Coalition unveils long-awaited NBN policy

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Coalition unveils long-awaited NBN policy

User pays for FTTP.

Australia's Liberal Opposition announced its policy for building a national broadband network today, junking the ALP's fibre-to-the-home plan in the hope of connecting Australians at a lower cost.

Tony Abbott and Malcolm Turnbull fronted a news studio owned by Fox Sports today to confirm that a Coalition Government, if elected, would build a cut down version of the Government’s national broadband network for $29 billion with a completion date of 2019, compared to Labor’s $44 billion and 2021 end date. 

Should it be elected to power in September, the Coalition plans to can the Government’s objective to run fibre all the way to Australian homes (FTTP), in favour of a plan to connect fibre to some 60,000 street-level cabinets and use copper wires or wireless connections from the street to the home.

Around 70 percent of Australians, or nine million premises, would receive a connection under the Coalition's fibre-to-the-node (FTTN) plan. The Coalition promised to prioritise areas not currently covered by copper in the FTTN rollout, as well as greenfield (new) housing estates.

The Coalition has pledged that 65 percent of the FTTN rollout would be completed by 2017. Of that, 35 percent would be in areas served by HFC networks.

The remaining 20 percent would be served by FTTP, to be delivered by 2019. It was proposed that the seven percent of Australians which the ALP planned to serve with satellite and fixed wireless will continue to enjoy these technologies.

The Coalition claimed its network would give Australians access to download speeds of between 25 and 100 Mbps by 2016, and between 50 to 100 Mbps by 2019.

The policy documents did not provide any detail on upload speeds. Shadow Communications minister Malcolm Turnbull said Australians should expect upload speeds to be around one quarter of download speeds under the Coalition plan.

Labor, by contrast, has promised speeds of up to 100 Mbps per second. 

What happens to Telstra and Optus

Under to Coalition proposal, NBN Co would no longer have a fixed-line wholesale monopoly in Australia.

Telstra and Optus would be allowed to offer high-speed broadband on their cable networks under the Coalition policy.

A Liberal-National Government, if elected, would also renegotiate agreements with Telstra to purchase the last mile of copper, leaving the telco’s structural separation intact. 

“The Coalition will remove or waive impediments to infrastructure competition introduced to provide a monopoly to Labor’s NBN and investigate opportunities to invigorate and enhance competition among retail service providers,” the policy document reads.

“The current agreement with Telstra and Optus for HFC says once the premise is connected to the NBN, Telstra and Optus cannot provide broadband services over their HFC. This is extremely anticompetitive and flies in the face of government policies in this country and others for several generations,” Turnbull said today.

“We would like to unwind that and enable facilities-based competition."

Telstra’s current contract with NBN Co for the national infrastructure project, signed in 2011 with the current Labor Government, is made up of $4 billion for the migration of fixed-line customers to the NBN once Telstra's copper network is decommissioned, $5 billion for rental of Telstra's pits, ducts and pipes and $2 billion in savings from a deal with the government to relieve Telstra of its obligation to provide regional voice services.

“We’re very confident [new negotiations with Telstra] can be achieved,” Turnbull said. “This isn’t worse off for Telstra, they’ll be marginally better off, is what analysts think. It’s somewhere between a neutral and a mild positive.

“Telstra only gets paid, under the Government scheme, when the NBN connection becomes live,” Opposition Leader Tony Abbott said. “And there are very few live connections right now. Under us things will become operational more quickly. So Telstra will start to get more money more quickly.”

No changes will be made to NBN Co’s agreement with Optus over migrating customers from its HFC network.

“We assumed no changes to the Optus agreement. Everything we’ve heard from Optus indicates they want to be out of HFC.”

Reviews, speeds and pricing

Under the Coalition policy, the ACCC would set a uniform price cap on broadband services, with network operators free to set their own prices under that cap. 

Turnbull said he would expect entry-level Coalition NBN plans to cost around the same as current ADSL plan pricing.

The Coalition has also pledged to review several aspects of the current NBN. Within 90 days of being elected, the Department of Broadband, Communications and the Digital Economy would conduct a review of the broadband quality and availability across Australia to guide prioritisation of the rollout.  

The Coalition also intends to analyse governance of NBN Co and commission a cost benefit analysis, likely led by the Productivity Commission.

“We’ve done the hard analysis the Government never did,” Turnbull said. “We looked at what telcos are doing in comparable markets, and what we are presenting here is consistent with best practice around the world.

“The cost of this network is not in the electronics or fibres or cables, it’s in labour. Digging holes, trenches, getting guys in cherry pickers. It’s the civil work that rakes up the cost. This is a much smarter approach.”

Turnbull said the value of the utility of broadband did not increase in a linear fashion with the speed.

“Speed is only useful insofar as you can use it for something.”

“[So] 25 Mbps is not twice as useful as 10 Mbps, and 40 Mbps is certainly not twice as useful as 20 Mbps. This [plan] is will deliver all of the services and applications Australian want and are prepared to pay for, and will do so sooner and cheaper.” 

Fighting over copper

Communications Minister Stephen Conroy earlier this morning said the Coalition was building a one lane Sydney Harbour Bridge. 

“Tony Abbott and Malcolm Turnbull are going to leave the copper. I can’t find a dumber piece of public policy than buying the copper off Telstra. Kerry Packer would be laughing all the way to the bank if he could find someone to buy Telstra’s copper network,” he said.

“The copper network is estimated to cost $1 billion a year to maintain. The copper network in the ground is aging and decaying and cannot deliver the speeds Turnbull is claiming. It doesn’t matter what he does, if the copper is degrading, the speeds he’s going to claim today are defying the laws of physics and the quality of the copper in the ground.”

Senator Conroy said that under the Coalition’s ‘short-sighted’ plan, nine million Australians would be cut off from NBN access.

"The Coalition consistently displays an ignorance of the role of high speed broadband and the role that it will have in the future. Study after study has demonstrated the societal and economic impacts of high speed broadband,” he said.

“Tony Abbott says Australia can't afford to have the best communications system in the world, Labor says we can't afford not to have it.”

Turnbull said there were two approaches to copper in poor condition: fixing it or putting fibre in problematic areas. 

“You make a rational, cost-effective business decision where you will go,” he said. “I am knowledgable and modest enough to know you can’t predict the future with great certainty. So you build in flexibility. Labor does not have technology that’s future-proof. There is no technology that is future-proof."

“All infrastructure has a lifespan,” Abbott added. “All has to be renewed over time, but there is no reason why most of the copper that’s in place can’t continue to be used. Where it can’t, obviously there will be a fibre rollout, and where it can continue to be used, we should make use of it.

“One of the real problems with the Labor version is it junks perfectly useful infrastructure, it junks copper.”

Updated 12.4.13 to correct FTTP percentage.

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