NBN Co should be paying some costs for area switches

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NBN Co should be paying some costs for area switches

New approach suggested for Technology Choice program.

NBN Co should co-invest in area switches in regional and remote Australia so more go ahead and defray its own future upgrade costs for the fixed wireless and satellite networks.

This is a key proposal in the 2018 Regional Telecommunications Review, which was released last night, having been sat on by the government since the end of September.

The government won’t actually respond to the review’s findings until “early 2019”.

Much of the review deals with NBN fixed wireless and Sky Muster - how to improve immediate performance as well as how those portions of the network might be upgraded in future.

Changes to the Technology Choice program, a user-pays scheme to upgrade the connection of either individual premises or groups of premises, is one of the review’s major recommendations.

As iTnews reported in June, less than one percent of areas that explore a mass upgrade of their last-mile NBN access technology - called an area switch - actually go through with it.

This is likely a result of the high costs; NBN Co biggest area switch quote in the past two years was to a “business” applicant on the NSW central coast, coming in at $11,156 per premises.

“Under NBN Co’s current Technology Choice model, the company appears to charge the applicant the full incremental costs of the technology upgrade where an existing NBN service, such as satellite, is already available in the area,” the regional telecommunications review states.

“It can range from a few thousand dollars to millions of dollars for large complex areas.

“However, NBN Co’s Technology Choice model is not an attractive option for governments or businesses that are considering co-investment.”

The review said that “a number of state and local governments are interested in co-contributing to technology upgrades in rural and remote areas”; that is, they had money available to uplift their communities, but it was often not enough to cover the full cost of an area switch.

The review recommended that NBN Co pick up some of the costs.

“Given NBN Co’s commitments to upgrading its regional networks, it makes sense to move to a co-investment model that could harness other sources of funding to bring forward scheduled upgrades or to enable unscheduled upgrades in areas that are a priority for the co-investors,” the review said.

“Co-investment is a well-established feature of many programs that are designed to improve digital connectivity, whether at the Commonwealth or state level.”

Aside from future cost avoidance, one of the benefits of shifting portions of the regional and rural footprint off fixed wireless and satellite early in this manner would be that the capacity on those networks is saved for users that need it most.

“Sky Muster will remain a necessary technology to service Australians in some rural and remote areas, but steps should be taken to make alternate technologies available where feasible,” the review states.

“This will give NBN Co more options for those that will remain on the satellite service, such as further increasing data limits.”

The review also asks NBN Co to appoint senior executives - and even a board member - to “take responsibility for upgrading and improving the fixed wireless and satellite networks, as well as acting as regional advocates at the most senior levels of the company.”

In addition, it wants to see action from regulators to include fixed wireless and satellite speeds in mandated broadband monitoring.

“The lived experiences of many Sky Muster users falls well short of their needs and expectations,” the review said.

“The committee has heard from a number of people that the speeds consumers are receiving on the fixed-wireless network are not the speeds they were promised and are paying for.”

Any form of transparency around real world speeds on both fixed wireless and satellite would help users make informed choices and may also expose where in the end-to-end connection that problems lie, the review said.

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