Budget 2016: NBN Co is running out of money

By
Renai LeMay
-
159


news The Federal Government has revealed that it has put together a special taskforce to determine how to fund its modified rollout of the National Broadband Network, with the project’s costs ballooning and the public purse running dry of funds to support it.

When the NBN project was initiated under the previous Labor administration with its previous Fibre to the Premises model, it was estimated that the project would cost about $44 billion in total, although Labor’s projections at the time showed that the NBN company would eventually recoup those costs and bring a modest return on the Government’s investment.

Before the 2013 Federal Election, the Coalition had promised to deliver the NBN project faster and cheaper, through using technically inferior Fibre to the Node technology and Telstra’s copper network. It pledged to spend only $29.5 billion on the NBN, with any remaining capital to be borrowed from the private sector.

However, higher than expected costs associated with the project, especially Telstra’s copper network and the integration of HFC cable infrastructure from Telstra and Optus, appears to have thrown a spanner in the works.

In this year’s Budget statements, the Federal Government said it would provide $8.8 billion to the NBN company in the 2016-2017 financial year, including $0.4 billion moved from the previous year.

The Government noted that this level of funding was expected to exhaust its NBN contribution.

“The Australian Government has committed $29.5 billion in equity to NBN Co Limited (NBN), which is expected to be fully utilised by the end of the 2016-17 financial year,” the Budget says.

The Budget notes that the NBN company is expected to raise debt from external markets of between $16.5 billion and $26.5 billion (with a base case of $19.5 billion) to complete the rollout of its network.

However, the Budget also warns that this may not be as easy as expected, and that the Government may need to step in.

“NBN is currently undertaking the necessary preparatory work on the proposed debt raising,” the Budget states.

“In the event that NBN is initially unable to raise the necessary debt on acceptable terms, interim funding support may be required,” the Budget states.

This, in turn, could have an impact on the Government’s own underlying financial position.

“Were it required, additional Government financial support for NBN would have implications for the fiscal position, for example by increasing assets and liabilities on the balance sheet and, depending on the nature of support, could have positive or negative impacts on the underlying cash balance,” the Budget states.

To deal with the issue, the Government has tasked the Department of Finance, in consultation with the Department of Communications and the Arts and the Department of the Treasury, to seek independent expert advice on strategies to meet the NBN company’s future funding requirements.

Should the NBN company decide to cancel the NBN project, as unlikely as that would be, the cost of doing so (the NBN company’s “termination liabilities”) are currently estimated at $9.4 billion to the Government.

Notably, the NBN company’s individual directors would not be held personally responsible in such a case, with the Government having provided an indemnity liability against such a case.

Other NBN-related costs detailed in the budget include the fact that the Comcare agency needs to continue to monitor remediation activities relating to the dangerous asbestos substance found in some Telstra pits and pipes used as part of the NBN rollout.

Opinion/analysis to follow separately.

Related posts:

  1. Budget 2016: Major Police IT projects win funding
  2. Budget 2016: Major Child Care, Veterans’ IT reform projects approved
  3. Budget 2011: Govt discloses NBN equity payments
  4. Budget 2016: The Govt is kind of obsessed with FinTech
  5. Budget 2016: Tech giants in trouble as tax avoidance ramps up

159 COMMENTS

  1. Thanks to blowing it all on faulty copper and Telstra heisting it all. Fibre was much cheaper in the end.

    Liberal fascist experiments are always a failure. They are a joke.

    It is intentional. They will sell it back to Telstra soon who will gain back a monopoly.

    No chance for fibre for the next 50 years.

    I’ve already given up waiting and will have to lose my HFC access to go back to faulty telephone lines and choose different careers. I will not be able to function on telephone lines. Just to have a house not in million dollar areas where there is HFC ??

    What they have done is reckless and a crime. They robbed public money for no return.

    • They never built enough fibre to actually know if it would be cheaper. Costs were blowing out on it as well if I remember correctly. And they never even connected a single multi dwelling unit to determine costs there.

      • Your recollection is completely faulty. NBN Co’s EAC for fibre per-premises cost was within budget, and slowly dropping like what has happened in rollouts like New Zealand and Verizon’s in the US.

        And they connected tens of thousands of MDU premises, not none…

      • @frank Quigley built enough to expose the blowout (called out at the time). FTTH CPP was twice that budgeted, pretending Quigley’s CPs were intact is ridiculous.

        Coalition policy costing in tatters within months of its election. Costs continue to explode with mounting loss, asset values under spend, and delays. Conroy’s cross subsidy model, designed to keep his spend off budget, a failure. ABS should revoke its commerical investment status (obvious for sometime) and bring the spend/debt to into the budget.

        MDUs as you point out remained at service class zero until new management introduced FTTB. But everything was behind schedule.

        $29b will be sunk before 50% completion, impossible to find any comparable international upgrade (which we’re not allowed to even discuss). Govt monopoly even failing to deliver into profitable markets that would have been supplied for no cost to taxpayers by the private sector.

        ACCC report (still yet to be reported on here) shows revenue underperforming forecasts by a significant margin. Take-up and chosen speeds well below forecasts and falling. Even MTM IRR is today negative. Tens of billions will be written off by taxpayers for yet another underperforming govt monopoly and disasterous Conroy policy folly.

        Can’t say you weren’t all warned.

        • Lol Richard numbers man again. When you change the way CPP is calculated and then claim its twice as much is a bit rich. Quigley has shown his CPP figure are $500 less than the current cp16 CPP which is $500 less than what was claimed in the SR.

        • Oh Richard – it still doesn’t change the fact that it’s now running out of money and the mtm has been shown for what it is.

