NBN Rollout Scrapped

[NBNMyths]

One would think that if FTTP is shown to be a more appropriate installation to adopt the government would pursue it.

Why would Governments start doing the most appropriate thing now?

For god sake it couldn't cause any more flack than they are already copping, just read any Fairfax paper, apparently they are backflipping on everything anyway.

Well they are, aren't they? There have been more Coalition backflips in the last 3 months than at an acrobats convention.

Everything I've read just makes reference to the FTTN anyone got any links to how the FTTP was working out.

The report says that FTTP would be completed by 2023-4 (2-3 years late). They say cost if unchanged would be $56bn capex and $73bn peak funding (assuming $30bn equity and the rest debt) or $63bn (all equity).

But they also say they could do FTTP cheaper, and that NBN Co had already started making changes to do so. Under that scenario (still 93% FTTP), it would be $44bn capex ($4bn over Labor's estimate) and peak funding of $64bn (equity+debt) or $54bn (all equity).

I'm pretty sure they are assuming debt without a Govt guarantee, meaning debt costs would be higher.

I wonder what happened to Turnbull's "conservative" pre-election cost of $94bn with a 40 year timeframe?

 

[sptrawler]

The report says that FTTP would be completed by 2023-4 (2-3 years late). They say cost if unchanged would be $56bn capex and $73bn peak funding (assuming $30bn equity and the rest debt) or $63bn (all equity).

But they also say they could do FTTP cheaper, and that NBN Co had already started making changes to do so. Under that scenario (still 93% FTTP), it would be $44bn capex ($4bn over Labor's estimate) and peak funding of $64bn (equity+debt) or $54bn (all equity).

I'm pretty sure they are assuming debt without a Govt guarantee, meaning debt costs would be higher.

I wonder what happened to Turnbull's "conservative" pre-election cost of $94bn with a 40 year timeframe?

So to sum up, the report says the cost for FTTP would cost $73, isn't that about double what Labor projected?

 

[NBNMyths]

So to sum up, the report says the cost for FTTP would cost $73, isn't that about double what Labor projected?

No. Did you actually read my last post?

It says the capex for FTTP could be $44bn ($5bn more than Labor projected), with a peak funding of $54bn (assuming 100% equity or Govt guarantee debt) which is $10bn more than Labor projected. Both assuming the rollout was done with identified efficiency gains.

The $73bn figure is a "worst case" combination of the Coalition's lower equity injections, combined with no Govt guarantee on the debt, combined with no improvements in the efficiency of the FTTP rollout (even though those efficiencies have already started).

 

[NBNMyths]

http://www.zdnet.com/its-time-for-turnbull-to-swallow-his-nbn-pride-7000024263/

Summary: It's not too late for Malcolm Turnbull to do the right thing – and not just the cheapest thing – for Australia. First, he'll have to accept the Strategic Review's damning indictment of Coalition NBN policy – and its suggestion that it will cost just $800m more per year to build a network that will last 100 years, not five.

 

[sydboy007]

lets not forget the Coalition costs do not include access to the copper network.

It also reuses the HFC network which has been under invested in for years by Optus and Telstra. There's not mention of how MDUs in the HFC footprint will get upgraded broadband unless the private sector steps in, but then the cost will likely be noncompetitive.

The current costing comparisons are not apples to apples because the current Govt is not upgrading a significant proportion of the network.

 

[sptrawler]

No. Did you actually read my last post?

It says the capex for FTTP could be $44bn ($5bn more than Labor projected), with a peak funding of $54bn (assuming 100% equity or Govt guarantee debt) which is $10bn more than Labor projected. Both assuming the rollout was done with identified efficiency gains.

The $73bn figure is a "worst case" combination of the Coalition's lower equity injections, combined with no Govt guarantee on the debt, combined with no improvements in the efficiency of the FTTP rollout (even though those efficiencies have already started).

Well I will sit on the sideline and watch the outcome.

 

[drsmith]

It says the capex for FTTP could be $44bn ($5bn more than Labor projected), with a peak funding of $54bn (assuming 100% equity or Govt guarantee debt) which is $10bn more than Labor projected. Both assuming the rollout was done with identified efficiency gains.

That scenario though was not Labor's FTTP NBN rollout.

I thought the strategic review was quiet generous to the schedule on Labor's model bearing in mind the delays thus far.

