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$91,196 to connect NBN to one house

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Source: https://www.theaustralian.com.au/national-affairs/91196-to-connect-nbn-to-one-house-pays-for-itself-after-146-years/news-story/11316f02bc791a5b0db599d8abe735cc

The massive costs of Labor’s “gold-plated” National Broadband Network are now being realised, with a single internet connection to a Tasmanian house costing the taxpayer $91,196 — an outlay that would take 146 years to recoup through user fees.

The Australian has obtained data for the most expensive connections delivered in each state under Labor’s all-fibre NBN policy, and they include $40,063 for a house in Mount Cotton, southeast of Brisbane, $86,533 for a Launceston bowling club and $41,304 for a business in Strathfield, in Sydney’s inner west.

The federal government has seized on the data as evidence the costs of the $49 billion NBN would have blown out by tens of billions of dollars and taken many more years to complete, had it not changed tack to the much cheaper — but marginally slower — fibre to the “node” model.

Locations of the most expensive connections.
Locations of the most expensive connections.

The NBN rollout began in regional areas and the historic Victorian town of Ballarat is over-represented on the list of priciest internet connections. The Ballarat Mining ­Exchange building — now a gold shop — cost $30,573 to connect to the NBN while connecting the nearby Ballarat Central Church of Christ cost taxpayers $19,858.

 

Adding further insult, the town claims several thousand homes and businesses were damaged during the rollout of fibre-to-the-premises connections, and it has sued NBN Co for $13 million.

“Ballarat was obviously one of the very first communities to have the benefit of the NBN rollout and the vast majority was serviced via a fibre-to-the-premises model,” Ballarat Mayor Samantha McIntosh said yesterday.

“To see them chop into things left, right and centre was very disappointing.

“At this point (we have) some 1700 outstanding installation issues with the NBN network.

The problems faced by Ballarat were exacerbated by its high proportion of heritage properties but critics of Labor’s fibre rollout — which is more intrusive than the Coalition’s approach, which relies on existing copper wires — point to the legal action taken by the town as an example of potentially vast extra costs and headwinds of the ALP model.

“These costs prove that spending on the NBN would have got out of control under Labor and driven up home internet bills for all Australians,” Communications Minister Mitch Fifield said yesterday. But opposition communications spokeswoman Michelle Rowland said the cost of fibre deployment had “come down worldwide by 40 to 50 per cent” and the government had delivered a “second-rate dud”.

The ALP has criticised the FTTN model, saying those connections are slower and copper wires will need to be replaced at some stage in the future.

Those speed arguments have been somewhat negated, however, because more than 80 per cent of users are opting to buy the two slowest NBN speed packages of up to 25Mbps — a fraction of the average 60Mbps-plus delivered by FTTN connections.

The average cost of a fibre-to-the-premises connection was $4403 while the average cost under the government’s fibre-to-the-node rollout is less than half that at $2174.

The ALP, which launched the NBN in 2009, had planned to ­deliver fibre to 93 per cent of the nation’s premises, with the ­remaining properties to be serviced by satellites and transmission towers.

However, that FTTP rollout was very slow, with just 51,000 premises connected by the time the Coalition won power in 2013.

Under the Coalition’s predominantly FTTN approach, which runs fibre to neighbourhood “nodes” and uses existing copper wires to connect to individual homes, more than three million premises have been connected to the NBN.

Under the FTTN model, a cabinet is configured to serve either 48 or 384 premises and so a direct comparison with FTTP connections was not possible, however even in the most expensive rural areas, FTTN connection costs went up to only about $5000.

According to NBN Co documents, the Tasmanian home most expensive to connect was located in Ravenswood in eastern Launceston, and the job required “remediation work” and “substantial civil work and multiple visits by the technicians”.

NBN Co is earning revenue of $43 per month for each NBN connection, a figure it hopes to grow to $52 a month by 2020.

Even using that $52 a month figure — or $624 a year — it would take NBN Co 146 years to recover the $91,196 it spent connecting the property.

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