          Keep supporting it – it shows how out of touch you really are.

          on every metric it’s a failure.

          29.5 billion for 25mbs by 2016

          • He must go down with the sinking MTM ship … after all Captain Richard told us when MTM was first announced “it’s as if he had been commissioned to write it”

            We laughed then and said FTTN was retrograde and would set us back… going from FttP which was progressing… to backwards copper based FTTN.

            But MTM has not only set us back, it has now been proven beyond any doubt, to be the biggest complete construction disaster in our history.

            Regardless, it is now delicious, seeing the desperate measures such people will go to to deny actuality just to prop up their own shattered egos…

          • WRONG again alain… but I see you can reply to me, but only when I don’t ask those loaded questions FFS… ROFL

            MTM has not only set us back, it has now been proven beyond any doubt, to be the biggest complete construction disaster in our history.

            Got it now?

            MTM = THE BIGGEST complete construction disaster in our history.

            Enjoy the facts to prove it so…

            http://m.smh.com.au/business/nbn-worth-27-billion-despite-56-billion-construction-cos t-says-pwc-20160217-gmwbd5.html

            You’re welcome

          • Devoid, stop ignoring the tens of thousands of kilometers of nationwide fibre transit network and the LTSS satellites that were paid for using most of that 6 Billion – by ignoring these you merely confirm that you are a tiny minded, dishonest, partisan, lazy LibTroll!!

          • “More than $6 billion was spent over four years to connect just 51,000 users to Labor’s network.”
            LOL as opposed to $25b spent over two years to connect 30,000 users to FTTN.

          • You need to update yourself, the Coalition MtM is not just rolling out FTTN, that’s what MtM means, oh and just FTTN RFS was 120,000 in five months but you know that.

            You need to constantly quote incorrectly to create a rollout problem where a problem in terms of meeting published targets doesn’t exist.

          • @ alain.

            Since you are asking as you obviously don’t know…

            MTM = FRAUDBAND (Coalition’s description of the majority part of their network) + FAILED (your word) HFC plus pretty much the last mobs leftovers (which are the parts doing ok)…

            You’re welcome.

          • Err, but your…

            “as if I’d been commissioned to write it”

            MTM figures and timeframes have blown out disastrously Richard…

            But of course that’s totally acceptable now.

          • No Rizz it’s Conroy fault for the blowout of the MTM. It’s Conroy fault that the private sector was never going to invest in infrastructure.

          • Of course Jason, right you are, how silly of me…

            The wingnuts best friend… blame the others.

        • Show me where the current blow out costs are due to the FTTP portion of the rollout.

          Once again, Lies and Mistruths.

          • Show me where I’ve claimed post-2013 blowouts due to FTTP?

            FTTHers in denial about Quigley cost blowouts, actually acknowledged by Quigley himself (of course after he was booted and only exposed when he was talking about MTM costs).

            Quigley in a PDF retort to MTM cost blow-outs finally exposed NBNCo internal costings for FTTH was CPP $3900. Worth noting I can find no evidence NBNCo ever achieved that figure in actual deployments (lowest over $5k at scale).

            Amazingly the squealers believe half or less CPP (CP), an order of magnitude rollout improvement (WP), speeds matching demand from actuals (ACCC) and capturing majority revenue results in greater cost to taxpayers.

            But as the fanboys proudly claim; ignorance of tech, financially innumerate, forecasts = actuals. Called out years ago, strawmen & bile all they have to throw back.

          • Richard as usual you conflate delays with cost blowouts, under Quigley there were delays but NBN Co was financially on track as proved when Lord Light Bulb had the NBN books audited!

          • Richard is probably technically right, he possibly never did blame FTTP by name…

            He instead blamed Quigley, NBNCo, Conroy, Rudd and Labor’s and their network…

            Which was of course err, 93% FTTP… and fully promoted, as if his own creation, the unmitigated disaster known as MTM.

            *sigh*

          • Lol Richard
            Cost blowout when you change a metric of calculation for CPP and Quigley uses that same calculation is not a cost blowout.
            CP13 LNDN $1731 CC $1375 = $3106
            Plus pits $755 = $3861
            CP16 LNDN $2080 CC $1552 = $3632
            Plus pits $755 = $4387

            The fact you like your hero Turnbull claiming to completely different figures as the same like your quote above “FTTH CPP was twice that budgeted”. When it was budgeted and wasn’t twice the cost as you and Turnbull has tried to claim.

          • Estimate at completion are NOT actuals (see CP13-16p59). Exactly my point above.

            Your claim destroyed by your reference:

            FTTP Access Network (aka LNDN) budgeted CAPEX $11.4b (CP13-16p51) for 10m premises or $1140 pp.

            FTTP Customer Connect (70% take-up) budgeted CAPEX $9.8b (CP13-16p62) for 7m premises or $1400 pp.

            NBNCo budgeted FTTH CPP $1140 + $1400 = $1540. Quigley’s actual NBNCo internal costing was $3900 (his PDF).

            Most understand costs blowouts that size (double) on that scale (7&10m) will significantly alter peak funding if increased revenue can’t offset (actuals revenue underperforming; gulp).

            Several years and they still don’t understand the basics.

          • Lol Richard let’s amuse you was apparently Quigley doesn’t know what he is talking about.

            But then thank you for priceing UG right as your own figures to Quigleys $3900 cost is also wrong. It’s not $12B difference it’s about $4B difference as you are missing one important cost to try and make your claim which you have factored in.

            As you are a numbers man one can only assume it’s on purpose not adding in the $755 ducts and pits which Quigley has to his $3900 to make your claimed cost blowout even higher than it really is.