 

[drsmith]

Rollout update for the week to December 8

Approximately 5000 brownfields and 1000 greenfields passed in the past week. Brownfields now passed is approximately 255,000.

http://www.nbnco.com.au/about-us/weekly-progress-report.html

http://www.nbnco.com.au/content/dam/nbnco/images/nbnco-rollout-metrics-08122013.pdf

The Strategic Review estimates 357,000 brownfields will be passed by June 30 2014.

http://www.nbnco.com.au/about-us/media/news/strategic-review.html

 

[IFocus]

With out getting too political

The return on the Coalition plan is a serious threat long term along with the need for upgrade in the short term.

Having been in the Electrical / Instrument game for 40 years its mind boggling the thought of installing, powering and maintaining 60,000 node cabinets.


The inconvenient truth for the Coalition's NBN

We knew before today that the Coalition's NBN plan would cost much more than claimed, and that the odds were stacked against its easy implementation, writes David Braue.

After six years of attacking Labor's National Broadband Network (NBN) rollout in opposition, the reality check handed to the Coalition about its own alternative policy has substantially rephrased the entire conversation about the future of broadband in Australia.

http://www.abc.net.au/news/2013-12-12/braue-the-inconvenient-truth-for-the-coalition-nbn/5152800

To be fair to Turnbull Abbott instructed him to destroy the NBN remember that (what a disgrace) so Turnbull has actually taken the Coalition form no NBN (carrier pigeon / pony express) to some NBN and dodgy very slow limited NBN.

Remains to be seen how and if he can drag them (Neanderthals / Abbott)to NBN.

 

[drsmith]

With out getting too political

Could you please repeat.

The laughter generated from that line has drowned out most of the rest of what you said.

Remains to be seen how and if he can drag them (Neanderthals / Abbott)to NBN.

On second thought, ..............

 

[overhang]

That scenario though was not Labor's FTTP NBN rollout.

I thought the strategic review was quiet generous to the schedule on Labor's model bearing in mind the delays thus far.

Not sure what you're basing this on considering all the relevant figures as to how FTTP has gone from 44 to 72 billion have been redacted. I would think logically this is actually based on the worst possible scenario that hasn't accounted for the efficiency that is only beginning to be achieved due to the many delays and blowouts, Ziggy also said they have been conservative with figures. You should wonder how the coalition estimate of 94 billion is so far out.

Perhaps the question you should be asking is how review has made no allowance for the use of Telstra's copper or the use of HFC, it seems Turnbull somehow thinks this will be given up for free even though Telstra have been on the record stating that 11 billion would be a good starting point just for the copper.

 

[drsmith]

Not sure what you're basing this on considering all the relevant figures as to how FTTP has gone from 44 to 72 billion have been redacted. I would think logically this is actually based on the worst possible scenario that hasn't accounted for the efficiency that is only beginning to be achieved due to the many delays and blowouts, Ziggy also said they have been conservative with figures. You should wonder how the coalition estimate of 94 billion is so far out.

Perhaps the question you should be asking is how review has made no allowance for the use of Telstra's copper or the use of HFC, it seems Turnbull somehow thinks this will be given up for free even though Telstra have been on the record stating that 11 billion would be a good starting point just for the copper.

Myth's figures are from the cost optimised FTTP plan (scenario 2), not Labor's NBN rollout upon which the 72bn is based.

I haven't as yet reviewed the financials of the HFC component from either a capital or revenue perspective or the broader perspective of the existing overall agreements between Telstra/Optus and NBN Co.

 

[overhang]

Myth's figures are from the cost optimised FTTP plan (scenario 2), not Labor's NBN rollout upon which the 72bn is based.

I haven't as yet reviewed the financials of the HFC component from either a capital or revenue perspective or the broader perspective of the existing overall agreements between Telstra/Optus and NBN Co.

Yes true, my point still stands though that the 72 billion would seem the worst case scenario. Not sure how Turnbull can possibly call this an open review when we cant even see the working out. How is the Coalition can overestimate Labors FTTP by 22 billion but yet underestimate their own by 12 billion?

Given what we know I can't see how the conservative minded can possibly see that the coalition NBN would be the best option on any scale. I respect that many of you would agree it shouldn't be built at all which is fair enough but to actually suggest that their NBN is a more suitable alternative is just illogical.

