A $4.5b government injection is poised to deliver blistering-fast 1Gbps national broadband network (NBN) services to 75 per cent of Australian households, but industry figures lambasted the investment after “a decade’s worth of lost opportunity” that has left Australia with some of the slowest broadband in the developed world.
Some six million households will be able to request an upgrade to fibre-to-the-premises (FTTP) services, which will replace the connection to their home with a fibre-optic lead-in capable of carrying data services at speeds of 1Gbps or, technically at least, faster.
NBN Co is “bringing forward the next phase of planned network investment to help meet future demand for higher speed broadband services,” the company said in announcing changes that will finally give frustrated customers a faster alternative.
The FTTP policy builds on newly-announced plans to roll out 240 largely regional Business Fibre Zones that, Minister for Communications, Cyber Safety, and the Arts Paul Fletcher said would give 9 in 10 businesses access to speeds of up to 1Gbps.
Spruiking the policy during a National Press Club (NPC) speech, Fletcher said the sustained growth in demand during the COVID-19 pandemic had made it clear Australians were ready for an upgrade to faster speeds.
The upgrade will include $3.5b in direct capital investment and the creation of 25,000 jobs – sure to be appealing as the country struggles to find its way out of the pandemic-led recession.
Back to the future
The announcement stirred up frustration for the original architects of the NBN, which was originally designed to deliver FTTP services to 93 per cent of Australian households.
After years spent laying the groundwork for NBN Co to pull itself up by its bootstraps, Labor lost the 2013 election and the newly-elected Abbott government paused construction after a series of partisan reviews ultimately supported the multi-technology mix (MTM) architecture favoured by then Communications Minister Malcolm Turnbull.
Despite internal NBN Co modelling showing the MTM approach would be inadequate and ineffective – and tests confirming FTTP would be cheaper in the long term – the Abbott government opted to cobble together existing networks including, most controversially, the Telstra’s copper access network (CAN) that it bought for $11b in 2014.
The Liberals’ economic modelling turned out to be wildly inaccurate, with original projections of a $29.5b cost a distant memory and the new investment pushing the cost of the network towards $57b – some $14b more than Labor originally budgeted for the project.
With the Morrison government now pivoting back towards the original plan, former Prime Minister Kevin Rudd told the ABC the MTM had been “a massive waste of taxpayer dollars in terms of lost opportunities” and called for the Auditor-General to “have a strong hard look at” the technology and investment strategy that had driven the MTM rollout in recent years.
“Mr Morrison deserves no credit whatsoever” for deciding to invest in FTTP after so many years berating Labor’s own plan to do the same, Rudd said, calling the decision a “monumental policy backflip”.
Former Communications Minister Stephen Conroy was more sanguine, telling Information Age that he welcomed the government’s decision to move to FTTP at last.
“It’s a pity that Malcolm Turnbull wasted $20b of taxpayer money on a second-rate network that wasn’t fit for purpose,” he said – ironically echoing Turnbull’s 2013 claims that Conroy’s network had done the same – “but Australians will now be able to access a future-proof network that allows Australia to become a leader in the digital economy.”
Anything but a leader
Australia’s position in world broadband rankings has slipped steadily over the course of the MTM rollout, dropping from 30th in 2013 to 60th in mid 2016 – with the latest figures ranking our broadband the 68th fastest in the world, and the fourth slowest among OECD nations.
The government’s FTTP policy backflip proves that the government “made a very big mistake”, former NBN Co CEO Mike Quigley, who worked with Rudd and Conroy from 2009 to 2013 to establish the network, told ABC Radio after the announcement was made.
“The decision-making done at the time was flawed and based on the wrong assumptions and premises,” Quigley said.
“We knew at the time that people weren’t going to need those high speeds back in 2009,” he continued, “but we had projections that speeds were going to increase, and demands for downloads and uploads were going to continue increasing, and that is precisely what has happened.”
Failing to provide enough headroom, he said, has left successive governments scrambling to stay ahead of consumer demand.
“They lost that bet,” Quigley said, “and no amount of rationalising, or saying the world has changed with COVID-19, explains why you would spend a decade saying that FTTP is a ‘gold plated solution’ that Australians don’t need – and now say that it really was the right answer all along.”
