Why our troubled NBN has turned into a massive blame game

There’s a lot of finger pointing going on when it comes to the NBN. Prime Minister Malcolm Turnbull says it’s all Labor’s fault and that the NBN was set up the wrong way with billions of dollars wasted.

And today if a customer complains about their NBN service the telco blames the NBN and the NBN blames the telco. And the customer is still stuck with the problem and paying for speeds they’re just not getting.

It was Malcolm Turnbull – when he was Communications Minister after the Coalition came to power in 2013 – who put the kybosh on Labor’s ambitious plan to run fibre to every home.

The reason? It was going to cost too much.

At that time costs had blown out dramatically and it was set to go north of a staggering $90b after Labor initially thought it would cost $43b.

So Turnbull decided to slam the brakes on.

Instead of fibre to your doorstep it was going to stop at the end of your street with decades old copper bringing your internet the rest of the way.

Was it the right decision?

Many would argue it was. The tens of billions saved could be directed to other areas that needed it.

But the argument against it was equally strong.

The vision outlined by Kevin Rudd in 2009 when he announced the fibre to the premises was great – on paper. What Labor didn’t calculate correctly was the enormous cost.

It’s initial $43b plan – which was compared to building the Sydney Harbour Bridge and the railway – was vastly underestimated.

Mr Turnbull – who has been a chief critic of the NBN since day one – inherited the network four years into construction when the bills were piling up.

The Coalition even campaigned that they would introduce Fibre to the Node to deliver a fast, yet affordable, NBN.

https://youtu.be/bKbANwmJyWc

And they were elected and given a mandate to follow that path.

Now fast forward to 2017 and the $49b budget has grown from the 2013 election pitch of less than $30b.

The mistake Labor made was taking on the project themselves and buying the existing infrastructure from Telstra and Optus to convert to the NBN as well.

Telstra and Optus profited handsomely in these deals before directing their energies to create cellular networks that would ultimately leave the wired NBN speeds in the dust.

If Labor had put the job out for companies to submit tenders it would have been a significant cost saving.

If it was put out for tender it would be the responsibility of those companies and they would have efficiencies in place to stay under budget.

Instead the Government has taken this on themselves and it had no choice but pony up the extra dollars as the costs blew out. That’s our tax payer’s money.

The goal was to create a massive gleaming asset that would generate enormous profit and then sell it.

Unfortunately that goal has fallen disastrously short.

New Zealand went down the tender path and it now has a world-class network. But, in fairness, it is a much smaller country with a smaller population so the logistics are completely different.

That’s all well and good but where’s the speed we were promised. You’d think when a government spends about $50b it’s going to better and faster than our existing connection.

Sadly, in many cases, it’s not.

And it’s here where the serious finger pointing starts.

Is it the NBN’s fault or the telcos’ fault?

Here’s how the NBN works. The NBN builds the network and sells it back to retailers (telcos) to sell to the customer.

That’s why you’re not locked in to one company when it comes to connecting the NBN – you don’t have to stick with Telstra or Optus. You can choose other companies like MyRepublic and Exetel or follow the advice of Aussie Broadband managing director Phillip Britt.

But it’s all about bandwidth – more bandwidth is like more lanes on a freeway – and the telcos claim the NBN has put too high a price on that bandwidth.

So technically it can be faster, but it would cost a lot more.

Telcos want to be competitive but they’ll price themselves out of the market if that price is exorbitant.

What most people don’t realise is that customers don’t have to settle for the technology that’s assigned to them.

So, for example, if you’re connection is Fibre to the Node and you want Fibre to the Premises you can switch. You just have to pay for it.

According to the NBN website Individual Premises Switch “can range from a few thousand dollars to tens of thousands for larger complex areas”.

Many households were lucky enough to get fibre to their doorstep for free. If others want it it’s going to cost them a lot of money. That’s how random it’s become.

In our case, our home is scheduled for Fibre to the Curb between April and June 2018. That means they will run fibre along my street to the nearest telecom pit and then link that to the existing copper line that runs to our home.

Initially the plan was to repurpose the Optus HFC (hybrid fibre coaxial) cable which is delivering my existing internet at decent speeds – I’ve already got speeds up to 100Mbps down but a measly 1Mbps up.

But the NBN decided that HFC cable wasn’t up to scratch so it is replacing it with fibre.

Time will tell whether I retain the speed I’ve already got and improve my upload speeds which to me are just as important as my downstream speed.

So where do we go from here?

Have we missed the boat to create a world-class high-speed broadband network?

Should we have just made the decision to go all the way with fibre? Go big or go home right?

Sure – if money was no object. That’s what we would have done.

This is the compromise we have to live with.

In the future, it may be necessary to upgrade the NBN to be completely fibre – but at what cost?

Would it have been cheaper to do that in the first place or to do it later? No one knows.

Meanwhile wireless technology continues to improve and by the time the NBN hits its projected 2020 completion date we’ll have 5G connectivity with speeds exceeding 1Gbps – more than ten times faster than the NBN.

In fact, we can already achieve 1Gbps today with 4G LTE – but 5G could be 10 times faster than that.

If we had our time again with the NBN – things would be a lot different.