            So then a $4B blowout cost as you claim pails in comparison to the $27B on the MTM

      • “They never built enough fibre to actually know if it would be cheaper. Costs were blowing out on it as well if I remember correctly.”
        As others have probably already mentioned, FTTP was in ramp up stages, during which the speed of rollout increases whilst simultaneously CPP lowers. As Project Fox illustrated.

        If the Liberals’ criminally paid-for SR13 is to be believed, the cost of the FTTP rollout was $10b more than forecast by the previous Labor review. The project was running two years behind after 6 years of governance.

        In 2 years of governance, the Liberal plan was $16b more than forecast (CP16), and 6 months later it is said to be more than $40b over forecast (Hockey). Their plan is now running four years behind.

          • Is that the best you can do?

            Time to disengage from DH mode again alain.

            You’re welcome.

          • Hey.. +1 takes a long time to type Rizz… No way you could have been that quick.. I mean 2 whole minutes… surely can’t just be a coincidence that you guys were both posting at Lunchtime…

          • Indeed Woolfe.

            But let’s be too harsh on poor old alain.

            Perhaps empathy, compassion and plain old pity is more apt for one so misguided, devoted and infirm :)

        • yeah its really only in the ones which don’t have adequate ducting and the like where they ‘need’ to use FttB as the existing copper is the only thing running into each unit.

  2. Yay! The “better” government couldn’t do it any better than the previous one… Great job…

  3. yeah, money is running out……

    but we can still spend $50b on submarines we don’t need and another $35b on F35’s we don’t need.

    good one Morrison, I’m sure your pollies pension is safe, unlike that of the general population! That $1.6m limit for everyone else is only about 8 years of taxpayer funded pension for you. Does YOUR pension cut out after $1.6m has been paid to you?????

  4. A review on the future of the NBN, commissioned by the neo-liberal cheer squad otherwise known as the Liberal Party of Australia?

    If it doesn’t recommend immediate privatisation to solve a ‘budget emergency’, I shall be extremely surprised…

    • It seems obvious, doesn’t it… but you know, they have actively surprised me with just how BAD they chose to mismanage this. Everyone knew it would be bad. But THIS bad?

      There’s still room for more unpleasant surprises. Worse than privatisation. I can’t think of them, but they surely exist.

      • I’m surprised its surprising people.

        When you can’t narrow down your projected costs to even a simple $1 billion there be rather nasty warning signs right there.

        Actually the worst is alluded too in budget (hence the special committee). NBN stops (which is basically unsaleable only going to get scrap prices) and Government wears $9b in red ink on the budget.

        Being responsible for $9B budget blow-out would be such a political boon for Labor for years its no wonder LNP is panicking!

        • It would only be a boon if anybody reported on it or cared. Because it’s a Liberal blow out, everyone is happy to accept that it was because of Labors ‘mess’ they left behind.

          • yeah that is the really sad thing I guess. NBN might screw us once if it goes really bad but MSM is doing that constantly!

            Labor NBN MSM coverage vs Todays … one reason I generally avoid MSM entirely as much as possible these days.

          • Indeed. Even ABC can’t be held to account for their ‘coverage’ any more. It’s a sad state of affairs when The Project does better reporting than auntie ABC!

  5. This was entirely predictable, and was predicted.

    The MTM model has reduced revenue raising capability due to lower speeds being available to the users willing to pay for high speeds.

    The ability to raise private debt is compromised due to the increased OPEX of MTM and reduced usable lifetime.

    We saw this mess coming, it is a pity the government with all their experts, advisors, consultants etc they paid 10’s of millions of dollars couldn’t see this coming.

    • I wouldn’t say they couldn’t see it coming. More like they chose not to publically consider the possibility.

    • @cw ACCC data shows actual TC-4 chosen by customers (weighted avg):
      FTTH 33mbps
      FTTB 33mbps
      FTTN 28mbps

      Revenue differential (where it exists) is swamped by CPP differential. Also note the above actuals are well below forecasts in DC’s senate estimates link.

      Demanded speeds and revenue capacity well below predictions (and falling). Rollout premises passed a fraction of forecasted, FTTB/N looking like it’ll miss EFY 500k unless massive 2 months.

      It’s game over; all models a failure. Conroy’s FTTH losses would be even greater.

      • Disingenuous statistical correlation justifying flawed conclusion. You can’t change *the whole environment* and then point to a single metric and claim it is causal. You also can’t mix everything together and use a mean average when you need to understand proportions. What you’re doing is data manipulation to justify your biassed conclusion. ARPU for FTTP customers is *higher* than predicted in original NBN Co’s modelling, that’s just a fact. The largest impact on ARPU comes from the smallest group – the highest tier customers. As a proportion of total customers they aren’t statistically significant, but their impact on revenue is disproportionate. Therefore using the number of customers averaged out is a deliberate misinterpretation of the data, because it wipes out the impact of that small proportion that has the greatest impact on profitability.

        That’s like saying cancer has no effect on human health because the average of human cells contains no significant number of cancer cells. But it only takes a tiny proportion of cancer cells to kill a person.

        You seem desperate to make rational arguments Richard, yet at every turn you cherry pick facts and manipulate statistics to suit your argument. That can only lead one to the conclusion that you haven’t arrived at your opinion based on evidence, you’re trying to use carefully selected evidence to support your opinion. Which makes everything you write utterly worthless, because it is not genuine – it is deceptive manipulation.

        Ergo, you are a worthless troll.

        • UG, this is fairly normal for Richard, it’s the only way he can make the facts fit his ideology.

        • UG,

          ARPU for FTTP customers is *higher* than predicted in original NBN Co’s modelling, that’s just a fact.

          Explain with links why this is a ‘fact’.

          The largest impact on ARPU comes from the smallest group – the highest tier customers. As a proportion of total customers they aren’t statistically significant, but their impact on revenue is disproportionate.

          Please explain with published statistical facts how you reached this conclusion?

          • Devoid, do your own bloody research!

            On second thoughts, dont bother, it’d be worthless!!!

          • It’s not a fact, exposed in every AR and the ACCC report released last week (that can’t be discussed here).

            Your knowledge of statistics is exposed, you don’t think weighted averages are relevant? Speed isn’t correlated with revenue (what do you think AVC & CVC are)? Largest ARPU impact is from highest tiers despite smallest group (all 65 users)?

            Love the +1 from the innumerate. Rational arguments lost on those that believe any of the comical musing above.

          • Oh the bile *sigh*…

            So how’s that MTM plan of your’s going Richard?

            Rhetorical we all know.

            You’re welcome.

          • Actual ARPU FY 2015 – $40
            Estimate CP 2013 – $36
            Estimate MTM CP – $29

            Source:
            Actual ARPU: NBN Co Annual Reports FY2013, FY2014, FY2015
            NBN Co Corporate Plan, June 2013, Page 100
            Coalition Plan for Fast Broadband, April 2013, page 23

            $4 greater ARPU on a rollout that was at that point ONLY the components of the original rollout plan. The original ARPU was developed on a theory of 50% on the 12 mb plan, and the rest on 25mb and above plans.
            Actual is 33% on 12 mb plan the rest on 25mb and above.

            Source:
            nbn-half-year-financial-results-2016-report.pdf

      • “It’s game over; all models a failure. Conroy’s FTTH losses would be even greater.”
        As disproven by history:

        If the Liberals’ criminally paid-for SR13 is to be believed, the cost of the FTTP rollout was $10b more than forecast by the previous Labor review. The project was running two years behind after 6 years of governance.

        In 2 years of governance, the Liberal plan was $16b more than forecast (CP16), and 6 months later it is said to be more than $40b over forecast (Hockey). Their plan is now running four years behind.

      • So.

        The NBN was always a long term plan. They merely needed to cover the cost of building and provide ROI. Which they were doing adequately, based on an ARPU higher than estimated for the portion of the network that was the original plan.

        That extra speed allows for future growth trends, which I might point out we are currently seeing, at almost no cost initially, and upgrades at endpoints in future.

        Your point as always is invalid, and filled with the same lies and misinformation you always provide.

        You prove only your own worth here.

      • Partially valid, but you see merit in comparing CPP where there is no merit. Higher CPP, especially when it is off-budget government expenditure, is not important when the rewards are colossal, as they are.

        (‘Partially’ refers to observations of current rollout)

        • Well the copper knuckle draggers are only claiming CPP price now because they can’t use peak funding like they did claim with the SR.

        • Increases is cost irrelevant? This site is hilarious (same ridiculous comment made by Renai).

          • Richard are you still failing at comprehending the purpose of national infrastructure?

    • “The MTM model has reduced revenue raising capability due to lower speeds being available to the users willing to pay for high speeds”

      please advise us what the speed distribution is on ftth only. I think you’ll find those with access to higher speeds still chose lower speeds.

      • You missed the point, and misread it.

        “The MTM model has reduced revenue raising capability due to {lower speeds being available to the users willing to pay for high speeds}”

        Read the section in the braces (curly brackets). If you can’t get higher speeds, why would you pay for it. Example: you sign up for FTTN on 100/40, but you can only achieve 45/15. Would you continue paying for 100/40, or would you downgrade to 50/20 (if available), or 25/5 (if no 50/20)? That wouldn’t exactly be by “choice”. You would be doing it because it doesn’t make financial sense to keep paying for a higher speed service, and getting less than half that speed.

        Yes, people on FTTP have still chosen lower speeds, and I’m not debating that part..

        • Chris,

          Yes, people on FTTP have still chosen lower speeds, and I’m not debating that part..

          Good to hear, but it is a key point that FTTP fans prefer not to acknowledge exists, the point is a cheaper and faster to deploy MtM rollout will meet the speed tier demand .

          • How many FTTN users actually want 100Mbps oh wise one?

            Only 16% of FTTP users want it.

            Do we built a national fixed line infrastructure for the overwhelming majority or do we spend multi billions more and slow down the deployment to a snails pace to build infrastructure for a minority?

          • Lol devoid it’s not how many may want but how many may choose. So far only 7% of FTTN customer have chosen 100Mbps. But when you can’t get it you can’t choose it can you.

            It’s already at a snail pace as it is devoid your point is

          • Oh FFS. Those 16% (using your figure) pay for half the network that the other 84% are using. Less than 1% would be on 1000mbps products (if they could be) but they have the equivalent revenue of *several hundred* customers on 50mbps. By providing the possibility of those speeds and having premium products you allow those who can afford and justify them to pay for most of the network.

            Your argument also avoids a key point – if you could build two networks for the same cost, would you build the faster one that will last longer, or a slower one that will require upgrades quite soon? You’d be an idiot to build the slower one, right? If they cost the same? Now what about if the faster option cost less to build? The slower option is kind of in ludicrous territory…

            Now, let’s address the question of *should* it be done. Should you build a network that costs tens of billions that the government could be using elsewhere? Now, obviously that is a quagmire, hence the raging debates around the issue. But those debates and people like you are (again) avoiding a key point that makes it an entirely different question – should such a network be built if it costs the government *nothing*? Wait, what’s the catch? It can’t cost *nothing*! Someone has to pay. Yes. Customers. But not by making them pay more than they can afford, in fact by paying slightly less than they’ve been paying for their existing connections.

