Turnbull’s NBN will cost users $6000 per home to connect: Conroy

NBN Minister suggests going with the Opposition’s fibre-to-the-cabinet network will cost users more than fibre-to-the-home approach
Minister for Broadband, Communications, and the Digital Economy, Senator Stephen Conroy (left), signing the Arianespace contract with the NBN

Minister for Broadband, Communications, and the Digital Economy, Senator Stephen Conroy (left), signing the Arianespace contract with the NBN

Opposition shadow minister, Malcolm Turnbull, wants to charge Australians up to $6000 for Internet access, according to Minister for Broadband, Communications, and the Digital Economy, Senator Stephen Conroy, who attributed the amount to a released price schedule from BT.

Conroy said Turnbull conceded to this, since the shadow minister has spoken abour incorporating fibre-to-the-home into his fibre-to-the-cabinet network.

“Malcolm says phone BT [about the pricing], but BT has put out their price schedule and it’s up to $6000 per home to connect,” he said.

“That’s in the UK where the cabinets are closer than in Australia.”

For that reason, Conroy reiterates that the NBN is the “best future technology.”

While Turnbull and Federal opposition leader, Tony Abbott, may be saying that the NBN will cost users three times more than they are already paying, Conroy points to an ACAP consumer study that found Australians are paying the same or less for NBN.

“So we are delivering the same or cheaper, and it is future proof,” he said.

Conroy likens the situation with the NBN to building a one lane Sydney Harbour bridge in 1927 because “we don’t have the vision to build than just for today.

“There were only 10,000 cars registered back then and only a few hundred crossed it,” he said.

“But they build infrastructure in 1927 that they knew would be used be used for 100 years.”

Conroy said that is the choice facing the NBN today, whether it will be a network which will have to be upgraded.

“Fibre to the home is what we need today for the future,” he said.

“Not to go halfway and spend a lot more money again.”

French example

During the signing of the satellite deal between the NBN and Arianespace, Conroy revealed that the French government has decided fibre-to-the-home is the best technology and quoted from a newspaper article that the nation will “terminate copper.”

“I am very confident that we, after consulting many experts around the country, are making the right choice,” he said.

Conroy emphasised that the NBN strategy was not a spur of the moment decision.

“You have to remember, we went through a tender, we hired the best technology experts to advise us on the tender,” he said.

“They came back to us and said don’t do-fibre-to-the-cabinet, [instead] do fibre-to-the-home as it is the best long term solution.”

While it may be easy to “get excited about the dates and what is happening now,” Conroy’s recommendation to detractors was to go back and look at the results of that tender.

For one, the tender sought guidance from all of the pertinent experts and the Government itself considered the results for three months.

“It is fashionable to say it was all done on the back of a napkin on a plane, which was part of a beginning of a process, but we actually had three months where we examined all of the options,” Conroy said.

Apparently, every Government agency that had advice was approached, from the CSIRO to NICTA to “all of the agencies that employ engineers.”

“They all came back and said the same thing; if you want the best long term solution, then go fibre-to the-home,” Conroy said.

For that reason, Conroy said he is “very relaxed” with the way the NBN debate has evolved.

“Any serious test will show fibre-to-the-home is the best long term solution,” he said.

Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.

More about: BT, CSIRO, CSIRO, IDG, IDG Communications, IDG Communications, IDG Communications, NICTA
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Comments

SteveB

1

Conroy has the unenviable task of defending the $47 billion of tax-payers money wasted on the NBN network. But this idiotic $6000 per household claim is as fictitious as all the other ALP lies! Is Conroy smoking something?

Rusty

2

Caught a train into the city the other morning - not many newspapers but lots of people had ipad type devices. Businesses, schools, hospitals, office blocks etc need fibre but the average Joe Blow wants portability - not to be hooked to the end of a terrestrial cable. Running fibre to every private residence in Australia cannot be done for $37b.

Full of it

3

Well Mr red underpants man... I've taken a bet that you won't be around to waste any more of our money come September 14th and by the way close the door when you leave.

karl_w_w

4

SteveB, your comment is riddled with falsehoods, allow me to correct them for you.

