Coalition's NBN do-over won't be fast or cheap, says Internode's Hackett

Decision may be "entirely at the whim of Telstra," says Internode founder Simon Hackett.

It could take years and extra cash to Telstra for the Coalition to revamp the NBN into a fibre-to-the-node scheme, according to Internode founder Simon Hackett.

Shadow communications minister Malcolm Turnbull and Opposition Leader Tony Abbott yesterday launched the policy, under which most households would have access to connections up to 50Mbps and a minimum speed of 25Mbps, with the revamped network costing $29.5 billion to roll out.

Speaking at the CommsDay conference, Hackett outlined the labyrinth of regulatory work and contract negotiations that would have to be navigated to make any changes.

Hackett, a longtime advocate for Labor’s approach, predicted that by 2016, the Coalition would make an about-face and support sticking with fibre-to-the-premise.

“When you change these policies, it takes a hell of a long time to get these results to start to happen,” Hackett said.

“Three years would be the bottom estimate of what it’s going to take to start deploying fibre-to-the-node.”

In the end, the decision may be “entirely at the whim of Telstra,” because the Coalition would have to renegotiate the contract the big telco signed with Labor, said Hackett.

“Telstra will evaluate changing its existing deal based on whether it makes business sense for shareholders,” he said.

That may be a difficult case to make because shifting to FTTN is likely to cost Telstra more money, Hackett said.

“Telstra’s palm will be necessarily crossed with a lot of silver to make this happen, especially to make it happen in a hurry.”

“I’m not sure that’s a good use of public funds,” he said.

NBN Co has stated it will adapt to the approach of whatever political party wins the September elections.

While the Coalition has pitched its FTTN approach as inexpensive to deploy, Hackett said relying on copper for the last mile creates greater maintenance costs compared to pure fibre.

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The Coalition proposal would require 60,000 cabinets around Australia, he said. That’s “60,000 places where equipment might fail” compared to 121 points of interconnect (POI) on an FTTP network.

Australia’s copper is already in bad shape in many places and could fall apart over the life of the NBN, he added.

In addition, each cabinet for FTTN will require 8 batteries that need to be replaced every three to four years, he said. An FTTN approach would take twice the power as FTTP, he said.

“It’s not fair to say that’s a massive economic shift,” with the additional power requirement representing only about $40 million extra annually, he said.

“But burning $40 million a year worth of power ... in a world where we’re supposed to start caring about those things is also an interesting factor.”

Hackett also questioned the Coalition’s claim that a minimum speed of 25Mbps will be good enough for most Australians.

“The demand for broadband [would have] to magically plateau on a permanent basis at two to three times the current demand we see in the market,” he said.

The FTTN approach also could result in a “digital divide” even within a single community, with different populations getting different speeds on the network, Hackett said.

For example, new greenfield developments will be built with fibre to the premise and so could end up with many times the speed of older neighborhoods, he said.

Follow Adam Bender on Twitter: @WatchAdam

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Tags AustraliaCoalitionfibergovernmentNBNbroadbandfibre-to-the-node (FTTN)politicslabourFibre-to-the-Premise (FTTP)

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