National Broadband Network - Developments and Analyses 2014 - Australia

National Broadband Network - Developments and Analyses 2014 - Australia

After the September 2013 election in Australia, and with a new government in charge, a number of reviews were announced that will shape the future direction of the NBN. For a start, the Minister asked NBN Co to carry out its own review first, based on the original specifications of the NBN it being a majority FttP rollout.

This indicates that at a strategic level the NBN will most likely continue fairly smoothly. There will most certainly be changes made to the rollout but these could quite possibly be implemented by NBN Co itself, now that it has largely been relieved of the political pressure under which it had to operate during the period of severe attacks by the then Opposition, which started off with a policy to kill the NBN. At this stage at least the NBN now has bipartisan support.

Also, because of the likely continuation of the NBN many of the issues discussed below remain unchanged, and so will require the attention of the government, and/or will need to be taken into account in future policy developments. BuddeComm has already indicated support for certain changes to the NBN in relation to greenfield developments and multi-dwelling units (MDUs) and these issues will now receive significantly more attention than they have had in the past. Again, the comments and analyses made on these issues remain relevant under the new government.

The rollout has seen delays, but at this stage there are no indications that this will affect the longer-term outlook for completion of the project. The review will obviously shed more light on this, but so far the issues seem to be more one-off and/or resolvable for instance, by being more flexible in the use of technology, for example in MDUs.

A serious omission remains that there is no policy or information that takes into account the importance of the NBN for the digital economy, the opportunity to use it to increase digital productivity, and where this infrastructure fits in relation to e-business, e-health and e-education.

As iiNet so pointedly indicated, all these NBN decisions are made within a policy vacuum. Subsequent governments have failed to first establish the foundations for why we need an NBN and from a social and economic point of view what are we as a nation going to do with it.

There is still a misalignment between the social and economic benefits of the NBN and NBN Co's business plan. The new government wants to prioritise the underserved areas and is looking at other technologies to create some early wins. The question, however, is how much can be changed at this late stage and also whether it will really lower costs and speed up the rollout.

Australia is highly reliant on its income from natural resources and, like other resource-rich countries, it needs to diversify its economy. Interestingly, it is these resource-rich countries that are leading the rollout of FttP around the world. The main reason for those governments becoming involved in digital infrastructure is to increase their country's competitiveness and productivity in areas other than resources.

Companies covered in this report include:

NBN Co; Telekom Deutschland; Belgacom; Telekom Austria; Fastweb; Swisscom; Strata Community Australia (SCA); Telstra; Optus; AusBBS; iiNet; Internode; TPG; and the Australian Bureau of Statistics.

How independent is NBN Co?

If we listen to comments made by the chairman and the CEO of NBN Co regarding the current plan one would have to ask who is running the company. The current NBN Co team is certainly raising some key issues:
they have questions regarding some of the conclusions of the Vertigan report;
they are more positive about their new radically changed FttP model;
they are worried about the government allowing competition in the FttB space; and
they have questions about the long-term financial constraints put on them by the government.

The question, therefore is is it the company itself running the business, or is it the minister and his advisers?

The minister has consistently blamed the previous government for all the mistakes NBN Co made under its watch, but what will happen after the next election? Will a new government (if that is the outcome) have a similar right, to blame this government not only for a lack of vision but also for its own interference in the technical choices and other affairs of NBN Co?

What was launched as a political attack on the previous government, a so-called faster and cheaper NBN solution based on the multi-mix technology, became full-blown government policy simply through the appointment of the right people those who would agree with this policy and the ensuing claim that this is indeed the best solution, despite the fact that international evidence paints a totally different picture.

In relation to faster' there have been ongoing delays, both with the numerous investigations and with the rollout with further delays anticipated now well into 2015. While there is no doubt that good work has been done to fix the rollout problems that they inherited, it was very clear from the beginning that sooner' would be one of those political non-core promises.

While the minister has always claimed to be technology-agnostic and regularly steps back and says publicly that the technology choice is that of NBN Co, the company knows that the minister is absolutely committed to his own policy guidelines. So what is the difference here between the previous minister, Stephen Conroy, and Mr Turnbull in relation to the degree of political interference in the NBN?

