For many Australians, the promise of cheap, reliable broadband remains a dream. So why is the National Broadband Network (NBN) still not delivering the results promised over a decade ago when the NBN rollout began?
Let’s take a look at the current state of the NBN and what the major political parties have announced ahead of the next federal election.
What is on the NBN?
The NBN uses a range of different technologies to connect users to the Internet, depending on what area they are in and what pre-existing network infrastructure is available there.
Of the 11.8 million properties that can be connected to the NBN, the estimated number of properties in each “technology footprint” is:
2.5 million for Hybrid Fiber Coaxial. Here older coaxial cables for broadband and television services were adapted for use in the NBN network
4.7 million for Fiber to the Node/Basement (FTTN/B). This connection uses both copper and fiber cabling. The quality of the connection depends on the length of the copper cable and the technology used to support the data transfer
1.4 million for Fiber to the Curb (FTTC). This connection has fiber optic cabling closer to the property, enables faster data transmission than FTTN and serves relatively fewer households
1.1 million for Fiber to the Premises (FTTP) greenfields. This is a full fiber optic connection directly from the new building to the network. This ensures reliable fast internet
1 million for FTTP brownfields. This is a full fiber optic connection directly to the network from an existing building. This also ensures reliable fast internet
and 1.1 million for fixed wireless/satellite. This is where data is beamed to the property via radio frequency signals. This connection is usually aimed at regional areas and is not always stable.
Read more: NBN upgrades explained: How do they deliver faster internet speeds? And will the regions miss something?
What have the major parties promised?
On March 22, NBN Co announced that further fiber upgrades would be rolled out as part of an ongoing A$4.5 billion upgrade plan.
By the end of 2023, up to eight million buildings will be eligible to access the Home Ultrafast plan between 500 Mbps and 1 Gbps. Currently, approximately 4.4 million NBN-affiliated properties have access to this plan.
For the FTTP upgrade to take place, NBN Co has said that eligible customers must place an order with a participating retail service provider for one of the three highest speed levels: 100, 250 or 1,000 Mbps.
Of the 4.1 million properties that can be connected to the NBN with FTTN, the current plan of the government and NBN Co provides for an upgrade from FTTN to FTTP for two million of these properties.
Labour’s plan is to grant FTTP access to 3.5 million of these properties – and of the additional 1.5 million, 660,000 will be in regional Australia.
In response to the 2021 Regional Telecommunications Review, the coalition announced a A$1.3 billion investment to further improve regional, national and remote telecommunications. If it wins the election, it has pledged to provide A$480 million to partially fund NBN Co’s forthcoming A$750 million fixed wireless network upgrade to support regional communities.
This upgrade will shift 120,000 buildings from the NBN Skymuster satellite network – which currently provides NBN connections to remote buildings – to a fixed wireless connection. This would provide up to 250 Mbps service to 85% of the buildings in the satellite network.
Removing 120,000 buildings from the NBN Skymuster satellite network will also improve the overall performance of the service, with faster connection speeds and download capacities from 55 GB per month to 90 GB per month.
Labor has also committed to supporting the planned upgrade of the NBN’s fixed wireless network, further pledging that “80% of the 7.1 million Australians living in regional and remote areas will have access to speeds of 100 Mbps or more. 33%”.
Too little, too late?
In the past, I strongly criticized the coalition’s decision in the 2013 federal election to move the NBN to a hybrid technology model that included legacy technologies, namely FTTN, and to a lesser extent HFC and FTTC. The results of this decision are now measurable.
In 2013, the government said the hybrid technology model would mean NBN could be completed at A$29 billion by 2019, and Australian households would have at least 25 Mbps by the end of 2016.
The actual cost of NBN’s rollout has now exceeded A$57 billion, and will likely be around A$70 billion by the time the FTTP upgrade rolls out to some 93% of buildings later this decade (hopefully).
But for now, the number of NBN-affiliated properties that use FTTP remains below 30%. And it’s hard to see this figure rise any time soon unless there’s a quick change of course after the next federal election.
The cost of NBN subscriptions remains high, and ultimately, if consumers cannot afford higher speed levels, the FTTP upgrade is unlikely to be adopted by the vast majority.
In the financial report for the first half of 2022, NBN Co indicates that 76% of customers now have a speed level of 50 Mbps or higher.
NBN Co’s financial report states that the average revenue per user is A$46 per month and the earnings before interest, taxes, depreciation and amortization (EBITDA) is A$1.5 billion. Meanwhile, bank lending rose to A$24.7 billion, from $23.8 billion in the previous reporting period.
A lack of equitable and universal access to the Internet is another major problem. One aspect of universal access is that the Internet is offered for free to people who cannot afford NBN subscriptions.
In November last year, opposition leader Anthony Albanese announced an initiative to provide free NBN connection for a year to 30,000 families with children under 15 who do not have internet access. No other political party has a similar plan.
Another factor influencing the adoption of higher speeds is the failure of government regulatory agencies to impose a minimum definition and quality for streamed media, especially television and movies.
In Australia, the majority of streamed media, such as television and movies, is presented in a very poor quality standard definition format. The very high media compression used by the online streaming industry (such as Netflix, Stan and Amazon Prime Video) means that high-definition and 4K programs are displayed in poor quality.
In Europe and other parts of the world, television is now mainly broadcast and streamed using 4K technologies. Australians have been buying 4K televisions and other devices since 2017, but have not been able to fully exploit their capabilities.
Right now, in the run-up to the next federal election, Labor’s NBN policy is superior to that of the coalition.
Under the current policies of both major political parties, the NBN remains state-owned. But this does not mean that it cannot be offered for private sale in the future, if existing policies change.
And the government’s current NBN policies are not mitigating the consequences of the mistakes it has made over the past nine years. The icy pace at which the government and NBN Co are upgrading their services means that if the coalition wins the next federal election, Australians can expect to have second-rate broadband for years to come.
Read more: Coronavirus: Telcos pick up where NBN fails. This is what it means to you