN Co is justified in congratulating itself for efficiently executing government policy. The project has met its delayed timeframe within its increased budget. It has successfully implemented the technology mandated by the government.
But that is not the issue. The big debate over the NBN will never be resolved. Like climate change, it has become ideological. Whether Australia would have been better off sticking with Labor’s initial FttP plans or whether the Coalition’s switch to a "cheaper, sooner" multi-technology mix was a better approach is a matter of opinion, not fact.
What is a fact is that Australia continues to slide down measures of global fixed broadband speeds, declining from 55th last December to 60th in the most recent Ookla Speedtest Global Index. Australia does very well in mobile broadband, rated 2nd after South Korea, but NBN Co itself says fixed broadband is more important.
The NBN is a fact of life. The multi-technology mix is the hand the NBN — and the Australian population — have been dealt. We now have it straight from the horse’s mouth that If you are on FttN there is no prospect of any improvement in your broadband speeds for at least four years.
Where will Australia sit then in the international broadband rankings?