The Alliance for Affordable Broadband (AAB) has ripped into the NBN Co business case summary, claiming the document reveals the National Broadband Network (NBN) will cost close to $55 billion, almost $12b more than its initial budget.
The Federal Government released the NBN Co business case summary after pressure from key independents. The 36-page document notes the capital expenditure for the NBN will be $35.7 billion, not $43 billion as originally intended.
AAB was formed in August and comprises of a number of telco industry figures including BigAir CEO, Jason Ashton, AAPT CEO, Paul Broad, and Pipe Networks founder, Bevan Slattery.
The group has been critical of Labor’s NBN plans.
It was concerned with the figures in the business case summary, claiming the cost of the NBN will far exceed the current price tag of $35.7 billion.
The $35.7 billion capital expenditure does not factor in the $13.8 billion to be paid to Telstra to decommission its copper network and migrate customers onto the NBN. Adding a total project debt interest of $4 billion and additional costs, the NBN is likely to cost close to $55.2 billion, the group said in an open letter.
Along with concerns of a cost blowout, the Alliance is perturbed by NBN Co’s decision to keep the price for the basic service offering static while intending to lower prices for all other product offerings.
Low income households that can only afford the basic service will suffer, the Alliance said.
“This is a disturbing development,” the Alliance said. “… [T]his is an outcome we must avoid at all costs. This demonstrates it is critical that existing competitive infrastructure is allowed to remain in place.
The Alliance is also cautious of NBN Co becoming a telco monopoly similar to Telstra, “extracting monopoly rents from those who can least afford it”
“We believe it is now clear that the fundamental business case for a $43 billion NBN is completely flawed. If it isn’t, why is NBN Co and the Government proceeding on the basis that it has to create a new monopoly?” the group said.