 

[drsmith]

Yes true, my point still stands though that the 72 billion would seem the worst case scenario. Not sure how Turnbull can possibly call this an open review when we cant even see the working out. How is the Coalition can overestimate Labors FTTP by 22 billion but yet underestimate their own by 12 billion?

Given what we know I can't see how the conservative minded can possibly see that the coalition NBN would be the best option on any scale. I respect that many of you would agree it shouldn't be built at all which is fair enough but to actually suggest that their NBN is a more suitable alternative is just illogical.

That the 72bn is some sort of worst case scenario is an assumption on your part. IIRC, the redacted portion of the SR were requested by NBN Co, not the government. A sceptic might conclude that the government had influence over this aspect of the review and that could be right, but it is still an assumption. We know Labor's went wrong ultimately to the extent that they could only hide it by sitting on 2013 draft corporate plan till after the election.

As for the $94bn cost of Labor's NBN from the Coalition's pre-election costings, it was made clear in those documents that it represented a worst case scenario should all four of the specific elements outlined all go wrong.

I think what's clear from the SR is that the Coalition's NBN structure is still very much a work in progress which in my view is a good thing. I would also suggest your statement that many of us would agree it (an upgraded internet network) shouldn't be built at all is incorrect and hence commentary like that in no way advances the substance of your argument. The Coalition is at least showing flexibility in its technological approach to the fixed line rollout which is something Labor failed to do and part of the reason why the project is in the state it is in.

On an earlier point about the upgrade path to fibre from scenario 6, are you happy that CY30 is a reference to the 2030 calendar year or do you still feel it represents 30 years from some point in the future ?

 

[overhang]

That the 72bn is some sort of worst case scenario is an assumption on your part. IIRC, the redacted portion of the SR were requested by NBN Co, not the government. A sceptic might conclude that the government had influence over this aspect of the review and that could be right, but it is still an assumption. We know Labor's went wrong ultimately to the extent that they could only hide it by sitting on 2013 draft corporate plan till after the election.

As for the $94bn cost of Labor's NBN from the Coalition's pre-election costings, it was made clear in those documents that it represented a worst case scenario should all four of the specific elements outlined all go wrong.

I think what's clear from the SR is that the Coalition's NBN structure is still very much a work in progress which in my view is a good thing. I would also suggest your statement that many of us would agree it (an upgraded internet network) shouldn't be built at all is incorrect and hence commentary like that in no way advances the substance of your argument. The Coalition is at least showing flexibility in its technological approach to the fixed line rollout which is something Labor failed to do and part of the reason why the project is in the state it is in.

On an earlier point about the upgrade path to fibre from scenario 6, are you happy that CY30 is a reference to the 2030 calendar year or do you still feel it represents 30 years from some point in the future ?

Well considering as we've said in the past how Turnbull has stacked the deck with his own mates on the panel then the 72 billion would seem like a worst case scenario and combining that with the fact Ziggy also said they have been conservative with these figures then it would seem 72 billion isn't on the light side.

I can't see how one can possibly support their plan that uses a mixture of technology's and speeds and misses 28% of the country via fibre as the superior plan. Your calendar year 2030 makes sense and I agree with your judgement there but looking at that if we upgrade to FTTP in 2030 then we will have only saved 4 billion dollars over building FTTP now. Considering the fundamental risks and unknowns we have with the state of the copper then that 4 billion is not a good risk to reward investment.

Solike Turnbull you believe that Telstra will give the copper to NBN Co for free as well as allowing them to utilize their HFC network as well as Optus? I don't think Telstra shareholders would be too impressed with that.

Is this a fundamental position you have due to your distaste in the ALP or do you genuinely believe given the amount of unknowns in the Coalition plan and given the insignificant savings building such a network would make that it is the best option? At least with FTTP you know what you're getting, we know the speeds are 1gbps, we know that this will be upgradable without the need to dig anything up in the future, the time and cost are the contentious issue as they are with the FTTN.

 

[drsmith]

Is this a fundamental position you have due to your distaste in the ALP or do you genuinely believe given the amount of unknowns in the Coalition plan and given the insignificant savings building such a network would make that it is the best option? At least with FTTP you know what you're getting, we know the speeds are 1gbps, we know that this will be upgradable without the need to dig anything up in the future, the time and cost are the contentious issue as they are with the FTTN.

The SR doesn't describe the overall financial difference as insignificant but if you wish to discount those parts of the report that are not favourable to your point of view, the conclusion you've reached is not going to be surprising.