"Conroy has the unenviable task of defending the $47 billion"
It's $40bn, not $47bn. Of that, the government is funding $30bn, not all of it.

"of tax-payers money"
It is not tax-payers money, it is all debt that will be paid back. No effect on the taxpayer whatsoever (other than giving them modern telecoms infrastructure, of course).

"wasted on the NBN network."
The current copper network is worn, breaking, and costing $1bn every year to maintain. We need to replace it. You might like to call it wasted, I personally call it necessary. Perhaps if the Howard government hadn't created the unbreakable Telstra monopoly that got us into this position it wouldn't have been necessary.

"But this idiotic $6000 per household claim is as fictitious as all the other ALP lies!"
It is not ficticious. Turnbull has repeatedly pointed at the British rollout of FttN as the model we should be following, He used to point at NZ as well, but then NZ realised their FttN rollout was a bad idea and wasn't working out and he suddenly went quite about NZ. So Turnbull touts Britain as the template, and in Britain the cost is $6000. That is a simple fact, none of that has come from Labor, it has come from the Liberals and from uninterested foreign parties.

You should consider researching the facts for yourself instead of swalling Turnbull's BS, and aimlessly railing against a policy you apparently know nothing about.

Dean

5

SteveB: Do some research, it will not cost tax payers a cent and that is precisely what BT (the major telco in the UK) is quoting people that want to be connected with FTTH instead of FTTN. If we do rollout with a FTTN network, I sincerely doubt that you you'll have change from $6000 to get fibre from that cabinet to your home.

Rusty: Everyone wants portability and the telco's are more than happy to roll out the towers to support that, why should the government go down that path? Do you think that the consumer would be better off? How expensive is mobile data compared to adsl/cable/etc data?

Full of it: I'm not a betting man. I find better things to waste my time and money on. What I do like though, is informed debate. I don't give a toss on one polly vs another, I back the least incompetent. At the moment, I see an actual plan, in writing, that is out there for all to scrutinise. What do I see to oppose that? Absolutely nothing! No costings, no feasible plans, no working with telecommunications providers, no working with experts, no working with engineers, nothing to scrutinise at all - just an opposition. I would hope that by september I can base my vote on something other than "an opposition" because right now I'll be voting for the only viable plan I've seen.

greg365

6

What a bunch of pathetic comments above - why don't you three pray-tell go and make those stupid comments on a board like whirlpool?? Is that because you Liberal Trolls think you are smart? God help us if you losers believe all that you hear!!

greg365

7

PS... not Karl or Dean - just you other tossers!

Fourbypete

8

I'm dismissing the first three comments as protagonists. They actually don't support the LNP, they are just here to justify the existence of the comments section. Well done chaps! See how many people you upset with your anti NBN comments! You've sucked us all in, congratulations. Your parents must be so proud.

Full of it

9

Kevin Morgan

Are there projects of such self-evident value that they ought to be exempt from even the most rudimentary cost–benefit analysis? Seemingly so, according to the former Finance Minister Lindsay Tanner, as long as it’s the National Broadband Network (NBN). In May 2009, a month after Kevin Rudd had announced the $43 billion project, when asked about the absence of a cost–benefit analysis (CBA), Tanner said: ‘We had to make the clear decision that said this is the outcome we are going to achieve come hell or high water because it is of fundamental importance to the future of the Australian economy’ (quoted in Martin 2010).

A year later, Tanner remained unmoved by Opposition calls for a CBA and he dismissed such analysis as subjective because ‘cost–benefit analyses of the orthodox kind are basically captives to the assumptions you feed in’ (Martin 2010).

Stephen Conroy, the Broadband Minister, was similarly dismissive. When pressed in May 2009 about the lack of a CBA, he told opposition spokesman Senator Nick Minchin, ‘As I have repeatedly stated, this is an election commitment and we intend to deliver it.’ (Senate Hansard 2009). The election commitment had actually been a $4.7 billion upgrade of the copper network which also had not been subject to a CBA. Clearly, for Conroy, election promises don’t have to be evaluated, even when they have morphed from a $4.7 billion upgrade using ‘fibre to the node technology’ (FTTN) into a $43 billion ‘fibre to the home’ (FTTH) network..........

