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Fixing fibre-to-the-node across Australia could cost the NBN $7 billion: study

Sick of his internet dropping out simply because of heavy rain, Matt Hall decided there was only one solution: he would pay to have it upgraded himself.

The Brisbane software developer, who works from home, spent $11,000 through a special program run by NBN Co to pay to have his house upgraded.

After a few months, a visit to his local MP, and a lot of construction work, Mr Hall was upgraded from fibre-to-the-node (FTTN) to fibre-to-the-premises (FTTP).

Six months later a developer decided to rebuild homes just around the corner, and Mr Hall was surprised to find out that the new property owners were able to connect to his expensive fibre line at no extra cost, because he had already paid for it.

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“It’s incredibly frustrating, as a taxpayer, to know that I’ve essentially paid twice.”

While he doesn’t regret paying for better speeds during peak times, Mr Hall is among the many Australians questioning the NBN’s value for money.

Time to go back to square one?

Mark Gregory
Mark Gregory says NBN FTTN technology is already obsolete.

It has been nearly a decade since the NBN project began.

Associate professor Mark Gregory says that in that time, the NBN’s FTTN technology has become obsolete.

He believes network operators will need to go back to the beginning and upgrade FTTN connections, which cover about one-third of Australian households.

Dr Gregory, a vocal critic of the NBN, has run the numbers, and estimates it would cost $7 billion to upgrade the 4.7 million Australians who are on FTTN to FTTP connections.

“The costs of fibre-to-the-premises have been decreasing,” he said.

“There’s an economy of scale to doing all the homes at the one time.”

His estimates are based on NBN Co’s advice and have been published in the peer-reviewed Journal of Telecommunications and the Digital Economy.

Dr Gregory is the editor of the journal, but says his submission was assessed independently.

He is backed by senior telecommunications a##lyst Ian Martin, who says it is widely acknowledged that FTTN will need to be upgraded.

“The questions are, what gets upgraded, and in what form it gets upgraded,” he said.

“They’re quite big, expensive economic questions.”

Communication Minister Paul Fletcher said he defended “the technology choices that we made as part of the multi-technology mix”.

“The speeds available on NBN across all of the technologies are very much in line with the needs of the great majority of Australia,” he said.

He said it was important to remember the NBN was “not set in stone”, with $4.5 billion set aside for network upgrades over the next four years.

“We’ve evolved the mix of technologies with the greater use of fibre-to-the-curb,” he added.

NBN’s ‘toughest times lie ahead’, with questions over upgrades program

Ian Martin sitting at a desk with computers
Ian Martin says the NBN still faces upgrading issues and competition from 5G.(ABC News: Alison Branley)

But Mr Martin says the NBN’s biggest challenges still lie ahead.

They include its ability to give taxpayers a return on their $51 billion investment when NBN Co is faced with competition from 5G mobile, and the challenge of getting Australians to actually sign on to NBN plans.

If not as many people as forecast sign up to the NBN, it could mean the expensive infrastructure project doesn’t turn the expected profits.

But investors have confidence it probably will, with the telco recently getting a $6.1 billion loan for the next stage of development.

Dr Gregory estimates it would cost the company $1,500 to upgrade each household which is currently on FTTN, if it is done on a large scale.

That would be preferable for many of those, like Matt Hall, paying for upgrades themselves under the NBN’s Technology Choices Program.

Figures obtained by 7.30 show consumers have been quoted figures ranging from $3,000 to $33,000 to upgrade their individual fibre-to-the-node connections.

Communications Minister Mr Fletcher concedes there have been issues with the program, but says he continues to support it.

“One of the legitimate complaints about the Technology Choice Program at the moment, is that it can take quite a long time to get a quote, it’s not a very smooth customer experience, and I think it should be a better experience,” he said.

NBN says it is focused on making sure no premises are left behind.

Chief Network Deployment Officer Kathrine Dyer also points out that residents have 18 months after the NBN is installed to actually sign up to a plan.

“NBN has always stated that it will consider future network investment in the coming years,” she said.

“We certainly are open to different investment models as we move forward. And we are having ongoing discussions with others in relation to that.”

