Australia’s National Broadband Network (NBN)


The National Broadband Network (NBN) in Australia was touted as the next big thing in the roll-out of a nationwide broadband in Australia as Australia’s Federal Government drummed up support for this new initiative – it was definitely exciting times for Australians. However, this project dubbed ‘‘the biggest infrastructure project’’ in the country at that time has not lived up to the hype and expectations the Liberal Government promised.

The Liberal Government built the NBN the way they did due to the belief that under the Labor government, the NBN was poorly managed and was in their words, ‘‘the most poorly managed infrastructure in Australia’s history’’ as they only spent $6billion in four years to connect a paltry 51,000 users to the already built network.

For the Liberal Government, they stated that they were going to ensure that over 50,000 homes a month will be connected in comparison to the figure of the previous Labor Government.

Despite the figures that the Liberal Government have put out, as is the case with most government policies, it has been marred with both negative and positive issues such as budget, cost and how the network was built. In this article, I will be addressing and providing answers to the issues which have been a source of concern to Australian’s and whether this so-called infrastructure project has failed Australians.

The National Broadband Network (NBN) Plan

The National Broadband Network’s (NBN) Plan was to ensure that Australians were connected to high-speed internet, serving both private homes and businesses. There has been a lot of government expenditure to ensure that the investment to provide high capacity data communication across the Australian nation yielded some results.

However, politics has come to the fore in the quest to help improve the lives of Australians as the NBN has been politicised with successive governments being criticised about the lack or failure of taking the right actions to ensure that the NBN works.

Labor Government vs. Liberal Government

Politics is about policies with each party laying out its plans and how they aim to achieve them. In the case of the NBN, this wasn’t any different as the Liberal and Labor Government didn’t only disagree ideologically, but also how they felt the NBN policy should be implemented and on issues such as Retail Pricing, Installation, Speed and Rollout Time.

The Labor Government initially released the plan for the NBN in 2009. In a carefully and well laid out plan, it pledged that it was going to deploy fibre-to-the-premises (FTTP) to over 90 percent of homes and businesses in Australia.

With a proposed budget of $15billion dollars, this figure soon grew close to $43billion dollars and in a remarkable turn of events, a new government was ushered in around 2013 – The Liberal Government. They had a promise to achieve the same goal, but at a much cheaper rate – as a matter of fact, $15billion dollars less than the Labor government.

The first action taken by the new Liberal Government was to order the NBN to abandon the fibre-to-the-premises (FTTP) and roll out a cheaper alternative called ‘‘multi-technology mix’’ relying mainly on the pre-existing copper and Hybrid Fibre Coaxial.

This change was referred to as a ‘‘colossal mistake’’ by the CEO of NBN Co.; Mike Quigley.

This brings us to the first point in the changes that were brought about by both governments in respect of the cost of the NBN.

Firstly, the Labor Government was going to spend a lot of money to achieve the goal of modernising Australia’s broadband network, making it one of the fastest in the world. This was clearly an advantage for the Australian people as they would’ve benefitted from the project had it been completed by the Labor Government. On the other hand, there were issues which were being raised such as the majority of the funds coming from the taxpayers or part of it being funded by the private sector which was the plan.

The Liberal Government had other plans when they were elected in 2013, especially regarding the cost of the project. One advantage would’ve been saving more money by spending $15billion dollars less.

Secondly, the Labor and Liberal Government differed on the retail pricing of the NBN. The Labor government based the pricing of the NBN on the speed and download packages while the Liberal Government based their on wholesale pricing of the NBN by setting a price cap by the competition regulator.

Taking a look at the stance of both governments, we can say that they are both good ideas. However, it would be erroneous to look at the retail pricing without considering the first issue which deals with the cost.

We know that there’s a link between the price of a commodity and the cost expended in producing such commodity. If we apply this same principle and look at the cost either government was going to spend in ensuring that the NBN functioned, it is safe to say that in weighing the pros and the cons of either government, the Liberal Government would be best suited for reasons such as having a regulatory body to cap prices and not allow arbitrary prices being fixed or by the forces of supply and demand.

Thirdly, the Labor and Liberal Government differed on the issue of installation. For the Labor government, they preferred the FTTP mode of installation, broken down into 93% of premises having a free-fibre-to-the home installation and 7% having a free fixed wireless and satellite installation.

On the other hand, the Liberal Government opted for a free fibre-to-the-node (FTTN) upgrade with 71% having no new installation, 22% having a free-fibre-to-the-home installation and 7% having a free fixed wireless and satellite installation.

This simply means that for the Labor Government, it wanted to ensure that 93% of Australians living in the upstream will have the FTTP network delivering speeds of about 100MBs download stream and for the remaining 7% that lived in the remote areas or in towns which have less than 1000 households, having connections of around 25/12MBs.

With the FTTN model already underway, the Liberal Government decided that 71% of houses will be connected to the FTTN, 22% of premises which were already in areas where the NBN was constructed were going to be scaled back and the remaining 7% will remain the same as the previous policy of the Labor Government.

Looking at both policies of each government, we can see that the Labor Government had only one means to ensure that the NBN worked, while the Liberal Government had what was referred to as a ‘‘multi-technology mix scenario’’ which we could say has advantages.

However, one area which is potentially worrisome when looking at the policies of both governments is that for the Labor Government, they planned to spend a lot of money ensuring that the NBN worked. However, the Liberal Government decided to save money by reducing how much they spent on building this infrastructure which looked more sensible.

On closer look, we can see that not so much is saved.

From recently released figures by the National Broadband Network (NBN), in its half-year results, we can see that to save costs, the FTTN is a good option despite being largely inferior to the FTTP in terms of reliability and speed.

Nevertheless, the cost per premises and the amount saved depends to a large extent on the location of the person, which means that the cost saving from changing from the FTTP to the FTTN is not justifiable.

According to Gibbs et al., this model of the Liberal Government ‘‘challenges the public provision and social benefits of a universal communications infrastructure.’’

Has the NBN has failed Australians?

The NBN is not only viewed politically, but also as a personal issue as Australians reflect on the effect it has on their lives, or whether it has failed them or not. It might be fair to state that the NBN has not lived up to its hype. However, this doesn’t necessarily mean that it has failed Australians in general, but possibly a section of them
Nevertheless, it is evident that some successes have been recorded since rolling out the NBN.

For the section of Australians who believe the project has failed, issues such as the inability to deliver the level of connectivity promised to Australian households, the speed of the network and the pricing constraints are cited.
It seems like the CEO of NBN Co.; Mike Quigley was right when he referred to this change as a ‘‘colossal mistake’’.

For the other section of Australian’s who believe that it has It has had some successes, they look at issues such as the roll out of the NBN to over 2.5million premises that are said to be connected to the network which has doubled over the last 24 months.

Despite the policy setbacks, the NBN can still be successful and this can only be achieved when one government embraces the good policies of the other and look beyond their ideological differences.

Author: Kenneth Chijioke-Keme

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