Turnbull: Coalition will honour existing NBN contracts

Last night, Turnbull also confirmed a Coalition government would not build the NBN in areas currently serviced by HFC, which employs a mix of copper and fibre.

Shadow communications minister, Malcolm Turnbull, has confirmed a Coalition government would honour existing contracts for the National Broadband Network (NBN).

However, Turnbull said the Coalition would consider negotiating a round of further contracts to complete the roll out of a national network based on fibre-to-the-node technology, instead of the fibre-to-the-premises model currently being employed for the NBN build.

“You might complete the contacts that you’ve already got for fibre-to-the-premises and then enter into new ones for fibre-to-the-node,” he told Computerworld Australia.

Last night, Turnbull also indicated a Coalition government would not build the NBN in areas currently serviced by HFC in the "near term”, which employs a mix of copper and fibre, covering around 30 per cent of Australia.

"You wouldn't be overbuilding the HFC areas in the near term because they're getting very good service already,” he said on ABC's Lateline program.

Turnbull has previously indicated he would retain the HFC network in order to remove “barriers to competition” with the NBN.

However, retaining the HFC network would require key NBN contacts to be renegotiated, including an $11 billion agreement between Telstra and NBN Co and an $800 million agreement between Optus and NBN Co.

Mark Feetham, partner at law firm K&L Gates, said contract renegotiation might not be a straightforward process.

He said some contracts might need to undergo regulatory approval from the ACCC, a process the current Telstra and Optus agreements with NBN Co had to go through.

“Generally contracts don’t allow one party to dictate a change. However, some government contracts will require the parties to negotiate in good faith,” Feetham said.

“If the parties aren’t able to reach an agreement, then sometimes the clause will go on and say that if the parties aren’t able to agree after a period of time, then one party can terminate the agreement.

“It’s unlikely that the contract’s going to have a unilateral right for the government just to vary the contract.”

In cases where agreements are terminated, Feetham said compensation would need to be paid.

“The leverage that the Coalition government would have would depend on whether the terms of those contracts allowed for a reshaping or a re-scoping or a possible right to terminate the contract in the event of regulatory change,” Feetham said.

Although the Coalition has repeatedly stated it would mainly use a fibre-to-the-node network for the NBN in brownfield premises, with fibre-to-the-premises in greenfield developments, Turnbull said he is not completely against FTTH as a technology.

“What you have to do is balance a bunch of different things,” Turnbull told Computerworld Australia.

“You’ve got to balance the service [and make sure] the infrastructure you’re proposing to build can deliver both … capability and in terms of what customers actually need or will pay for.

“Then you’ve got to think about how much it is going to cost, because that’s going to impact on how much you’re going to have to charge for it – the more it costs, the more you’re going to have to charge.

“If money was no object and you didn’t care how much money you spent and you didn’t care how long it took, yes you would do fibre into every house – without a doubt.”

However, Turnbull conceded that the “claimed” benefit of FTTH is that it can deliver much higher speeds – up to 1Gbps, in the future.

“That is not feasible under fibre-to-the-node – at least in the present time,” Turnbull said.

“Although it’s worth noting that the NBN is advertising 100Mbps as their top speed product and of course 100Mbps is way more than most people either need or let alone will pay for, as indeed the carriers have found out already because … Telstra’s offering a 100Mbps product on HFC and hasn’t had much success in selling it.”

Telstra's HFC network passes 2.8 million premises.

Further NBN delays a “debacle”

On Wednesday, NBN Co said contractor Syntheo was responsible for NBN Co downgrading its premises passed target for June 2013.

Addressing a Senate Estimates hearing, NBN Co didn't reveal the specific problem that led to the change in targets.

“This performance in WA, SA and the NT does not fill you with any confidence … We are constantly getting anecdotal reports of the rollout not being effective and not meeting targets, even the reduced targets that they set in August last year,” Turnbull said.

The NBN has suffered previous delays stretching back to March 2011, when NBN Co blamed protracted negotiations with Telstra for delays to the launch of second release sites for the network.

In August last year NBN Co blamed the ACCC for contributing to a nine-month delay due to the approval process required by the watchdog for the $11 billion definitive agreements between Telstra and NBN Co.

