Op Ed: Broadband turnaround powers past Labor’s sterile fibre wars
When COVID-19 came along and millions of Australians switched overnight to working and studying from home, they really needed good broadband.
In Australia’s hour of need, the national broadband network delivered.
Traffic levels jumped sharply – up 30 per cent at night and 70 per cent during the day on pre-COVID-19 levels – and Australians received the connectivity they needed.
It vindicates the strategy our Liberal Nationals government has followed to turn around the failing projectwe inherited in 2013.
After six years, Labor had connected only 51,000 premises to the fixed-line network. Today, 7.5million premises are connected and 99 per cent of all premises in Australia are able to connect.
Most weeks nearly 30,000 premises are connecting to the NBN – at some points this year it has reached 40,000.
Critical to the turnaround was our decision to move to a ‘‘multi-technology mix’’ of fibre to the premises, fibre to the node and hybrid fibre coax.
Compared to Labor’s insistence that every home needed fibre rolled all the way to the front door, our plan allowed a much quicker rollout. Had we stuck to Labor’s plan, today there would be about 5 million fewer premises able to connect.
Fibre to the node cost about half as much per connection as fibre to the premises, but it allowed for future upgrading if customer demand increased.
The strategic review we commissioned in 2013 was very clear on this point: at the right point in the future upgrading the network would make sense.
Today, the future has arrived.
We are announcing a $3.5 billion investment in the residential network that, by 2023, will allow three-quarters of all fixed-line premises to order ultra-fast broadband of up to 1000 megabits per second – also known as one gigabit per second.
This comes on top of the $700 million investment by NBN Co, announced this week, into a Business Fibre Initiative that will enable nine out of 10 business to order high-speed fibre broadband.
With these two commitments, about 8 million homes and businesses around Australia will be able to order gigabit speed broadband.
These investments will be financed by debt raised by NBN Co in the private debt markets. This is only possible because our methodical rollout strategy has delivered strongly rising connection numbers, revenue and cash flows.
We have consistently taken a prudent approach to capital investment in the NBN – and that will be a feature of this new investment as well.
NBN will roll optical fibre down many more streets around the country – but the lead-in fibre to the individual home will be built onlyw hen the customer orders a service that is of sufficiently high speed to require fibre.
This investment makes good financial sense: it will increase NBN’s internal rate of return from 3.2 per cent to 3.7 per cent. It makes good sense for users of the network.
It also makes good sense for Australia at a time when we need to stimulate our economy during the recovery from COVID-19.
Over the next two years, this massive infrastructure project is expected to create about 25,000jobs, including up to 16,600 in construction, engineering and project management.
At the same time it will provide a lasting boost to the productivity and competitiveness of Australian businesses as more of them are able to use high-speed broadband services.
This is an important moment in the evolution of the NBN. It got off to a bad start, poorly conceived and poorly implemented by Labor.
For seven years our Liberal Nationals government has followed a careful strategy to roll out the network, build user numbers and prove up the business model.
We have worked hard to turn the NBN from a political football into a credible and extensively used piece of national infrastructure.
With the NBN now a ubiquitous presence in our cities, suburbs and regions, we are finally moving past the sterile fibre wars of the past decade, and onto the next chapter in the story of one of our most important national assets.
This article first appeared in the Australian Financial Review on 23/9/20