A fundamentally flawed project. The NBN will cost the taxpayer dearly, it is not fully funded, to date it's been built with borrowed money. As I said Conroy, close the door on the way out.

james

10

Who'd have thought whilst catching a train you wouldn't have seen many people with PC's connected to a phone line. Amazing. I wonder how many of those iPad users, when getting home, stayed on them or instead used their pc's with the fixed line internet. Can't say i've come across anyone stupid enough to choose wireless internet on purpose when fixed is available. You will never have the same quality with wireless, it will always have far worse latency, be subject to various reception issues and many other things that make it no decent substitute for fixed internet, to which the only downside currently being the copper cabling that is limiting us to last century speeds and is falling apart.

karl_w_w

11

Full of it:
"Clearly, for Conroy, election promises don’t have to be evaluated, even when they have morphed from a $4.7 billion upgrade using ‘fibre to the node technology’ (FTTN) into a $43 billion ‘fibre to the home’ (FTTH) network"
The absolute insanity of this sentence just shows how blinded by political bias you are. The project morphed from $4.7bn FttN to $43bn FttP BECAUSE it was evaluated, by third-party experts, who said FttN cannot be value for money and the best outcome would be FttP.

And now, 4 years later Turnbull is re-hashing Labor's old faulty policy and promising it will be better in every way. How he cannot or will not say.

This was a Labor election promise in 2007, do you REALLY think they would have opened themselves up to wild criticism by changing the plan so drastically if their original plan was viable? Show some common sense at least.

antman70

12

LOL the stooges are out today! SteveB - You claim Conroy is making up figures, and you start your comment with a fabricated figure for the the NBN cost! Please give us an estimate for the current costs of having 500-1000m of fibre laid to a premises from the nearest node? Why would it be so much cheaper here than in the UK?

Rusty - the NBN is not being paid for by taxpayers money, this furphy has been put to rest already. You might also want to check out data usage tends for fixed broadband vs 3g/LTE while your at it.
You guys are entitled to your own opinion but you are not entitled to make up your own facts...

gnome

13

@antman, seeing the three stooges posted 1-2-3 with only moments between them, and they share a lack of knowledge and common sense, we can probably assume they are in fact one stooge.

You would think they would know better than to post here where most people will see straight through their little political games.

IHope

14

The one factor that must be understood and evaluated within a framework of "critical thinking" is that the copper network can not provide a sustainable synchronous data connection wherein data speeds are fast in both directions, i.e. upload and download speeds must be equally fast for all our future needs.

All wireless technology, fixed or mobile is very expensive infrastructure to install and maintain, technically wireless services cannot provide high speed synchronous data services to users, unless every user had a dual channel service wherein uploads and downloads had unique assigned transmitters and receivers for each data direction, including transmitter towers at each premises for the needed signal strength. This would blow out the cost far beyond FTTP infrastructure investment. And wireless technology will become obsolete and need costly replacements over time.

Optical cable however is future proof, it currently links the internet backhaul between all connected countries so it makes good sense to extend it to each user globally.

Conversely, fibre to the node is equivalent to having a 6 lane freeway for the morning commute that takes a few minutes, and a single paved horse track for the journey home in the evening, taking many hours, because copper interconnects can never provide high speed data both ways. And eventually even the Luddites will need such a fast full duplex service, and it can't be easily and cost effectively retrofitted later.

Regardless of anyone's political persuasion, the underlying mentality remains that a majority of voters have tunnel vision regarding Internet connectivity so they make judgement based on what they have done online up till now, however the future will need to facilitate full duplex high speed data for everyone.

As Paul Keating stated, "the Labor party no longer have a compelling narrative", if so then they need to get one in place concerning the real strengths of FTTP, because the voters literally don't know what it is that they don't actually know.

