Broken Promises, Cost Blowouts, Delivery Changes: The NBN Is A Mess

Malcolm TurnbullPhoto: Getty / Stefan Postles

Federal communications minister Malcolm Turnbull took the covers off the strategic review of the National Broadband Network today.

In doing so he reneged on a key election promise of download speeds of 25Mbps to the majority of the population by 2016. The funding for the project has also changed, with spending increasing to $41 billion, compared to the $29.5 billion proposed during the election.

“The project is in much worse shape as was represented by the previous government, both in terms of pace of the rollout and in terms of the peak funding,” Turnbull said today.

The review, led by new NBN Co chair Ziggy Switkowski, found the previous plan would have led to a horror blowout in peak funding to $73 billion, compared to $44 billion in the plan.

As a result the government now argues that its revised program, costing $41 billion, will save taxpayers $32 billion.

But the plan also involves a new technology mix, “embracing a range of technologies including Fibre to the Node and HFC (i.e. the cable broadband network), alongside Fibre to the Premises, fixed wireless, satellite as well as future advances in telecommunications technology.”

The review at least lays the groundwork for a solution, but what people should actually expect is suddenly very confusing. It even suggests some of the delivery will be through methods that haven’t been invented yet.

In short, the national infrastructure project is a complete mess.

But for some perspective, here’s what’s been achieved – or rather, not achieved – so far:

By June 2014, the rollout is expected to pass a total of only 357,000 brownfields premises with fibre, against a target of 1.129 million as set out in the August 2012 Corporate Plan; the total number of brownfields premises with an active NBN service is now forecast to be 90,000 versus the August 2012 Corporate Plan target of 420,000.

A fibre-to-the-node (fibre to boxes on street corners and copper to your house) solution was the basic plan that the Coalition took to the election. Under the review only around half of the country will be served by this. Around a quarter will get fibre-to-the-premises and up to 30 per cent will be connected using hybrid fibre coaxial – the existing pay-TV cabling system.

And the likely target is now to have 100mbps to two-thirds of the population by 2019.

Turnbull and NBN Co have only just taken the reins of the project so they get licence to tip a bucket over Labor the previous management for the mess they inherited. But the day the government adopts a new rollout strategy and targets based on this review, they’ll be accountable for its delivery.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at