Victorian government backs slower NBN

State government endorses mixed technology model

The Victorian government has indicated it supports its federal Coalition counterparts' changes to the rollout of the National Broadband Network, including NBN Co adopting a multi-technology mix that will make significant use of fibre-to-the-node and HFC.

In a submission to the panel conducting a cost-benefit analysis of the NBN and an assessment of the regulatory environment of the rollout — known as the Vertigan panel after chair Michael Vertigan — the Victorian government has backed target speeds for the majority of connections of 25 megabits per second by 2016 and 50Mbps by 2019.

NBN fibre-to-the-premises connections can offer download speeds of 100Mbps, and FTTP can potentially deliver gigabit speeds to households and businesses in the future.

"[A]dhering to the original NBN plan of providing households with very high speed broadband, well in excess of the foreseeable needs of most users, is likely to be very costly, unnecessary, and hence uneconomic," the Victorian government argues in a late submission responding to a regulatory framing paper produced by the panel.

The government supports "strategic approach to NBN design and deployment" based on the target 25Mbps and 50Mbps speeds previously advocated by the Coalition.

"The opportunity cost of foregoing FTTP speeds and opting instead for fibre-to-the-node (FTTN) speeds as the base level of performance is likely to be low," the submission states. "Where more significant speeds are necessary, the strategic deployment of higher speed solutions where there is demand can be pursued."

The benefits of "very high speed broadband" to all residential users "have been over-stated, and are unlikely to stand up to cost-benefit analysis". "In reality, most residential consumers will not benefit from having fibre to the premise at this point in time, although they may require it longer term," it states.

The submission backs the idea of competing infrastructure providers potentially paying a levy to subsidise the roll out of the NBN in regional areas.

The panel should give priority "to identifying industry structures and policies that foster both retail and network infrastructure competition while minimising network duplication costs and NBN Co’s regional cross-subsidy funding needs — with any policies selected still effective if NBN Co is privatised and no longer subject to direct Commonwealth control".

Read more: State government backs Startup Victoria with $100k

Options to increase retail pricing could include ditching NBN Co's much-loathed CVC pricing and reducing the number of regional Points of Interconnect to make it easier for smaller ISPs to offer NBN services.

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