NBN Co remains a political football. It is almost a matrix moment for NBN Co choose the red pill or the blue pill. But we all know what happened to the previous NBN Co management team. Remember how quickly that team was flushed when they were assessed to be determined to continually state the inconvenient truth'.

This despite the fact that this same team was supported by all its partners and won the admiration of the Australian telecoms industry, as well as that of many outside Australia. The international press raved about Australia's bold plan. Many held up the Australian NBN as a shining light that it was actually grasping the nettle and realising that fibre was in fact a utility commodity. The Australian initiative was instrumental in the formation of the UN Broadband Commission. And 70% of the Australian population prefers the original plan.

So, were all those people wrong?

The same people are now shaking their heads at the farce it has become a Communications Minister publicly supporting a study that states that a consumer will only need 15Mb/s in 2023.

This was also questioned by Bill Morrow. But was he allowed to look at his company's own radically changed FttP plan that could indeed deliver FttP in a competitive way? And was NBN Co, for example, allowed to look at FttP rollout plans along the lines of the models used by Google in the USA (seeking active participation of their customers in planning their rollouts); or those used in the Netherlands (working with local councils that are eager to deliver FttP to their businesses and residents)? These are all cost-saving alternatives with a proven record overseas.

If the minister is genuine about being independent and serious regarding his own statement that FttP is the best end solution, why aren't we investigating it?

1. Synopsis
2. Biggest threat to NBN is political panic
3. The unravelling of the NBN
4. Open up the metropolitan NBN market to competition
5. Latest NBN Developments- September 2014
5.1 FttP Rest of the world is wrong but Australia is right?
5.2 If people don't need NBN speeds, what about their computers?
5.3 Let's get on with the NBN
6. NBN-related jobs increase by 248% since review
7. Competition in the telecoms industry is dwindling
8. Market-led demand for FttH is picking up
9. TPG highlights the fragile NBN environment
9.1 Market-led vs. Government intervention
9.2 You cannot unravel the NBN
9.3 The fragility of the wholesale-only model
9.4 NBN is a finely balanced exercise
9.5 TPG exposes weaknesses in NBN retail models
10. NBN assessment April 2014
10.1 Introduction
10.2 Reviewing the last few weeks
10.3 From reviews to leadership
10.4 Tension with the review commissions
10.5 The end goal will remain FttH
10.6 The NBN future looks bright
11. Is the government opening a NBN Pandora's box?
11.1 Pandora's Box
12. Aligning broadband and healthcare
13. Government reneges on election promises
14. Where is the economic plan for the post-manufacturing era?
15. NBN debate continues in a policy vacuum
16. Regional councils concerns over the NBN changes
17. Privatisation of NBN is not popular
18. The NBN will always remain in Beta.
19. Will the NBN be unravelled?
19.1 The delicate nature of a wholesale-only model
19.2 Structural separation allows for wholesale-only model
19.3 No demand for fibre-based services?
19.4 National digital productivity
20. Analysis of NBN 2.0
20.1 Two competing NBN offerings
20.2 The multi-technology NBN
20.3 Design and rollout problems
20.4 Contracts, negotiations and regulations
20.5 The execution
20.6 Current FttH plan requires simplification
20.7 So on to the next review in 2016?
20.8 Still missing a national vision
21. Telstra's cashflow may suffer from NBN rollout delays
22. What PRISM, credit card hacking and Chromecast have to do with FttH
23. The pros and cons of vectoring
24. Will LTE steal the broadband revolution?
25. Multi Dwelling Unit broadband
26. Is the NBN Co business model flawed?
27. NBN telecoms or digital infrastructure a SAU question
28. Pilbara a lost NBN opportunity
29. NBN leadership or NBN procrastination
30. The Dutch Disease, broadband and the mining boom
31. NBN could slash telecoms maintenance costs
32. Broadband demand-side management
33. The NBN and the opportunity for virtual' players
34. Will infrastructure constrain the digital entertainment market?
35. Will the half-built HFC disaster be repeated?
36. Four million households within reach of the NBN by 2015
37. Digital infrastructure essential to manage the transition to the e-world
38. Related reports

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook