For many Australians, the promise of cheap, reliable broadband remains a dream. So why is the National Broadband Network (NBN) still not delivering the result promised over a decade ago when the NBN rollout began?
Let’s take a look at the current state of the NBN and what the major political parties have announced ahead of the upcoming federal election.
What is available on the NBN?
The NBN uses a range of different technologies to connect users to the Internet, depending on the area they are in and the pre-existing network infrastructure available there.
Of the 11.8 million premises that can be connected to the NBN, the approximate number of premises in each “technology footprint” is:
2.5 million for Hybrid Fiber Coaxial. This is where old coaxial cables installed for broadband and television services have been adapted for use in the NBN network
4.7 million for Fiber to the Node/Basement (FTTN/B). This connection uses both copper and fiber optic cabling. Connection quality varies depending on the length of the copper cable and the technology used to support the data transmission
1.4 million for Fiber to the Curb (FTTC). This connection has fiber optic cabling closer to the premises, allows faster data transmission than FTTN and serves relatively fewer homes
1.1 million for new Fiber to the Premises (FTTP) land. This is a complete fiber optic connection directly to the network from new premises. This provides a reliable high-speed internet connection
1 million for FTTP brownfields. This is a complete fiber optic connection directly to the network from existing premises. This also provides a reliable high-speed internet connection
and 1.1 million for fixed wireless/satellite. This is where the data is transmitted to the premises via radio frequency signals. This connection is usually targeted to regional areas and is not always stable.
What did the major parties promise?
On March 22, NBN Co announced that new fiber upgrades would be rolled out as part of an ongoing A$4.5 billion upgrade plan.
By the end of 2023, up to eight million premises will become eligible to access the Home Ultrafast plan of between 500Mbps and 1Gbps. Currently, approximately 4.4 million premises connected to the NBN can access this plan.
For the FTTP upgrade to occur, NBN Co said eligible customers will need to place an order with a participating retail service provider for one of three highest speed tiers: 100, 250 or 1 000Mbps.
Of the 4.1 million premises that can be connected to NBN with FTTN, the current plan of the government and NBN Co foresees an upgrade from FTTN to FTTP for two million of these premises.
work plan is to provide FTTP access to 3.5 million of these premises – and of the additional 1.5 million premises, 660,000 will be in regional Australia.
In response to the 2021 Regional Telecommunications Review, the Coalition announced an investment of A$1.3 billion to continue upgrading regional, rural and remote telecommunications. If he wins the election, he has pledged to provide A$480 million to part-fund NBN Co’s upcoming A$750 million fixed wireless network upgrade to support regional communities.
This upgrade will move 120,000 premises from the NBN Skymuster satellite network — which currently provides NBN connections to remote premises — to a fixed wireless connection. This would provide up to 250 Mbps service to 85% of satellite network premises.
Removing 120,000 premises from the NBN Skymuster satellite network will also improve the service’s overall performance, delivering faster connection speeds and a increased download capacity from 55 GB per month to 90 GB per month.
The work also committed to supporting the planned fixed wireless upgrade of the NBN, and made a new commitment that “80% of the 7.1 million Australians living in regional and remote areas will have access to speeds of 100Mbps or more by the end of 2025. Currently, that’s just 33%”.
Too little, too late?
In the past, I have strongly criticized the Coalition’s decision during the 2013 federal election to move NBN to a hybrid technology model that included obsolete technologies – namely FTTN, and to a lesser extent HFC and FTTC. The results of this decision are now measurable.
In 2013, the government said the hybrid technology model would mean the NBN could be completed for A$29 billion by 2019, and Australian households would have a minimum of 25 Mbps by the end of 2016.
The true cost of deploying NBN has now exceeded 57 billion Australian dollarsand will probably be around 70 billion Australian dollars by the time the FTTP upgrade will roll out to about 93% of premises later this decade (hopefully).
But for now, the number of premises connected to the NBN using FTTP remains stuck below 30%. And it’s hard to see that number growing quickly unless there’s a quick change in direction after the next federal election.
Costs for NBN plans remain high, and ultimately, if consumers are unable to afford higher levels of speed, FTTP upgrade is unlikely to be adopted by the vast majority.
In the first-half 2022 financial report, NBN Co noted 76% of customers now use a speed level of 50 Mbps or more.
NBN Co’s financial report said average revenue collected per user was A$46 per month and earnings before interest, tax, depreciation and amortization (EBITDA) was A$1.5 billion. Meanwhile, borrowing from banks increased to A$24.7 billion from A$23.8 billion in the prior period.
Another important problem is the lack of equitable and universal access to the Internet. One aspect of universal access is that the Internet is provided free to people who cannot afford NBN packages.
Last November, opposition leader Anthony Albanese announcement an initiative to provide free NBN connection for one year to 30,000 families with children under the age of 15 at home, who did not have internet. No other political party has a comparable plan.
Another factor affecting adoption of the higher speed tier is the inability of government regulators to mandate minimum definition and quality for streaming media, especially TV and movies.
In Australia, the majority of streaming media, such as TV and movies, is delivered in a very low quality standard definition format. The very high media compression used by the online streaming industry (such as Netflix, Stan and Amazon Prime Video) means that high definition and 4K programs are displayed in poor quality.
In Europe and other parts of the world, television is now streamed and broadcast primarily using 4K compatible technologies. Australians have been buying TVs and other 4K-enabled devices since 2017, but haven’t been able to fully utilize their capabilities.
At this point, with the upcoming federal election approaching, Labor’s NBN policy is superior to that of the coalition.
Under the current policies of the two major political parties, the NBN will remain government-owned. But that doesn’t mean it can’t be put up for private sale in the future, if existing policies change.
And the current government’s NBN policy does not mitigate the consequences of the mistakes it has made over the past nine years. The glacial pace at which the government and NBN Co are improving services means that if the Coalition wins the next federal election, Australians can look forward to second-rate broadband for years to come.