If we are to be instead burdened with a coalition FTTN infrastructure, it will also be modelled on a context wherein private sector Telcos make fat middleman profits because that is the Modus Operandi of investment bankers like Malcolm T, it is in their DNA. Very quickly we will have a forced information super tollway. That is why the details about such issues as the socially equitable pricing provision of the coalition's proposal are not self evident.

Cont...

IHope

15

As to the actual national network cost, real or by virtue of propaganda in the negative, for perspective, each YEAR all taxpayers combined pay over 40 billion dollars just for the actual cost of our national defence portfolio expenditures.

If we are to believe that borrowing less to build a hobbled NBN will mean making more funds available for health and education, we would be suffering from Irish logic media spin, the Coalition will simply instead spend more on the Dept of Defence because the media don't cover that massive expenditure much, as it is not a political lever.

In truth it is ultimately the users of the NBN that will pay for the NBN, and not all the taxpayers. What infrastructure those users get and how much they will pay is the real issue and it is a 100+ years consideration, quality does not cost, it pays!

Mobile data is its own market and is a premium product, as an analogy, people that own cars also have need of expensive taxi services and public transport. Just as fixed service Internet users also need mobile Internet services. They are not interchangeable products.

Tom Brown

16

Turnbulls FTN may not be so dear, see http://www.tpg.com.au/fibre-optic
for TPG's special rate, just move to the CBD and it may only cost $1098 to connect you up now (minimum spend $16,013). This is the best price I have seen.

You could ask Telstra for a quote but they are a little more!

Shane

17

TPG fibre optic is not even in the same league as the NBN
Anyway TPG is rubbish I use to use them last year

Full of it

18

Karl-W-W

I normally don't reply to posters. However in this instance I'll make an expectation.

Who are these so called “experts” you allude to?, what were their terms of reference? what company and by whom were they commissioned to "evaluate the NBN"? at what cost as it is too big and complex for any individual to "evaluate"?

I'm all ears, we are all waiting, make my day.

karl_w_w

19

It was a long process, Full of it. When it was all said and done there was an audit of it, which is the most thorough documentation of it I've been able to find:
http://www.anao.gov.au/~/media/Uploads/Documents/2009%2010_audit_report_20.pdf
Page 44 for the process of choosing the experts, page 85 for the panel's conclusions.

I don't think the actual panel members themselves are mentioned in that audit, they are detailed here:
http://www.minister.dbcde.gov.au/media/media_releases/2008/016

Rusty

20

If people who insist on FTTH are not happy with the speeds of FTTN and or wireless, would they be prepared to pay for a fibre to be run from the node to their house? Or do they want me, (the taxpayer) to pay for it?

Rusty

21

James - We are building a new house out west. Every trady had a wireless internet device of some type - they used them to order supplies, to check on other jobs, to give quotes, to correspond with their families, take pics to send to other clients and so on. When they get home they put their devices aside to have a beer and be with their families.

karl_w_w

22

Rusty it's not just about speed, it's also about reliability, cost and ubiquity. FttN still uses the copper network, and the copper network is the source of all problems with out communications. The copper network is the REASON we need an NBN, using it to build an NBN is just ludicrous.

Copper is expensive to maintain and expensive to power, and will need to be replaced anyway - other countries are already starting to replace their FttN with FttP, so why does Turnbull want to go backwards and start rolling out FttN?

FttN is essentially just a method of bringing the exchange closer to the home, but you still get a lottery in regards to what speed you would get. Sure it might be 'up to 80mbps' but nobody is going to get that, just like nobody gets the 'up to 24mbps' of ADSL2+.

A pure fibre rollout fixes all these problems. It's very cheap to maintain (10% of copper maintenance cost) cheap to power (half of copper power cost), has upgradability to meet any future need without re-laying any cable (no other technology provides this), and it actually gives you the speed you pay for which improves it's profitability (because they can sell you higher speeds if you want them).