            So the question becomes, should we build a network that costs the government and tax payers nothing, that customers will pay for, with a discount over what they’re used to paying anyway? Surely that’s a win-win-win scenario? How in the world could you consider that a bad idea?

            Because there’s a catch (yes! There’s always a catch! It sounded too good to be true!). The catch is Telstra misses out. If they’re not building the network and they won’t own the network, then they’re excluded from the whole thing, their market share dwindles, they become a retailer and can no longer trade on the fact that they’re this huge monolithic company that owns the infrastructure everyone else is using. Their cash cow is dead.

            Oh, so if you’re not a major Telstra shareholder that’s no big deal, is it? No, it’s not. But major Telstra shareholders are important people with the Liberal Party’s ear. So the FTTP NBN that would provide a high speed, long term network for zero cost to tax payers got scrapped. Instead we have something inferior, that is twenty to fourty times slower, that will cost more to run, that will need substantial upgrades in the near future, that will cost tax payers $56bn. Because Telstra. And because corruption.

            But your argument that the speed is ‘unnecessary’ is invalid. It’s erroneous and flawed because it isn’t a valid criteria with which to evaluate the subject. The extra speed is a facet of a superior project – it wasn’t a question of spending $56bn for a bit of extra speed that no one wants, that’s just an idiotic position to take because it has no basis in fact.

            Simple enough for you?

          • “the point is a cheaper and faster to deploy MtM rollout will meet the speed tier demand .”
            A shame that we have none of those things.

            “do we spend multi billions more and slow down the deployment to a snails pace to build infrastructure for a minority?”
            You mean the MTM which costs so far) $25b more, a rollout that is delayed by four years in half the time it took to implement it, delivering quality services to a minority because the vast majority of the population is saddled with inferior, rusting crap?

          • The flawed speed tier demand based on too-high pricing. What you are saying is, we should only provision a network to meet the flawed pricing and crap speeds we think should be available even though we can easily do far better. Set the bar ridiculously low and you will jump over it ‘cheaper’ and ‘faster.’

          • “Only 16% of FTTP users want it.”

            Again and again you confuse ‘want it’ with ‘able to pay.’ The ability to pay cannot be removed as a factor and makes any conclusions based on take-up figures worthless.

          • UninvitedGuest,

            Those 16% (using your figure) pay for half the network that the other 84% are using

            The 16% is not ‘my figure’ it from the latest NBN Co Half year Report.

            What revenue figures are you referring to that support that conclusion about the 16%?

            BTW ‘gut feel’ doesn’t count.

            But major Telstra shareholders are important people with the Liberal Party’s ear.

            You know this how?

            BTW once again ‘gut feel’ doesn’t count.

            that will cost tax payers $56bn

            It’s not $56b, have another go.

            The rest of your post is just no fact ranting gap filler.

          • Martin H,

            Again and again you confuse ‘want it’ with ‘able to pay.’ The ability to pay cannot be removed as a factor and makes any conclusions based on take-up figures worthless.

            ok, go ahead insert that ‘able to pay’ figure that makes take-up figures worthless, I assume it makes all take-up figures worthless except for those on 12/1?

          • “The rest of your post is just no fact ranting gap filler.”

            That is why you, sir, are a cunt.

          • By providing the possibility of those speeds and having premium products you allow those who can afford and justify them to pay for most of the network.

            Nailed it +1

            But your argument that the speed is ‘unnecessary’ is invalid. It’s erroneous and flawed because it isn’t a valid criteria with which to evaluate the subject. The extra speed is a facet of a superior project – it wasn’t a question of spending $56bn for a bit of extra speed that no one wants, that’s just an idiotic position to take because it has no basis in fact.

            Nailed it again +1

          • “But major Telstra shareholders are important people with the Liberal Party’s ear.”

            “You know this how?”

            Perhaps you are lucky enough not to have been exposed to the craft of corruption. If they ever set up a federal ICAC and investigate favours granted to Telstra, the acceleration of certain careers within that organisation with an implied result of Liberal party membership and tax deductible donations being paid, I know of one person who would be a willing witness.

      • Data or it didn’t happen.

        If anything those who can get higher speeds are choosing them.

      • “please advise us what the speed distribution is on ftth only. I think you’ll find those with access to higher speeds still chose lower speeds.”
        Availability counts for nought, eh? Worthless troll comment.

        • Some will always choose lower than is available at the top.

          Issue here is its a users choice on FttP, with copper/FttN you might want a Fast speed but what you get is wholly dependent on your distance from a pillar+Node cabinet. Same issues we have with DSL just a slightly different scale.

          Unless they’ve managed to break the laws of physic’s ~half aren’t going to have a choice about considering the top speed period! Then given the Large oligopoly providers seemingly have stopped offering 50/2 (or at least hide it) it kind of lowers the choice even more!

  6. So as predicted by anyone with a functioning brain, MtM is not generating the revenues required to fund the project and is costing billions more in up front costs, remediation and maintenance.

    We fucking told you so Lord light bulb!

  7. To be fair, most directors at that end of a company scale (Billions of dollars of funding) would not be personally responsible anyway, loans/funding at that level is typically provided without personal guarantees of any kind.

  8. Come back GUYFALKS ALL IS FORGIVEN.
    NED KELLY, should be given a posthumous knight hood.
    They were but babes in the wood compared to this government, this mob couldn’t make money even if they had the only coffee shop in Canberra, I am sure they would stuff it up.

    • They couldn’t make money from a brothel in Fyshwick, Canberra either! They would certainly stuff up that operation too!

