Labor disregarded history as it developed its satellite policy for the National Broadband Network, Parliamentary Secretary for Communications, Paul Fletcher, claimed today.
Speaking at the CommsDay Australasia Satellite Forum on Tuesday, Fletcher said that Labor overlooked lessons about the high cost and operational difficulty of maintaining satellites that should have been learned from the government’s AUSSAT satellite in the '90s.
In addition, Fletcher said that Labor overestimated satellite’s ability to serve fast connections to people in remote areas of Australia.
“The lessons of the AUSSAT debacle were very clear but Labor wilfully ignored those lessons” when it decided to build and operate its own satellite for the NBN, Fletcher said.
“Some of Labor’s mistakes, such as the hopelessly incompetent approach to allocating a finite capacity on the satellite can be corrected. Others we are stuck with.”
The Coalition agrees that satellites are a “sensible” way to reach remote areas, said Fletcher. However, he said former communications minister Stephen Conroy created great financial risk when he decided that NBN Co should own and operate its own satellites.
The government lost large amounts of money the last time it tried that with AUSSAT, Fletcher said.
“AUSSAT faced technical and financial difficulties from the outset. Between 1981 and 1991 there was only one year in which it managed to make a profit. By the early ‘90s it had debts of $800 million – it was clearly unsustainable.”
In addition, Fletcher claimed that NBN Co under Labor bungled the Interim Satellite Service (ISS) by not understanding satellite capacity limits.
The service promised 6Mbps download speeds for 250,000 households. However, NBN Co only bought enough capacity for 48,000 users, Fletcher said.
As a result, many users on the ISS have reported speeds as slow as dial-up, he said. “Indeed there are customers who report they cannot even send an email.”
“This is a terrible end user experience and it is a terrible public policy outcome when the Commonwealth and ultimately taxpayers are paying a very large subsidy of $7300 per service.”
Making matters worse, said Fletcher, the retail service providers are selling bundles of data to consumers that are larger than what users can physically consume with the 30kbps capacity per user guaranteed by the service.
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Fletcher praised NBN Co’s recent review of satellite and fixed wireless, saying its proposal to increase the number of NBN fixed wireless users and reduce the number on satellite would help address the capacity issues.
Under the new plan, the percentage of users on fixed wireless will increase to 57 per cent from 39 per cent under the previous proposal, while the number of satellite users will drop to 40 per cent from 57 per cent, he said.
The change will require an extra 1300 fixed wireless base stations, bringing the total number to around 2700. However, it will also mean the government can avoid paying $6 million for a third satellite, Fletcher said.
“This approach will mean the scarce capacity on the satellite will be reserved for the users who really need it and who cannot practically be served by other technologies, and in turn ensure that there is sufficient capacity so they receive a good quality user experience.”