The only downside of optic cable is that the cable itself is slightly more expensive than copper, but the majority of the cost of laying it is still to pay the blokes who put it in the ground. It's easy to say the copper is already in the ground, but all of that copper will need to be tested for suitability (costing manhours) and a lot of it will need to be re-laid anyway (because FttN requires a much more robust copper network than what we have for ADSL2+). So why pay all this money to give ourselves FttN when we know full well that in a ~decade we're essentially going to have to pay again to build the FttP network that is ALREADY being built right now?

The copper that's in the ground is also not owned by the government, it's owned by Telstra. This gives Turnbull 2 options, buy or lease the copper off Telstra (bearing in mind the Telstra deal is already $11bn, I shudder to think what they'd want for the cables as well), or pay Telstra subsidies to build it themselves (I personally don't want my tax dollars handed over to Telstra so they can improve their network, and none of that money being returned to the government).

For the record, I couldn't give a toss about my own speed. I have thought about this and if I had NBN available here right now I'd probably get a 25/5 plan, I don't need speed, I care about the NBN because I know that FttN is just a waste of money.

"Or do they want me, (the taxpayer) to pay for it?"
Under the current plan, the taxpayer doesn't pay for it, which is one of the reasons I like it so much. The end user ultimately pays off their own connection cost through their monthly fee.

Rusty

23

Karl_w_w. I did some research about the funding and I see the NBN is funded by debt - the Gov. issues bonds and pays 4% and then it chargers the users of the system 7% so I can see what you are talking about. In theory after 15 years or so the Gov owns a completely paid for project. There is only one problem and that is the 7% the consumers end up paying. My brother-in-law is a real estate agent and housing developer. According to him 90% of tenants he lets houses to don't want a landline and in the new developments a lot of the purchasers don't like the idea of having to pay for fibre whether they want it or not and often don't connect. So for the rate to be 7% the Gov needs most people to connect up otherwise we the taxpayer will have to fill in the gap - you can bet on that. Now wireless, I know it has problems and is slower but it is rapidly improving, becoming cheaper and of course is portable. Fibreing up main streets, hospitals, office blocks, schools etc is a good idea but to fibre up all residences is going to cause financial problems.

karl_w_w

24

A lot of people don't want a landline because they don't want to be charged for line rental, with the NBN there is no line rental so part of that problem is gone. As it is NBN is cheaper than ADSL, and when it comes down to it there is no other choice, most people are going to have to get NBN connections.

Over 90% of data in Aus is downloaded over fixed lines right now (source http://www.zdnet.com/au/aussie-data-use-up-52-acma-7000008392/?s_cid=e551), imagine how much that might go to when people have access to the NBN. No matter what people tell you, there is an absolute limit to the amount of data that can be transmitted over wireless (or any other medium) and we're very close to that limit (http://connectedplanetonline.com/mag/telecom_shannons_specter/). The best way to increase wireless speed is to make more spectrum available (http://www.theregister.co.uk/2013/01/20/looming_spectrum_crunch/), which is a lot like having have 2 ADSL connections for more bandwidth. But there is only so much spectrum available to carry radiowaves, anything above about 2 ghz can't travel very far when there are obstacles (like buildings) and there are a lot of uses that compete for the spectrum beyond just mobile communications (http://upload.wikimedia.org/wikipedia/commons/d/df/United_States_Frequency_Allocations_Chart_2011_-_The_Radio_Spectrum.pdf).

A lot of people are avoiding the NBN completely because they think it's really expensive, and a lot of that is down to the Liberal party, Abbott still says that the NBN costs 3 times as much (http://www.tonyabbott.com.au/News/tabid/94/articleType/ArticleView/articleId/9083/Joint-Doorstop-Interview-Leumeah.aspx) which is nothing more than a bare-faced lie. If they don't kill the NBN, when the copper is switched off and people are forced to at least look at NBN prices, people will finally see that actually on comparison it's not expensive and word will spread among 'joe public'.

"So for the rate to be 7% the Gov needs most people to connect up"
This is true, the number from the corporate plan is 70% need to connect. In some areas where it's been available for over 12 months they already have 50%, and that's bearing in mind they haven't turned off the copper anywhere yet, so personally I think they should be fine on that count.