  9. Talk about penny wise and pound foolish…even their own budget highlights the need for growth.
    So they blow all the money on tax cuts to spur investment (and as every intelligent economist will tell you, tax cuts are the worst form of growth inducement, and infrastructure like the FTTP NBN is the very best). The dice roll being done by the LNP is like betting on snake eyes…not a very good bet.

    Why would anyone invest in Australia when the core communications are so poor (and dropping fast by global standards). We are striving for 25 Mbps, and every one of our neighbors (where even the labour is cheaper BTW) is already at 1Gb or more at a far cheaper rate.
    This Government is really the “Gang That Couldn’t Shoot Straight”, and their ineptitude is taking us down with them…

    • +1. This striving for 25Mbps in the media and in the rollout is pathetic when you look anywhere overseas. Anywhere.

  10. Dont worry, they will give it away to telstra, who will finish it for us and save the day. And retain their wholesale monopoly. And get their network upgraded by the taxpayer. Good one libs. No one could be that stupid – it was a plan to fail by the libs from the start with this planned outcome. Thats pure corruption in my opinion.

  11. Here is a thought, from July 1 2015 the Commonwealth implemented a policy that allowed property developers to choose who would deploy high speed FTTP (or alternative) in their new estates. This effectively opened up the roll out of the NBN (after all what is high speed FTTP for some but the NBN) to competition. The core argument of the policy is that the ‘end user’ should ultimately fund new infrastructure. So why not open this up to the brownfield part of the NBN?

    If a community (led by Local Councils) decided that they wanted better than FTTN (or in the bush, satellite), they could co-invest (in a reasonable manner not the ludicrous quotes we have seen from NBN Company) and thus transfer the cost from the Federal Government to the local community. Introducing competitive tensions into the project like in new developments would force the issue of the best technical solution and see more FTTP, deployed cheaper, faster and in most cases I would bet to a higher standard (sounds like a certain party policy). I don’t know, its just a thought Jason, Mitch and Malcolm.

    • Exactly. There are multiple ways to skin a cat available, not just what the major parties have implemented. Also see municipal FTTP networks in the US. This can be done in Australia, except local comms businesses are asleep. The city of Alexandria, Virginia has offers from 10 private firms. Also see rural (!) co-operatives building FTTP in the UK.

      • Doing stuff piece meal is a horrible way of lowering costs. Understand how large and spread out this fair country is!

        You talk about UK well that’s around the size of Victoria with 20+x the population crammed into said area!

        I mean TPG is basically doing what you’re asking for now. Only issue is they’ll cherry pick the profitable area’s and be damned about the rest as will any commercial entity (especially ones with shareholders). ADSL DSLAM coverage pretty well proved that.

        • I wasn’t talking about the whole UK, I was referring to the rural co-operatives as well as municipal administered networks in the US. This is very different to cherry picking companies going it alone.

          Neither was I saying that it’s the whole solution. I fully support government coverage where not provided by the above.

          It can be spread out and you can still deliver these things, that is what the rural co-operatives have proven.

          • It’s not a bad idea as a social principle but the problem you have here in Australia is that the NBN infrastructure rollout is so dominating, for a local council or a co-operative infrastructure to work it has have the legislative power to say to the NBN Co we don’t want you here, we will do our own thing.

            The problem is especially with rural infrastructure is the cost, to provide FTTP for example at retail plans prices that compete with the NBN (residents won’t be interested if they are more expensive) would require massive subsidisation, if the Federal Government were asked to help out they would say sure we will help out, and build the NBN in those areas.

          • Or FRAUDBAND/FAILED HFC boy, alain…

            We could build a 93% FTTP network mixed with wireless and satellite in remote areas, where the lucrative urban areas could subsidise the less profitable areas (avoiding obscene hand out subsidies to greedy Telstra et al), but nonetheless, consumers would still pay an equivalent amount or less for a vastly superior service.

            A network with a ROI which would repay the build overtime and Australia would forge ahead with state of the art technology which would allow all Australians the ability to complete on an equal (if not preferential) basis to our competitor friends abroad…

            If only someone could come up with such foresight.

            Oh wait…

            You’re welcome

  12. It should be noted that under Labor’s NBN policy, the government equity was $30.5B, only $1B more than the Coalition’s policy.

    Except if they stuck to the plan, they wouldn’t have had the extra expense of stopping the FTTP rollout to do expensive reviews and work out how to implement Malcolm’s Terrible Mess. That would’ve probably meant hundreds of thousands more premises passed by the network, and more areas being cut over from the copper network, so they’d have considerably higher revenue which would’ve put them in a better position to source funding.

    But at least they’ve reduced their budget from $44B under Labor’s NBN policy to between $46 and $56 billion.

    • That’s just as well. It would be a mess otherwise ;) LOL

      It was $30.4B, but yep. Chopping and changing for 2 1/2 years achieved exactly nothing. Continuing for a while would have achieved a lot while they prepared the modifications in the background.

      • The Government equity estimate is not the funding total they end up paying at completion of rollout.

  13. Entire project is a fraud. Highly contented crap.

    Did you see the ACCC report? There is a total of 29,000 gbps of tails (services) connected to the network. Guess how much bandwidth the RSP have purchased at the CVC? Only 956 gbps (and no way to know who bought what).

    The hyperbole of the NBN was that we would get next generation internet, that would be several times faster for basically the same that we pay today for ADSL.

    The problem is that the corporate and government sector, who spends tens of billions of dollars a year on their telecommunication services, who pay $20-50k a month for single 100mbps service (admittedly that’s symmetrical) would jump ship to the NBN in a second if it meant that they could get essentially the same service for $100-1000 a month.

    That’s why the former telco boss/execs and their former union bosses of telco workers all conspired to cripple the NBN project from the very beginning.

    The CVC pricing construct was designed on paper to pay for the NBN project.

