How do Labor and the Coalition differ on NBN policy?

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This article is by Rod Tucker, Laureate Emeritus Professor, University of Melbourne. It originally appeared on The Conversation.

opinion/analysis As hinted in earlier announcements by Shadow Communications Minister, Jason Clare, Labor’s much-anticipated policy for the National Broadband Network released Monday commits the party – if elected – to move away from the Coalition’s fibre to the node (FTTN) network and transition back to a roll-out of fibre to the premises (FTTP). This was the central pillar of Labor’s original NBN.

The FTTN roll-out will be phased out as soon as current design and construction contracts are completed.

This is a major shift away from the Coalition’s focus on FTTN technologies, which was a key part of their election platform in 2013. After a number of delays, FTTN equipment is now being rolled out around Australia.

Labor will continue with the Coalition’s plans to deliver NBN services on upgraded versions of Telstra and Optus’ hybrid fibre coax (HFC) infrastructure. No doubt Labor would like to move away from HFC, but the contracts for the HFC network are already signed, and it is probably too late to remove HFC from the NBN.

Apart from a commitment to deliver FTTP rather than satellite services to western Tasmania, there are no significant changes to the fixed wireless and satellite parts of the network.

Labor forecasts that its revamped NBN will be completed by June 2022, with FTTP being available to 2 million more homes and businesses than would have been the case under the Coalition’s current plans. At the completion of Labor’s NBN rollout, approximately 39% or around 5 million homes and businesses will have access to FTTP, compared to 20%, or 2.5 million, under the Coalition.

A 39% FTTP coverage is considerably less than the 93% target in Labor’s original NBN plan. But in a significant longer-term policy initiative, Labor has promised to commission Infrastructure Australia to develop a plan to upgrade the 2.5 million premises served by FTTN to FTTP. This will mean that all fixed-line connections in Australia will eventually be either FTTP or HFC.

Labor’s new policy recognises the possibility that new fibre-to-the-distribution-point (FTTdP) technologies might become attractive in the future, but has reserved judgement on FTTdP until the technology is more mature. NBN Co is already looking at this technology.

Significantly, FTTdP is compatible with FTTP and offers a straightforward upgrade path to FTTP.

Can NBN Co deliver Labor’s new network?

Labor has pointed out that NBN Co has an in-house FTTP design and construction capability as well as the IT systems necessary to manage FTTP. In addition, legal agreements in place with Telstra to provide access to Telstra’s ducts and pits.

In fact, in recent months, NBN Co has been rolling out FTTP (including fibre to the basement in multi-dwelling units) at a rate of about 10,000 premises per week. This has been underway at a time when NBN Co has been focusing on ramping up its FTTN and HFC rollout.

With a shift away from FTTN construction, and a shift of resources to FTTP design and installation, it is entirely feasible that NBN Co could double the rollout rate to around 20,000 premises per week. This would be more than enough to serve the 5 million premises targeted over the five-year time-frame of Labor’s roll-out plan.

Are Labor’s costings sound?

Labor has not published a detailed budget for its NBN plan. But the total estimated cost ($49 billion to $57 billion compared to the Coalition’s budget of $46 billion to $56 billion) appears to be plausible.

There are a few key factors that support this:

  • The cost of installing FTTP has decreased significantly over recent years, aided by new efficient construction techniques and new fibre cables with smaller diameter.
  • The ongoing operational expenditure needed to keep an FTTP running is considerably lower than for FTTN.
  • FTTP will remove the need to be repair and maintain Telstra’s ageing copper network, a cost that NBN Co currently bears.
  • As the demand for higher-speed services over FTTP grows, NBN Co will receive higher revenues from its FTTP network than its FTTN network. Labor claims this will increase the rate of return on the NBN investment from 2.7% under the Coalition to 3.9% under Labor.

What will be the impact of Labor’s policy?

Many critics have highlighted the severe limitations of the Coalition’s slow-speed FTTN network and its relative inability to drive digital innovation.

The pace of FTTP roll-outs around the globe is increasing as other countries recognise the critical importance of super-fast broadband to economic growth.

AT&T, a major United States telco has essentially stopped constructing FTTN networks, and has announced a major increase in FTTP deployments in response to customer demands for higher speed.

In Australia, the Coalition’s FTTN exacerbates the “digital divide”, the gap between broadband haves and have-nots. Here’s how.

  • Those homes and businesses lucky enough to be served by FTTP can access very-high-speed internet now and even higher speeds in the future. Meanwhile, those premises stuck with FTTN will struggle with lower speeds and find that their connection is obsolete within a few years.
  • For those customers with FTTN connections, the speed of their service will be affected by their distance from the node. The greater the distance, the lower the speed.
  • The Coalition’s technology choice program enables FTTN customers to pay for an upgrade to FTTP, but at a cost depending on the distance from the node. A business that needs FTTP and is some distance from the node may have to pay $5,000 or more for an upgrade, while another business close to the node would pay considerably less.

The NBN has been a key issue in the past two elections, so will Labor’s new policy be a vote winner? The policy to move back to FTTP provides a clear differentiation from the Coalition’s FTTN-centric strategy.

Many Australians recognise the importance of super-fast broadband as a driver of innovation in the digital economy, and will no doubt think of this on July 2.

By Rod Tucker, Laureate Emeritus Professor, University of Melbourne. This article was originally published on The Conversation. Read the original article.

Image credit: Screenshot of ABC broadcast of Labor press conference, believed to be covered under fair dealing

65 COMMENTS

  1. Many Australians recognise the importance of super-fast broadband as a driver of innovation in the digital economy, and will no doubt think of this on July 2.

    I know I will :o)

    #LibsLast

    • yes, he’s much easier to follow than some around here….and more believable too.

    • Many Australians recognise the importance of super-fast broadband as a driver of innovation in the digital economy, and will no doubt think of this on July 2.

      Well a portion of the 6% who think the NBN is a important election issue might.

      • If you assume that how people spend their money is a truthful indicator of importance then the 7

        People will typically be positive towards a policy when it doesn’t appear to impact negatively on them, but a truer picture emerges when you ask them to pay for a service. Based on this the 79% who on fibre who have willingly chosen 25Mbps or slower are unlikely to consider NBN speeds as an important election issue.

        • What is the breakdown of the 79% Mathew.

          Why do you insist on saving 79% 25mbs and below, but refuse to point out the numbers on 12mbs? Why are you being disingenuous?

          Stop trying to make people agree with you, by using misleading figures. It is pathetic.

  2. The NBN has been a key issue in the past two elections

    Bigger issue this election it seems. Always said the coalition clowns clusterfuck patchwork policy would come back to bite them on the ass if not 2016 in 2019. Seems I was right yet again.

    • true. it can be salvaged this time, if enough FTTP is deployed then the coalitions plan will be held against them as a f*** up for the next decade. Labor and the Green will be able to correctly state that the coalition are not to be trusted on technology and infrastructure.

      I don’t know where we would be precisely with FTTP had Labor remained in power till now but I’m confident that if the coalition took power in 2016 they’d have rapidly nerfed it by limiting speeds,data provision or contention

    • Hubert Cumberdale,

      Bigger issue this election it seems

      6% is a bigger issue is it, umm ok.

          • The question was “Based on what you’ve heard, do you support or oppose the National Broadband Network (NBN), and will it influence your vote at the upcoming federal election?”

            It didn’t ask:
            1. What type of NBN (FTTP, FTTN, FTTB, HFC, etc.)
            2. What people were willing to pay for a connection
            3. How much influence it would have on the person’s vote
            4. Excluded those who didn’t know, yet still managed 86% in support and 15% against = 101%.

            It is about as useful a question as “Do you support sport as part of school curriculum?” Most people would say yes to such a broad harmless question. It is only when you add specifics that people react negatively.

          • So you’d agree that 85% (actually 86% if you read the article) want better broadband regardless of type?

          • > So you’d agree that 85% (actually 86% if you read the article) want better broadband regardless of type?

            Most people would like better schools, hospitals, roads, parks, jobs, holidays etc. It is only when you ask them to prioritise and explain the costs that meaningful answers emerge.

          • I understand, but don’t fully agree Mathew.

            People, especially “average Joe Australian” don’t understand whats coming in the future (that future being within 25-50 years, just looks at how things are going in manufacturing: http://www.wsj.com/articles/meet-the-new-generation-of-robots-for-manufacturing-1433300884). AI/robots really are going to take over (they already are, look at the type of jobs available these days and what the shrinking fields are) and if Australians don’t position themselves a lot better than they are, the country will be screwed in the future.

            The LPA is doing a terrible job at managing that, the ALP are doing better (but could do a lot better again). There are other parties (and even independents) that are looking even better at managing the future.

            It’s time to start thinking outside the 2 party system and think about who, and what system, we want in the future.

    • > Bigger issue this election it seems. Always said the coalition clowns clusterfuck patchwork policy would come back to bite them on the ass if not 2016 in 2019. Seems I was right yet again.

      The fact that 79% of people on fibre are unwilling to part with cash for faster speeds than what FTTN, FTTB & HFC easily delivers suggests that you might as is the most common case be suffering from fibre fanboi induced cognitive blindness.

      The Australian public are becoming increasingly aware that Labor’s NBN is incapable of delivering the promises that Labor made on eHealth & eLearning and that Labor planned for only a small minority (less than 1% in 2026 on 1Gbps) to receive the benefits. Labor promised 1Gbps just prior to the 2010 election. In December 2013 NBNCo finally made 1Gbps plans available at wholesale level, yet today not a single RSP is selling plans faster than 100Mbps.

      I refer you to Low-income users denied NBN benefits
      “With the quality of high definition that you’ve got, being able to come across this sort of a network, you could easily have a quick hook-up and actually work out, ‘OK, do I need to take him to hospital, or could we keep him at home?’,” Mr Smith said.
      But when The Australian approached Senator Conroy and Mr Quigley to describe the level of service users could expect at lesser network speeds, they said high-definition video conferencing was not possible on the NBN’s most basic package.
      “You certainly can’t do high-definition video service on a 1 megabits per second upstream — it’s impossible,” Mr Quigley said.

      • And instead of pushing for a system like the NZ ( an example here: http://unlimitedinternet.co.nz/broadband-plans#UFB ), you constantly just live in the past and arc on about “Labor did this, Labor did that, boo hoo”.

        Grow a pair man and actually push your cause.

        Unless you are and your cause is actually continually bitching about Labor? Cause I sure as hell don’t see you moaning about the LPA who have continued the same policies…

        • Tinman the MM still has not admitted he was wrong and I have little patience for his continuing violations of the Delimiter comments policy so I have to ask you not to interject if he responds to me. Thanks.

          • Sure, can you get him to admit why he doesn’t actually pursue his stated objective and instead moans about Labor from 6 years ago?

            Cheers.

        • > Grow a pair man and actually push your cause.

          The first step is having people admit that for 80% of Australians there is little difference in real world outcome between the Liberal & Labor NBN Policies since FTTN, FTTB, FTTP & HFC are perfectly capable of 25Mbps.

          The second step is to determine if this is an issue. The perception I have is that most don’t care as long as they think they have a chance of 1Gbps, ignoring the fact that Labor planned for less than 1% to have 1Gbps connections in 2026.

          • The perception I have is that most don’t care as long as they think they have a chance of 1Gbps

            No one has a chance of 1Gbps with FttN, it just won’t do it.

            From some of what I’ve read from you, you want the NZ system (an example posted above), if so, I actually agree. But the LPA sure as shit aren’t doing anything to improve the system, so bagging Labor and not saying anything about the shitty LPA MtM, you just come across as a Liberal shill…

          • > No one has a chance of 1Gbps with FttN, it just won’t do it.

            FoD will and the average person has just as much chance of that as 1Gbps under Labor policy.

          • At least the FTTP GPON architecture supported a small number of 1 gbps users per 32 way optical splitter, FTTN is sharing a paltry 1 gbps between 192 ports!

          • “FoD will and the average person has just as much chance of that as 1Gbps under Labor policy.”

            FoD is a dream. It isn’t real. Even if it was, the statement was no one has a chance of 1Gbps on FTTN. FoD is NOT FTTN. It is by definition, Fibre on Demand, thus a FTTP solution.

            So, his statement that people cannot order 1Gbps on FTTN is true.

            Keep on spinning the story Mathew, you look like more the fool every time you spout it.

          • FoD will and the average person has just as much chance of that as 1Gbps under Labor policy.