I'm not wedded to any specific technological outcome, but what I do know is that with 6-years in office, Labor had its chance and botched it.

The first big test for the coalition as a government will be the practicality (and hence deliverability) of the technological mix outlined the first NBN Co corporate plan under their tenure next year. It's then a question of how well they deliver.

 

[sydboy007]

The SR doesn't describe the overall financial difference as insignificant but if you wish to discount those parts of the report that are not favourable to your point of view, the conclusion you've reached is not going to be surprising.

I'm not wedded to any specific technological outcome, but what I do know is that with 6-years in office, Labor had its chance and botched it.

The first big test for the coalition as a government will be the practicality (and hence deliverability) of the technological mix outlined the first NBN Co corporate plan under their tenure next year. It's then a question of how well they deliver.

Interesting that The Liberals have removed Tony's speech from their NBN policy released in April at the Liberal party web site.

Tony was "very proud" of all the research behind their 80 pages of "policy" and claimed "It is very high quality work indeed. It’s work of a quality to surpass just about anything that an Opposition has previously done." * months later and it turns out they were very wrong.

Yet the LN+P continue to claim they can gain full access to the copper and HFC networks for FREE. They also ignore the issues of copper remediation. Not once have they put a $ figure to how much it will cost to replace bad copper. How can you claim to be able to do a network rollout cheaper by reusing current infrastructure, yet not bother to do even a small audit of the infrastructure to get some real world statistics on how suitable that infrastructure is? It could quite easily lead to a massive costs blowout if the "bagdad" network is as bad as some of the pictures from Telstra line techs make it look like.

Not once has a $ figure been calculated for OPEX of the FTTN and compared to FTTP over a 10 year period - the longer the time frame the worse it looks for FTTN OPEX, especially as further copper remediation is required. No acknowledgment of how difficult it will be to get 60,000+ nodes connected to the electricity network. No acknowledgement of community anger over the placement of the nodes. Just look at people's anger over the HFC cables when they were being rolled out, and I'd say they are less of an eye sore than a node.

The LN+P have done a major policy backflip mainly based on issues that were highlighted to them since their policy launch in April. What's worrying is that they are still to face up to a host of major issues for the FTTN rollout.

As yet no mention of who will pay the billions to upgrade the HFC network to cope with around 3 times the current number of customers. Optus pretty much doesn't sign up new customers, and Telstra seems to refuse new connections in areas suffering from high congestion, of which there's quite a few. Just checkout whirlpool postings about cable internet speeds.

http://www.youtube.com/watch?v=amG62Yar1fI sums up the issues of cable internet in a humorous way. To resolve the current congestion issues, and ensure a reasonable service in the future a lot of new nodes will have to be installed. It nearly feels like the LN+P are hoping people will assume the HFC served areas can get high speed internet for no extra CAPEX.

 

[NBNMyths]

What a difference 3 months makes....

On Sept 6, Tony described their NBN plan costings as "bulletproof"....

http://www.gizmodo.com.au/2013/09/tony-abbott-says-coalition-nbn-plan-is-absolutely-bulletproof/

Now here we are in December before any work has even commenced, and the costs have already blown out by 33% while simultaneously the size of the FTTN network has shrunk by ~30%.


I look forward to all the conservative commenters on this thread denouncing the Coalition's apparent financial incompetence. :

 

[drsmith]

Tony was "very proud" of all the research behind their 80 pages of "policy" and claimed "It is very high quality work indeed. It’s work of a quality to surpass just about anything that an Opposition has previously done." * months later and it turns out they were very wrong.

Yet the LN+P continue to claim they can gain full access to the copper and HFC networks for FREE.

We could go back to what happened to Labor's first policy attempt attempt at this from government. We could then look at their second policy in practice and perhaps give them some credit for trying. It's the current government though that has to clean up this mess.

Under current contracts NBN Co don't gain effective customer access to the copper and HFC networks for free.

http://www.nbnco.com.au/assets/medi...nd-optus-sign-binding-agreement-23-jun-11.pdf

It's within that framework I would suggest that negotiations will take place.

As for information regarding FTTN and HFC costs, it's there from page 85 although some of the actual numbers are redacted.

 

[drsmith]

I look forward to all the conservative commenters on this thread denouncing the Coalition's apparent financial incompetence. :

For your amusement Myths, I'll just say nothing is bullet proof when ultimately confronted with the reality of a Labor disaster.