    The thing is that the telcos love it because it allows them to contend the shit out of the NBN services they provide and justify it with a shrug of their shoulders.

    Think of it this way. In the Telstra wholesale pricing scheduled – https://www.telstrawholesale.com.au/download/document/tw-rate-card-for-reference-services-v7.pdf page 12 shows that a metro 1km 100mbps service is $41,988 per month! Per bloody month.

    This is for a fibre service, with the cable, SDH/routers/boxes all built over the past 10-15 years. Carried on fibre that is at least a 10/100 gbps loop.

    How does anyone even think that’s remotely realistic? Fair enough if the telcos were digging in new cable (but even then it doesn’t cost $41k a month to look after that service.

    How can the NBN provision FTTH services that are all fibre, for less than $100 month. Shouldn’t they be charging $41k? Isn’t their fibre similar to the Telstra fibre?

    The NBN network however is burying tens of billions of dollars into the pockets of a very small group of people who are basically the liberal and labour party. Its a fraud.

    For that money we could have gotten, with a bit of compulsory acquisition and federalisation of town planning laws, specifically telegraph poles, a per unlimited, at least 10:1 contention ratios. How you ask. Here is my simple plan

    1. No subcontracting/contractors. The NBN builds regional based provisioning groups.
    2. Federal government compulsory acquired AAPT along with its PowerTel exclusive licence to use EA, Citipower conduits. They get 12,000 km of existing fibre. AAPT is split into NBN Wholesale and NBN Retail.
    3. Federal government legislates NBN control of telegraph poles and streets. NBN comes up with a plan to provision via telepgraph pole where cost to provision via underground exceeds $100 per m.
    4. NBN does not acquire copper or HFC assets. They unnecessary. The NBN doesn’t need the pits nor the space the telstra lead in cable takes up. Again provisioning via telegraph poles where uneconomical to do any other option takes care of this issue.
    5. Satellite is launched though to manage the interior
    6. NBN owned and managed construction/crews systematically provision town/cities one by one.
    7. NBN creates the NBN Rollout Partners program. Councils and state governments can fund (min period 3 tenure) the creation of NBN managed crews to expedite the provisioning of services to a particular locality/region. Once finished the crew is used to continue activation of other areas in that region.
    8. NBN PoI network is reduced significant to capital cities – NBN megapops.
    9. NBN ISP are required to advertise contention ratios. MRTG graphs and other usage data for interconnects will be publicly available.
    10. All traffic within the NBN POP is free (though NBN will obviously hold rights to manage the traffic).
    11. Each service has a flat fee payable. No usage based fees allowed either at the wholesale or retail end.
    12. NBN Retail will be design to ensure there is no race to the bottom in terms of contention. It will uphold a minimum standard of service.
    13. Corporates, SMEs and government sectors will be allowed to purchase NBN services with a multiple of 5-10x on the consumer retail cost.
    14. Payback on the NBN project to be budgeted over 100 years.
    15. NBN Wholesale to remain a government held concern. NBN Retail will have an option to be floated.

    • 1984, I agree with you that the CVC model was deeply flawed – interestingly NBN Co used essentially the same model as Telstra used for their South Brisbane FTTP network except the CVC charges were 1/4 of Telstra’s (they were over $80 p/mbps).

      That aside, the only other 2 issues with the original plan were the ALP not telling the ACCC to go stick their head in a pig over their 121 POI decision which dramatically blew out the upfront and ongoing backhaul costs and upfront POI equipment costs for ISP’s by almost 10x. And they also chose the flawed Prime Contractor model for the rollout, NBN Co should have done all project managament and sub-contractor management in-house as Optus and Telstra did during the 90’s cable wars.

      Other than those issues, the ALP NBN policy was quite sound.

      • Derek O,

        Other than those issues, the ALP NBN policy was quite sound.

        The rollout FTTP targets were carved in half from the original estimates at the end of the Labor reign in 2013, and Labor NBN policy 2016 will never go back to anywhere near to the fantasy of 93% FTTP by 2021 ever again.

        Other than those key points it was ‘quite sound’.

        lol

        • Lol devoid taking about the past again how about the coalition target being missed by 75% or does the 25Mbps to all by this year still count.

        • At least nbn co had a good reason, non performance by several prime contractors.

          What’s mal’s excuse for not completing MtM this year? Incompetence! Deliberately lying to the electorate!

    • And you’re conflating the price that Telstra charge with something even remotely approaching an actual cost to provision that service. Telstra charge like that so their products are only available to a certain class of customer. Everyone else is eliminated by costs they couldn’t hope to afford. It has zero basis in actual cost to Telstra, it is all about market segmentation and profit gouging where inelastic demand is price insensitive. The problem is the way those prices affect the retail market – they might seem like chump prices only idiots would pay, but that’s what ISP’s are paying, and then trying to run retail services on highly contended, artificially limited trunks, because they can’t afford to run adequate services because Telstra are screwing them. Which means they’re screwing us, because it is retail customers who ultimately pay.

      • UG, that was a misinterpretation. 1984 did not endorse what Telstra is charging or conflate it with cost. They acknowledged that it’s exorbitant by saying “it doesn’t cost $41k a month to look after that service.”

        • Sorry, I was confused by:

          “How can the NBN provision FTTH services that are all fibre, for less than $100 month. Shouldn’t they be charging $41k? Isn’t their fibre similar to the Telstra fibre?” I now note the irony, where before I thought he was posing a serious question.