Turnbull described the latest rollout delay as a “debacle” and took a swipe at what he said was NBN Co’s lack of transparency, which he has said has hindered the Coalition in costing its version of the NBN.

“NBN management, as you know, are hardly forthcoming,” Turnbull said.

“For a company whose main product is glass fibre, they’re not very transparent.”

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17 Comments

Ben Dover

1

Does this mean if you are on the 3 year roadmap you will get FTTH? How soon prior to construction in an area do the contracts get signed?

Eileen Dover

2

As I understand it, when an area is marked as "under construction" is when the contract is signed

gnome

3

The HFC does not cover 'around 30 per cent of Australia.'

It covers a very small part of the continent where it was rolled out in some areas of Brisbane, Sydney and Melbourne, and even if we use the misleading figure of connected services, the figure is nothing like 30 per cent of the total.

It might be useful to check figures like this that seem to have a purely political origin...

Abel Adamski

4

It covers 28% of premises in the footprint, but can only service less than 25% of them with a contention prone service and is not business capable nor is it capable of being wholesaled, so remains a monopoly
Built in high value areas, guess those Liberal Voters will be impressed when the fibres are pulled through those areas to service the adjacent lower value areas, especially the businesses

Abel Adamski

5

Telstra has issues flogging their 100Mb HFC because HFC has crap contention and upload and they charge a packet

Abel Adamski

6

Remember HFC in Aust was NOT designed for Broadband, but for Multicast Pay TV and Telephony.
It is the cheap delivery service for Murdoch and Telstras Media Monopoly. Expensive to upgrade

http://delimiter.com.au/2013/02/14/coalition-fttn-would-ignore-hfc-areas-conroy/
http://delimiter.com.au/2013/02/15/turnbull-confirms-hfc-areas-last-to-get-fttn-if-at-all/

Welcome to the circus, the puppets dance to the tune of the puppet master as the band plays on

http://www.guardian.co.uk/commentisfree/2012/dec/20/bernstein-murdoch-ailes-petreaus-presidency

At least Australia was cheap and easy and to be delivered soon

Google "The Lie Factory"

Come in suckers

Poor Fella Australia

http://www.abc.net.au/technology/articles/2013/02/13/3689280.htm
http://www.abc.net.au/technology/articles/2013/02/15/3691240.htm
http://www.afr.com/p/technology/coalition_broadband_plan_doomed_y82LOVLL6tXZv4peNCKBHN

Mike Hunt

7

@Abel Adamski

Do you feel compelled to post your nonsense on every web site that has some mention of the NBN?

Abel Adamski

8

@ Mike Hunt
I guve a damn about Australia and it's future.
I see a ubiquitous scaleable national communications iinfrastructure as an essential foundation for our future
I also see misinformation, fud and straight out lies and deception .
I also believe in Democracy the core principle of which is an INFORMED Vote.
At this time in Australia that is becoming impossible for those that trust the media. thus any resultant goverment by definition is illegitimate
I stand for what I believe in and try to fight the FUD.

What is your position?

Diachronic

9

As I understand it, I would not trust one word of the LNP with regards to the NBN......their position on the NBN has been (and still is) completely fluid, they cannot be tied down to a clear & costed plan (the media still remains unwilling to call them to account for detail) and you can bet that the end result will not favour the average punter. Real retail competition (ie. lower prices & far superior services) will be lost if the LNP get their hands on the NBN. Australia will shoot itself in the foot.....again. Telstra & Foxtel (& Uncle Rupert) will be some of the lucky few to benefit most from Turnbull's hybrid fraudband network.

Roll on NBN!

Pedro

10

Any sensible government would consider and use all available technologies. After all, everyone would like faster broadband but at the rate the NBN is progressing it could be 20+ years to complete. Who wants to wait that long?

Kevin Cobley

11

Why is the LNP proposing a two tier discriminatory system Where some will have NBN Fibre broadband, others will have the near useless HFC (which Turnbull is attempting to tell the average punter is somehow equivalent to NBN when it's not) and others still are just going to get what others have got ADSL2+ and the bush and regional Australians are going to be left with low latency Wireless and Satellite thereby hanging in the breeze.
U gotta be kidding Turnbull this ain't policy, it's some Australians are more equal than others. At least my local LNP member Louise Marcus is doing her best to ensure that residents of the Blue Mountains receive NBN Fibre ASAP perhaps she should replace Turnbull she's got a much better Idea of what Australians want!