"Fibreing up main streets, hospitals, office blocks, schools etc is a good idea but to fibre up all residences is going to cause financial problems."
It may seem like that because it's such a huge investment, but you have to remember the NBN is going to solve a different financial problem: it costs $1bn and rising every year just to maintain the copper network (www.zdnet.com/au/nbn-to-save-up-to-au700m-in-copper-maintenance-costs-7000002846/). When you factor in the ongoing money saved you have to ask the question 'can we afford not to build it?'

Rusty

25

Karl - I hope you are right. I do agree there is better technology than copper and I do understand the enormous capacity of fibre - I have read in theory it is possible for one fibre to carry all telephone conversations in the world. People talk about wireless and bandwidth etc but two things - the continual development of wireless is not going to stop and secondly it is portable. The other thing is the labour party - so many great ideas they have had turn out to be a disaster for which we end up paying - so I don't trust their theories on rolling out fibre to everyone for very little cost - it sounds like a magic pudding. Yesterday I saw an interview with a Tasmanian farmer and he going to be paid $150K pa for not cutting down trees, according to the labour party his farm is a carbon sink - I was under the impression to be a carbon sink and to earn money, one had to grow trees - not just not cut them down. I had a run in with our local member 2 weeks ago when he tried to convince me the carbon tax had reduced the CO2 in Australia by some significant amount above what had been forecast. I asked him if that included the CO2 produced by the coal we export to which he replied "China will soon be introducing a carbon tax". I don't trust them Karl.

Andy E

26

Rusty, that does sound plausible to me. If you do grow trees, the area is and will stay *STABLE*. That's the main point there, I think. Once you decide to cut 'em down, the ground may erode sooner or later and get people into danger trying to get the carbon out of the soil.

Rusty

27

Andy - I enquired about my farm being a carbon sink 2 years ago and they told me the only way I could be paid was to plant new trees and have them assessed annually. What I feel is happening in Tasmania is the Gov is trying to shift the goal posts to make it look as though more carbon is being saved than actually is. I am not sure what you mean by *STABLE* - surely if you don't cut trees and plant new ones (as I think you are suggesting) you are storing more carbon than by just not cutting down trees. As far as I believe that is what carbon sinking is all about - existing trees have, for the most part, sunk their carbon and become carbon storages.

karl_w_w

28

"People talk about wireless and bandwidth etc but two things - the continual development of wireless is not going to stop"
This is true but there's only so much you can get out of it. It's a lot like with the copper lines, we started off with dial-up and since early dial-up there have been big improvements from slow to fast dial-up then ADSL then ADSL2+, but with ADSL2+ we reached the limit and there's nothing that can be done to change that other than making the copper length shorter with FttN. And then with FttN there is little or no room to improve which is why even Malcolm Turnbull agrees that everything will need to be fibre eventually.
You can already see this with our wireless networks, improvement in speed from say 3G to 4G is very small compared to in the past with WAP, then 2G, GPRS, EDGE, and then 3G where there were bigger gains.
Wireless struggles to cope with the relatively small amount of data it has to carry now, there's no way it could ever cope with carrying the 92% of home data as well.

"The other thing is the labour party"
I get that, I don't trust them or any other pollie. But to mind this isn't really a Labor project, all they have done is act as 'enablers' if you like. An all fibre rollout was originally suggested by an independent panel of experts, and despite some deliberation all Labor actually did was create NBN Co and tell them to do that. It was NBN Co that made the corporate plan which has since been analyzed to death and has come out clean.
The only decision Labor had to make was what percentage would get fibre. They couldn't really say less because that would mean more wireless towers and we all know how popular they are, and even if they wanted to say less fibre it couldn't be that much less because below about 90% fibre is actually cheaper than wireless. They couldn't say much more because when you start getting above ~93% it costs billions just to cover 1% more because of the distances involved.

Emmo

29

Dear SteveB, how is life as a Coalition staff hack, and do they at least pay well per forum entry you write for them?

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