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Turbulent times for Australia's National Broadband Network

By Stuart Corner, Mon 15 Dec 2014
FYI, this story is more than a year old

The past few weeks have been a particularly hectic time in the always turbulent history of Australia's National Broadband Network.

The vision under which the NBN was conceived by the former Labor Government of a fibre to the home network serving 93 percent of premises complemented by fixed wireless and satellite for the remaining seven percent was scrapped by the Liberal-National Coalition Government that took over in September 2013.

Instead, it tasked NBN Co, the government-owned company created to built and operate all three networks under a monopoly wholesale model - with cobbling together a hotch potch of FTTH, fibre-to-the node (FTTN) and hybrid fibre co-ax (HFC) networks to replace the FTTH network.

If that were not challenge enough, NBN Co is now facing the threat of being exposed to competition by a government ideologically committed to the free market and minimal regulation.

The breakup of NBN Co was one of the recommendations in the Vertigan Review of the NBN ordered by the Government. The idea had already received support from a number of senior industry figures, including the head of the Australian Competition and Consumer Commission, Rod Simms, before the Government announced, on 11 December, its response to the review.

The Government said it would introduce reforms "to encourage a more competitive, responsive telecommunications market," and that would "complement its goal of completing the NBN as quickly as possible."

NBN is required to provide wholesale access to all its networks at uniform prices but under the new regime it will be able to set prices, subject to price caps, to "respond to competition."

The current Government has repeatedly lambasted NBN Co for its failure to meet network rollout targets and has promised that its new technologies will see more Australian consumers get faster broadband sooner. If NBN Co continues to miss targets there are suggestions the Government will look elsewhere to get those targets met.

On 18 November NBN Co released an updated corporate plan in which it committed to completing the NBN rollout by 2020 and in which it detailed the percentages of premises it planned to serve with each technology: FTTP, 25 percent; FTTN, 29 percent; fibre to the basement, 11 percent; fixed wireless, five percent; satellite three percent.

This was followed by a more detailed short-term rollout plan under which NBN Co promised to connect a further 1.9 million premises by June 2016, in addition to the 300,000 served at present. It provided a detailed breakdown by suburb but in most cases did not specify the technology it planned to use.

There remained one stumbling block to these plans: NBN Co had to secure revised agreements with Telstra and Optus. Under the original plan Telstra was to be compensated for closing down its copper phone network as the NBN rolled out and for providing access to its exchanges, cable pits and ducts for the NBN rollout.  Optus was to be compensated for closing down its HFC network completely so that it did not compete with the NBN.

On 14 December new agreements were signed between NBN Co, Telstra and Optus under which NBN Co will buy Telstra's copper network and HFC network and the Optus HFC network and use all three to deliver the NBN. Telstra will continue to use its HFC network to deliver Foxtel pay TV services.

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