Ms Dyer has said the NBN is currently reviewing the Technology Choice Program to see how it can be made easier to access and cheaper for customers.

Has the NBN improved Australia’s internet?

Blue NBN cabling plugging into a computer server
Research shows the NBN has become less congested.(ABC News: Mitch Woolnough)

While much discussion of the NBN focuses on download speeds, those in the know believe a better measure is something known as latency.

It is essentially a measure of the lag between when a user sends a message and when it gets to its destination, and is considered a measure of congestion on the network.

a##lytics firm KASPR Datahaus a##lysed these ping times across Australia between 2013 and 2020 and found that, overall, Australia’s internet congestion has improved.

But it is still worse than the UK, US and Indonesia.

Data experts also point out that some of the improvement could be attributed to more people getting ADSL in that time, better infrastructure overseas, and regional demand.

The NBN’s big test came during COVID-19, when it held up “pretty well”, according to Mr Fletcher.

“The broadband that Australians needed was there for them in their hour of need,” he said.

The data shows most major metropolitan cities recorded only minor increases in congestion, while cities like Perth and Hobart actually improved.

TABLE: Ping times are a measure of network congestion

Ping times in Australia
2013 573 milliseconds
2020 304 milliseconds
Ping times around the world 2020
United States 169 milliseconds
United Kingdom 224 milliseconds
Indonesia 253 milliseconds
Change in maximum ping times during COVID-19
Melbourne 3.2%
Sydney 2.9%
Brisbane 2.4%
Canberra 5.2%
Hobart -4.39%
Perth -2.1%
New York 1.4%
London 5.7%
Jakarta 9.4%

Source: KASPR Datahaus

Was it all worth it?

MCU of Michella Westley-Smith standing by windows in her house, wearing a black and floral print blouse
Michella Westley-Smith is looking forward to finally connecting to the NBN.(ABC News: Shaun Kingma)

The residents of Sydney’s northern beaches can only dream about that sort of performance.

They are among the last in the country to get access to the NBN.

Michella Westley-Smith has been living with ADSL that regularly drops out.

She was surprised to hear her suburb, Narrabeen, would be among the last in the country to be connected to the NBN.

“I wouldn’t have thought we’d be that difficult,” she said.

She hopes high-speed internet will help with her young daughter’s education.

“When she goes to school it will definitely be a huge part of her learning experience,” Ms Westley-Smith said.

About 1,000 kilometres south, in the regional northern Tasmanian town of Smithton, the St Peter Chanel Catholic School has had high speed fibre-to-the-premises since 2012, when it was one of the first schools to get NBN under the Rudd-Gillard government’s initial roll-out.

A boy and a girl in school uniform sitting at a desk in a classroom using computers.
Fast NBN access has been beneficial for students at St Peter Chanel school.(ABC News: Alison Branley)

Digital technologies teacher Montana Bradley says it has made a major difference in the rural area, where many students’ only internet access at home came from hot-spotting their parents’ phones.

“It’s really important here in our rural school that we do teach them to grow up with this technology and how to do that appropriately,” Ms Bradley said.

“It’s amazing, it adds so much value to what they are learning about because it just gives a bit more depth.”

The NBN is scheduled to be completed on June 30, with the network available to 11.65 million homes, and 7.1 million of them signing up.

There will still be about 100,000 homes in the country’s most difficult terrain left to connect after June 30.

For taxpayers, questions of value for money remain, and the public report card is mixed.

Ms Bradley is convinced of the benefits.

“It enables schools like ours, up in Smithtown, in a rural area, to be able to have access to quality learning, and it’s something that we probably weren’t able to do beforehand,” she said.

But Matt Hall is less convinced.

“I think we’ve made the wrong choice,” he said.

“I think we’ve paid more money than what we originally were supposed to be paying.”

Communications Minister Mr Paul Fletcher says it is important to bear in mind that it comes down to a question of cost and time.

“A key reason we chose the multi-technology mix was to get the network rolled out as quickly as possible,” he said.

“There is little point in having some kind of theoretically pure network that almost nobody can get.”


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