            They aren’t taking FoD applications for those on FttN…

          • “They aren’t taking FoD applications for those on FttN…”

            Oh but Tinman, they will! Because Reality and Mathew both say they will! In the future… sometime… maybe… when the magical pixie dust has worn out.

      • The Breakdown of that 79% is still better than the original estimates. Which means the NBN on actuals is making more than they originally estimated. Which would have meant it could have been paid off faster.

        Costing only those who use it, and no one else.

  3. No matter what happens they need to start targeting some significant business districts for the FTTP rollout.

    Get the small businesses on board in a couple of significant towns, and the rest of the towns will scream for it. It will also help the bottom line getting the high income low expense types who are willing to pay the extra for the higher speeds.

    • Yes….yes it does…apparently it was “perfect” when Malcolm saw it in a vision….or something…

      • As perfect as Labor’s plan for less than 1% to connect at 1Gbps in 2026 while in Europe preparations are being made to roll out 10Gbps.

        • Boo Hoo “Labor WHAAAAAAMBULANCE”.

          Keep living in the past Mat, it’s a great place…

        • So a fibre rollout then ? Do you know how easy it is to upgrade to beyond that speed when fibre is in place? Just an aside, one of your other comments can’t be directly replied to so , I hope you know fibre on demand that Turnbull promised didn’t happen,he said it was a despicable attempt by Rudd to scare voters when Labor said FoD would be 3000 to 5000 bucks now try to find anyone getting quoted under 10 thousand. FoD is as much a reality as “25mbps by 2016”

        • “As perfect as Labor’s plan for less than 1% to connect at 1Gbps in 2026 while in Europe preparations are being made to roll out 10Gbps.”

          We get it, you hate Labor. Fine. Whatever. They haven’t been in power for 3 years, get off it… Seriously…

          FTTN cannot even provide 1Gbps, but you harp on and on about Labors prediction years ago when they were in power, that only 1% would want 1Gbps in 2026…..

        • So.. just want to point something out.

          NBN corporate plans were released yearly, and only ever went 3-4 years ahead.

          Anything outside of those bounds was assumption based on the figures available at the time, and was always subject to significant modification based on the performance prior to those points.

          So you have pulled a vague estimate out of your arse and attempted to use it to justify the FTTP as waste, despite the reality that over the long term, we KNOW the bandwidth usage of the public will increase and that we KNOW that Fibre is able to be upgraded to handle it. As opposed to the COPPER based plans which have limited ability to grow with demand.

          Sad Mathew… Sad.

        • > Anything outside of those bounds was assumption based on the figures available at the time, and was always subject to significant modification based on the performance prior to those points.

          In the six years since the first NBNCo Corporate Plan was published the figures have been shown to be at best overly optimistic.

          If we evaluate the speed tier predictions from the NBNCo Corporate Plans against the reality of today, then:
          * 12Mbps is below the prediction
          * 25Mbps is significantly above the prediction (and rising)
          * 50Mbps is significantly below the prediction
          * 100Mbps is below the prediction (and falling)
          * 250Mbps is below the prediction

          When we add the information that Telstra (close to 50% share of NBN) is not selling 12Mbps plans then there is an obvious reason as to why the outcome is different to Labor’s prediction. If we combine 12Mbps & 25Mbps speed tiers then this is significantly above Labor’s prediction.

          I don’t see a Labor plan which has resulted in increasing numbers connecting at slower speeds to be a good outcome.
          I don’t see that this trend is likely to change without radical policy change.
          I don’t seen any evidence that Labor think speed tiers are damaging the internet access and denying people the benefits Labor promised.
          I see very little evidence that people are concerned about others missing out on high speed internet.

          • Well in all fairness Mathew, Labor haven’t been in charge for the last 3 years, so you know all those incremental changes I was talking about. They haven’t been happening.

            Instead we have the Coalition who have changed the rules and have an anti Labor (and therefore anti fttp) agenda. So any potential benefit that has been lost, is pretty much down to the coalition. They could have cleaned things up, but instead decided to make it worse.

          • Well in all fairness Mathew, Labor haven’t been in charge for the last 3 years

            Exactly Woolfe.

            And as I pointed out to Mathew (and he appears to have ignored), all the issues he has with the NBN are worse under the LPA…

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