The real NBN Strategic Review released

Shadow Minister for Communications Jason Clare today released the real Strategic Review of the Coalition’s second rate NBN plan.

This is the secret advice handed to Malcolm Turnbull in his first few weeks in the job.

“This document is an unadulterated, uncensored and unamended analysis of the Coalition’s broadband plan by NBN Co before Malcolm Turnbull brought his mates in to give him the answers he wants,” Mr Clare said.

“It is now obvious why Malcom Turnbull won’t release his incoming Minister’s brief – it is scathing about the Coalition’s second rate NBN plan.”

It reveals that:

1. Building the NBN in two stages to achieve minimum speeds of 25mbps by 2016 and 50mbps by 2019 is the wrong approach and “not recommended”. It says that taking this approach will cost more and take longer.

2. Achieving the Coalition’s election commitment that all Australians will have access to minimum speeds of 25mbps by 2016 is “unlikely”. The obstacles to achieving this include:

  • Renegotiation of the Telstra Definitive Agreement, Optus Agreement and final ACCC approval;
  • Required legislative changes;
  • Gaining access to the copper network and data on the true state of the copper network;
  • The successful deployment of a trial of VDSL2 technology;
  • Identifying node locations and getting approvals from electricity companies and local councils;
  • Completing procurement processes for new suppliers;
  • Developing IT capabilities to support service delivery over the copper network;
  • Re-skilling the external workforce and recruiting new suitably qualified employees;
  • Re-consideration of the Special Access Undertaking and Wholesale Broadband Agreement.

3. A fibre-to-the-node network will result in lower revenues of up to 30 percent and this will impact on the ability of NBN Co to raise debt.

4. The cost of fixing Telstra’s old copper network is unknown to NBN Co, the Government and perhaps even Telstra.

5. The cost of operating and maintaining the copper network is estimated to between $600 million and $900 million per year.

6. A managed lease arrangement with Telstra for access to the copper could create structural separation issues.

7. Fibre-to-the-premise should continue to rollout at current volumes until the second rate fibre-to-the-node can be rolled out at full capacity.

8. A minimum speed of 50 megabits per second can’t be guaranteed using copper. This is dependent on a number of factors. These include:

  • Copper loop lengths;
  • Quality of the copper lines, including joints;
  • Quality of in-home wiring;
  • The use of “bridge taps” – which may be present in 30% of lines
  • The use of “pair gains” – which may be up to 4.5% of lines;
  • The use of line conditioning equipment such as loading coils and digital repeaters – which may be up to 3% of lines
  • Interference from external sources
  • Spectral compatibility issues if existing ADSL services continue to operate
  • Use of untwisted aerial lead ins which can act as an antenna that creates interference

9. A fibre-to-the-node network will need to be upgraded in the future (by deploying fibre closer to the end user premises) to meet demand for higher speeds. This will drive higher capital expenditure costs in the future.

10. NBN Co will not be able to offer the same products on a fibre-to-the-node network that they were offering on the fibre-to-the-premises network. Lower upload speeds and lack of guaranteed bandwidth will impact business, healthcare and education. Videoconferencing and cloud services will be reduced.

11. There may be community concerns over placement of the nodes. The cabinets are larger than any equipment required for a fibre-to-the-premises rollout and they need to be connected to a power supply. Community concern over the placement of these nodes may impact council approvals and impact the timeframe of a fibre-to-the-node rollout.

12. Some medium-sized businesses and all large enterprises will need to buy their own fibre internet connections as the fibre-to-the-node network will be unable to support many business-class features offered under a fibre-to-the-premise model.

“The real Strategic Review shows that Malcolm Turnbull’s second rate network will not cut it. Australians need and deserve a world class broadband network and only Labor’s fibre-to-the-premises model will deliver that.”

A copy of NBN Co’s Assessment of the Coalition’s Broadband Policy prepared for the Incoming Minister’s brief can be found here.