          I’m just used to people saying straight faced that fibre services *do* cost that much to provide, that provision of dedicated, uncontested symmetrical fibre is uber expensive to supply and operate blah blah blah. Yes, it’s expensive, but at nearly half a million a year that is the cost to run the cable, pay for all the network equipment and probably the cost of running backhaul all the way to their data centre, too. They’d be lucky if it cost them $500/year to operate after that, and that includes some engineering oversight time! Telstra has this whole country eating out of the same trough of fiction and nonsense…

          Anyway, as you were :-/

    • “Did you see the ACCC report? There is a total of 29,000 gbps of tails (services) connected to the network.”

      Not enough to the network is up and running. 900k odd on FttP with however few on Cu. (I don’t think its hit 22%) considering the tail was designed to support 93% fibre coverage its not as big an issue as the ACCC likely makes out (they seem to be somewhat technically ignorant too at least when it comes to the NBN)
      Its also one of the benefits of fibre. If you upgrade the endpoints suddenly you have a much large tail or transit capacity (and its fairly cheap to do so). If NBN were using NG PON2 I’d wager some of those cables might need to be measuring Tbps not G!

      Like Derek says Labor screwed plenty that LNP could have just fixed. LNP whoever have screwed this to the point we might end up with nothing!

  14. A damning indictment of the modified rollout. They’re operating on a base case of $49 billion, which will be difficult to get, to deliver what for most subscribers will be (up to) 12/1 or 25/5 Mbps, with any upgrade beyond (minimum FTTdp) costing many billions more. Value for money? Nope.

    • yeah this is the thing.

      Even if fibre was gold plated, its projected returns were at or above target levels. Its a long term secure and safe technology, a known quantity. Budget projections were fairly tight (despite which pollitical biased figures you want to use … there was no $15 billion range due to ‘unknowns’).

      MTM they bought 2 networks not fit for purpose (seriously most boards if they’d not done there due diligence would’ve been hung drawn and quartered … many have for far less!) aka HFC. Add to this purchase of Copper loops and FttN and FttB with questionable lifespans. Then have a an issue(s) whereby your costs can only be narrowed down to the nearest $10 billion. Revenue projections are low and lowering just to make life interesting.

      Which of those are you going to want to give the best rate when lending too (MTM can probably raise funds regardless just one way is going to be them getting bent over)!

  15. “Notably, the NBN company’s individual directors would not be held personally responsible in such a case, with the Government having provided an indemnity liability against such a case.”

    This makes me insanely angry.

    • +1 the “i was just following orders” excuse didnt work for Hitlers goons so why should it work for Lord Light Bulb’s!

      ALP, if you win gov we want Royal Commission into the liberal corruption of the NBN!

        • I see Richard you are now taking a leaf out of alain’s book, as the facts aren’t on your side and now simply stoop to silly statements and asking of dumb questions.

          It’s quite an improvement to the rubbery, cherry picked figures, denial of previous statements and immovable rad con bias.

          ;)

          Your welcome

    • It seems to me that we should still be able to hold the people who implemented that indemnity liability to ultimate accountability…

      • If they acted illegally etc (and well someone catches them) they’re in as much trouble as anyone its not a 100% free hall pass etc.

        It does certainly look like currently they think they’re playing with monopoly money!

  16. I’ve had it with nbn/ Ruddstra.
    Passed 2M premises, great, finally, how many of those are still service class zero? (Oh, I see FOI, or CiC, despite the better part of AUD/$29.5B coming from taxpayers?
    The budget papers seem to show that the LyingN(C)P is prepared to tip in the remaining $8.8B, rather than pay out $9.4B for non performance, offset by flogging some assets/ tendering services?)
    Apparently satellite wireless is up, ABT. Let’s see how long it takes to get those stuffed around on interim satellite wireless to be up and running, let alone the identified 360K to 400K premises, because despite rightsizing in 2013, Godzilla-ing in 2009, initial splash of 2007, … It seems nbn will take years to get moving on rural or remote. Even then Inmarsat is already getting 50+ Mbps up, and Winds of Japan has demo-ed 155/ 6 Mbps.
    On top of that fixed terrestrial wireless only does 50/ 5 to 20 Mbps, despite Ericsson, whilst commercial carriers have shown mobile cat 11 4G devices doing 600 Mbps over the air interface. And 5G will be used at the 2018 C’Wealth Olympics, says Telstra.
    None of that though compares with the salt afflicted snail that is nbn on FTTx, or HFC. Unless we’re talking a marginal electorate, may be?
    Oops.
    My old home, about the same distance from the CBD, over in Holland, has had the option of a symmetric 500 Mbps for a while now (from the telco), even 250 Mbps (from the cableco).
    When we left it ISDN2/ BRI did okay for us … (2000s).
    For the next three years it would seem HFC or mobile terrestrial wireless is it for us.

  17. From reading most of the comments and interested in what people had to say about the NBN.
    My question about the NBN.
    Can you have two means of connection to the NBN.
    Im talking about using a satelite dish for receiving and the new NBN cables as sending. I know satelite receiving is quite fast. But sending is pretty much slow. The NBN cables travel pretty fast but providing you have optic cabling right to your door step.
    My suggestion is if people had accounts with foxtel or any other carrier. It could be a means to set up an account with the national broad band network via their satelite connections as a package to use the internet.
    This of course would have more providers putting money back into the NBN. Through their customers accessing the nbn via satelite and the nbn. It would make the network run much faster. And help pay off the debt that is mentioned in the article.

    • “Can you have two means of connection to the NBN.”
      No. You can have multiple forms of internet available in your area, but nbn will only service one of them. You would need to chase up alternative services with alternative providers.

  18. It’s no wonder the Liberals slower NBN is not having people sign up in droves to help generate income.

    Why pay for a slow FTTN over copper with slow uploads when you could have had fast Up/Down FTTP.

Comments are closed.