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$40 bn NBN Cost To Spiral Under Libs?

According to SMH, who has seen a draft of the speech the NBN Co. Chairman will give to a forum on ‘Australia’s Digital Future’ in Sydney later today, Mr Harrison Young will argue Labor’s $40 NBN plan is the most cost effective way to build the Internet infrastructure needed to propel Australia into the next technological era.

The Coalition, who are fierce opponents of the $40 billion fibre optic National Broadband Network, are arguing instead for a mix of technologies, including fixed wireless, fibre to node and satellite, as the best solution for high speed Internet and will lower costs dramatically. 

However, not so says NBN’s Chair who believes fibre-to-the-node would be more expensive to implement over the long term than the $40bn NBN plan which is running optic fibre cables into premises.

“The apparent cost advantage of fibre to the node decreases as you lengthen the time frame you look at. In the long run, as Keynes famously said, we are all dead. Estimating costs is an engineering problem. Deciding on the relevant time frame is a policy question.”

Young is also picking holes in other components of the Coalitions NBN-alternative plan and says the key aim of breaking Telstra’s monopoly and freeing up telco competition (by separating its wholesale and retail arms) would be destroyed, as the Coalition wants Optus and Telstra to keep their HFC cable network.

This would also lead to a very “ironic” situation, says Young, as the richest suburbs in Australia would have the worst broadband, since these areas have cable networks already, thus would not be privvy to the a faster fibre network. 

However the Coalition are pushing for upgrades to existing HFC networks.

“If you retain Telstra infrastructure as part of the national broadband network, even just the last bit, you will not have accomplished the separation of [Telstra] wholesale from retail that was a major objective of Project NBN,” Young warns in his speech.

Shadow Communications Minister Malcolm Turnbull has criticised Labor’s $40 bn NBN as “the single most expensive and time-consuming way possible” to deliver high speed broadband to the nation.

Telstra too advocate fibre-to-the-node, and said its alternative to the NBN would encompass “some fibre to the premises in some circumstances; we would use fibre to the node in some circumstances; and we would continue broadband over copper in some circumstances.”

Although the Coalition recently said they will not cancel the NBN contracts worth millions already signed if they got into power after the next election, Malcolm Turnbull recently said:

“No, the Coalition will not cancel or roll back the NBN. The NBN will continue to roll out but we will do so in a cost-effective manner in particular in built-up areas.”

The NBN Co, who has already been under fierce scrutiny over its costings, recently said costs had increased by $4.6bn – pushing the total bill above the $40bn mark – and the network currently has around 13,000 active users, although this figure is expected to grow by half a million in two years.

The NBN is set to be rolled out to 3.5 million premises by 2015.