Abel Adamski

12

Pedro
The NATIONAL BROADBAND NETWORK is just that, wholesale, open access, scaleable, easily and economically upgradeable and built to serve all sectors of the economy for many decades to come and will pay for itself and deliver a dividend to the taxpayer and it is actually progressing well as a 10 year project. Yes it delivers faster broadband to everyone, but that is only a small part of what it is about.
The Coalition is NOT proposing a NBN even if they use the term, just a short term bandaid still depending on ageing expensive to maintain copper that is OWNED by Telstra
Their proposal is best called the "Superfast Broadband" (Whatever that Lotto means) Initiative and does not tick the boxes.
Once Billions are spent to upgrade and extend Murdoch/Telstra's Pay TV network (HFC) they cannot ever afford to overbuild that., That is why Telstra is doing those Deep Packet Inspections , to try to reduce the load on their HFC. So if HFC in your area that is all you will ever get.
As Essential to the Nation as Communications is to the economy especially in the Future, the Coalition Policies will have created the national communications platform we will have to live with. Labor will NEVER attend to shortcomings and failures of that in the Future . Murdoch and The Libs now own that , it is their baby and now and for ever they wear the responsibilty

Gray

13

I disagree with Labour's policies in most areas yet will sadly have to vote for them based on NBN alone. For once Labour is actually doing something right using tax payer dollars to fund a significant infrastructure project for future generations that private enterprise will never fund. The Coalition wants to undo the hard work. Stupid stuff Tony. You just lost a vote. Bring on fibre to the home for Australia!

Mojo

14

“... 100Mbps is way more than most people either need or let alone will pay for...”

- Such short sighted dribble is embarrassing. How can Turnbull so blindly ignore data trends and even consider such an ill conceived statement. Remember when people thought 56k was the fastest speed we would ever need.

I have been sitting on the fence but this has well and truly tipped me in favor of Labor.

gnome

15

Or remember when 28.8k was considered pretty hot stuff, until 56k became the aspirational target. How quickly things move - and how quickly we forget!

And some aspiring politicians want to keep it that way with their silver tongued oratory.

Pat

16

My questions to Mr Turnbull would be as follows:
1) If I'm on the 3 year roll-out plan (green area - Fibre, on the NBN site) do I get FTTP under a Coalition NBN? (or at what point in the plan don't I get FTTP?)
I want a straight answer and so will 1 Million+ homes in green.

2) If I don't have 'usable' copper, will I get FTTP?
(i.e. will you install new copper where none is working?)

3) Given the previous Telstra deal took x months/years, will the NBN roll-out be put on hold while you negotiate how many more $Billions to pay for the copper, and if so, how is this Coalition roll-out going to be faster?

4) Given that FTTN has a much more limited lifespan (some would say an upgrade in 20 years) than FTTP, Is the cost benefit analysis you are demanding going to have terms of reference of 30+ years, or better yet include the price of that future upgrade?

5) For the $5 Billion saved (source by Independent MP), what is the lower asset value of the outcome? (Say Labor Gov invests $30Bil and get $45-70 Billion asset after 20 years, yet Coalition invests $25 Billion (inc $10 Billion to Telstra for the copper) and get a $15-20 Billion dollar asset after 20 years? Will this analysis be in the Cost Benefit Analysis)

6) If HFC areas are excluded, and slower service will be worth less, will the government forgo NBN annual returns or provide ongoing subsidies for rural services? (Otherwise can you provide the % increase in cost for ALL rural services?)

Steve

17

Dident NBN Co release documents showing that their best selling poduct was 100mbps?
That invalidates alot of Turnbulls arguement there.
FTTN able to do Gb? There is not even speculation that it can, let alone any development towards it.
FTTN for brownfields? I live in an acreage estate. Each FTTN node would service about 80 houses maximum (45m frontages, 800m from node max). The standard Alcatel node is designed to service 500. There goes the efficency and cost savings.

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