NBN’s eye-watering costs exposed

ONE-in-four Australians are unhappy with the speed of their fast broadband connection, with our obsession with Netflix being blamed.

ONE-in-four Australians are unhappy with the speed of their fast broadband connection, with our obsession with Netflix being blamed.

NBN complaints are rising at a faster rate than the number of users.

The proportion of national broadband network customers complaining about faults to the Telecommunications Industry Ombudsman rose to 0.66 per cent in the 12 months to June 30, from 0.50 per cent a year earlier.

Ombudsman Judi Jones said that, while a higher number of complaints was expected due to a big rise in users, the size of the increase is a cause for concern.

“Consumers and small businesses are increasingly reliant on the internet and their mobile phones for their daily lives, so we expect that connectivity to be there instantly and of high quality,” Ms Jones told AAP.

“We all want to stream Netflix and not to have to see that spinning dial.”

NBN Co chief executive Bill Morrow says because retailers are aggressively competing for market share, they’re unable to charge consumers what he believes they should to pay to provide increased bandwidth.

As a result, some households and businesses are unable to access the high speeds they expect or led to believe to expect by retailers.

The number one NBN consumer issue with was broadband speeds between 7pm and 11pm — which Mr Morrow dubs the “Netflix hours”.

Consumers were led to believe they could access broadband speeds of between 12-25 megabits a second for the same price they were paying for a pre-NBN service (5 megabits a second).

$91,000 TO INSTALL NBN AT ONE HOME

Figures released today show the most expensive broadband connection in Australia cost the National Broadband Network $91,196 for a single home.

That was the cost of the fibre-to-the-premises (FTTP) link for one residence in Ravenswood, Tasmania.

Tasmania had the second most expensive FTTP connection and the highest cost commercial link — $86,533 for a bowling club at Invermay.

The eye-watering costs of single NBN connections have been revealed.

Because the club was in a remote area, “the fix required the substantial civil work including installation of new conduit and multiple revisits by the technician”, according to NBN.

The extraordinary bills for the FTTP were released by NBN Co, the national broadband provider, as it announced a shift fibre-to-the-curb (FTTC) in the first half of 2018. This would be cheaper than upgrading the system to fibre-to-the-node (FTTN).

And the switch will be part of its defence against a brutal assessment of NBN’s performance on the ABC-TV’s Four Corners tonight.

The NBN Co construction team rollout fibre in Penrith, in Sydney’s west.

The program says it will review the $49 billion NBN project as it passes the halfway mark of the broadband rollout, and promises the report “investigates the problems fuelling this dissatisfaction”.

NBN today revealed it had started its first FTTC in Coburg, Melbourne.

“In connecting a trial premises to FTTC the company has achieved speeds of 109Mbps [megabits per second] downstream and 44Mbps upstream using VDSL [very-high-bit-rate digital subscriber line] technology over a 70 metre copper line that serves the premises,” NBN said in a statement.

“FTTC works by delivering new fibre all the way to the property boundary where it connects to a Distribution Point Unit in a telecom pit that then connects to the existing copper lines serving the premises.”

An NBN contractor installs a fibre-to-the-node box in Newcastle, NSW.

The hoped-for switch from FTTP to FTTC adds flexibility to NBN’s options.

But the big attraction is the lower cost — about $1500 lower, the company says. And there is less disruption without the need to dig up driveways, which can come with FTTP.

NBN chief executive Bill Morrow has no doubt: “This network is not being delivered as a free gift.

“The government wants taxpayers to get their $49 billion back and expect a small return as well.

“That means that the people who will ultimately pay for the NBN network are the Australians who buy services delivered over the network.

“So, to be quite blunt about it, the more money that NBN spends on building the network then the more expensive the services will be for Australians — it really is that simple.

“If we decided tomorrow to upgrade the entire FTTN footprint to FTTP — upgrading nearly five million premises at a cost of $2000 each — then that’s another $10 billion we would have to recoup for taxpayers.

“To put that number into perspective, BT in the UK have spent less than $6 billion on upgrading nearly the whole of the UK — with a population three times that of Australia’s — to FTTN.”

NBN Co expects to serve an initial one million premises with FTTC and estimates the technology will cost about $2900 per premises to deliver compared to $4400 for FTTP.

The most expensive FTTP connection in Victoria was $51,464 to a business in Ballarat Central. The NSW highest was $41,714 for a residence in Carwoola.

In South Australia, the most expensive hook-up was $22,049 for an industrial site at Maslin Beach. And in Western Australia it as $19,919 for a sports facility at Utakarra.

Mr Morrow said the company was working to make services affordable to end-users, through retailers.

“That’s why we have reduced the cost of bandwidth for our retailers from $20/1Mbps to now as low as $8/1Mbps provided they buy enough bandwidth,” he said.

“But we have only been able to do that by substantially bringing down the cost of the build.

“Again the plain reality is that we can’t reduce the cost of our services — as retailers want us to — and at the same time spend billions of additional dollars on the network as some so-called industry experts are demanding — because it’s ordinary Australians that will end up paying the price for that.”