Coronavirus: NBN’s $4.5bn ultra-fast upgrade

Eight million Australian households will be granted access to ultra-fast internet speeds under a $4.5bn National Broadband Network upgrade.

Communications Minister Paul Fletcher. Picture: Getty Images

Eight million Australian households will be granted access to ultra-fast internet speeds under a $4.5bn National Broadband Network upgrade, creating 25,000 new jobs within two years and boosting economic activity beyond the COVID-19 pandemic.

The Communications Minister, Paul Fletcher, on Wednesday will announce the biggest shake-up of the NBN since 2013, launching an on-demand scheme using fibre to connect households and deliver broadband speeds of up to 1 gigabit a second.

The stimulus package, fin­anced by the NBN Co through borrowings from private debt markets, will set up a political clash with Labor over previous decisions by Coalition governments to use copper networks and hybrid connections to households instead of fibre.

In a major pre-budget speech, Mr Fletcher will endorse a $3.5bn expansion of the NBN’s residential network aimed at increasing internet speeds for up to 75 per cent of fixed-lined premises in Australia by 2023.

“This is a very big new infrastructure project — with new fibre to be built passing around two million premises over the next three years,” he will say.

“This plan is possible because NBN Co has now proved its business model and is generating substantial and growing cashflows — in turn allowing it to borrow in the private debt markets.”

Almost 12 million Australian households and businesses can access the NBN, with 7.5 million currently connected and 30,000 new premises joining each week.

Finance Minister Mathias Cormann said the NBN revamp would increase national GDP by $6.4bn each year by 2024, including a $1.5bn economic growth boost across regional Australia.

Senator Cormann said the NBN Co would continue re­financing its $19.5bn commonwealth loan by mid-2024 and bring forward $4.5bn to fund the broadband upgrade through private debt.

Pre-empting Labor attacks over the government’s shift to household fibre connections, Mr Fletcher will tell the National Press Club the government was committing to more fibre “when it makes economic sense to do so”.

“Labor’s plan by contrast was to build fibre everywhere, well before people actually needed it or were willing to pay for it,” he will say. “The (Coalition’s 2013) strategic review recommended a different approach: start with fibre to the node and upgrade over time once demand began to build for the very highest speed services.

“This is exactly what we are doing. In the rollout since 2013, we have been much more prudent with capital than Labor.

“In this next phase, we will again be prudent.”

Mr Fletcher will say the government had always intended to upgrade the NBN “when there was demand”, noting the spike in broadband demand growth during the COVID-19 pandemic.

“The upgrade will re-use the new fibre built as part of the fibre-to-the-node rollout, and extend it further into the suburbs.

“NBN will only build the expensive fibre lead-in if and when a customer ­orders a higher speed plan.”

“This on-demand model is used with great success by Chorus in New Zealand and Openreach in the UK, and we’re very happy to copy it.

“By contrast, under Labor’s wildly profligate approach, expensive fibre lead-ins were built to every home — whether or not the customer actually wanted broadband at any speed, let alone ultra-fast speeds.”

After winning the 2013 election, the Abbott government backed a multi-technology mix for the NBN rollout designed to boost internet speeds at a “reasonable cost” through a fibre-to-the-node strategy.

Responding to the government’s $700m Business Fibre Initiative announcement on Tuesday, Anthony Albanese said the Coalition should have used fibre connections from the start.

“The government’s been exposed again by the fact they have said they now have a plan for businesses to replace the copper wire NBN … with fibre. I mean, who knew that fibre was the best technology? Answer? Everyone. Absolutely everyone,” the Opposition Leader said.

“And we said at the beginning of this process: do it right, do it once, do it with fibre.

“What this government is doing is; do it once, then do it again with fibre — at a great cost to the taxpayers.”