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NBN Connection Takeup And The ‘Real Solutions’ Broadband Statement

Here’s an article by Angus Kidman about the takeup of the National Broadband Network; how many connections have been made to the NBN versus how many are available, and it includes reporting on the Opposition’s new policy titled Real Solutions with reference to the NBN.

NBN Co has updated its internet connection figures for the National Broadband Network (NBN), revealing that as of December 2012 34,500 premises had been connected to actual NBN services. In the same week, the Federal Opposition has released its ‘Real Solutions’ policy document, which contains some details of its own plans for the future of broadband — a future where the NBN’s role is somewhat uncertain. Let’s try and make sense of the NBN data and the new Coalition claims.

The numbers are bound to trigger predictable rhetoric from NBN opponents along the lines of “we’ve wasted all this money and no-one wants it”, while making broadband enthusiasts who aren’t connected yet wonder what’s holding back all those people who could be on the network but aren’t. That’s the nature of NBN discussion. But what have we learned this week?

At the end of December 2012, 34,500 people had connected to the NBN. That number is up considerably from June 2012, when the figure was 13,600. The vast majority of those users to date (23,100) are on satellite, which has the advantage of being instantly available to qualified users if they install suitable receivers. By June 2013, NBN Co is predicting those scales will have tipped, with 54,000 fibre connections against 47,700 satellite and wireless broadband connections. But that’s a prediction, not a current number.

Actual adoption is very different again from potential access. Earlier this month, NBN Co said that it had begun construction in areas with a potential reach of 784,592 premises. By June this year, it is due to have actually passed 286,000 premises — just under 10 times the number of active internet connections right now. The takeup total will presumably be higher at that point, but it will be a long time before it even approaches 50 per cent at this rate.

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Broadband on way

Work is well under way to bring the National Broadband Network to Corrimal, Dapto and central Wollongong, including Coniston, Mount St Thomas and Mangerton.

NBN Co, which is delivering high-speed broadband throughout Australia either by fibre optic cables, fixed wireless or satellite services, has started construction in Corrimal, Dapto and central Wollongong.

This means NBN contractors are doing detailed design and survey work in those areas for the installation of the fibre optic cables. On average it takes between 12 and 14 months from the start of construction to when residents and businesses can order NBN retail services from an internet service provider.

In the Wollongong council area, the NBN will be provided through fibre optic cables. Rollout maps for Corrimal, Dapto and Wollongong have been released and it was likely residents in those areas would be able to order an NBN service from the end of 2013 or early 2014.

‘‘For any information on where we are with the rollout in the Illawarra, if people go to it will give them an indication of where we are constructing at the moment,’’ NBN Co external relations manager Trent Williams said.

‘‘If their area isn’t indicated yet, it means they’re not in our current three-year plan. It doesn’t mean they’re not getting fibre optic cable necessarily.’’

Mr Williams said the NBN had been completed in Kiama and Minnamurra and 45per cent had taken up the service– one of the best rates in Australia.

‘‘So far Wollongong has been very, very positive about the NBN. It really gives that area access to internet speeds and reliability you typically only got in Sydney recently. It’s breaking down the tyranny of distance.’’

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Property buyers now look for high-speed broadband access

BUYERS of homes in new developments are getting a head start on other Sydney residents with access to the national broadband network.

People living in the apartment block Divercity in inner-city Waterloo are already enjoying the benefits of high-speed national broadband network internet access, which residents say is cheaper than their previous plans.

An NBN spokesman, Jonathon Grahame, said that most of the 153 residents who have already moved into the Becton project have signed up for the highest possible 100Mbps plans, while residents in existing homes in neighbouring streets are more than a year away from getting access to the service.

As NBN’s fibre-optic cable will replace the existing copper network, it made no sense to install copper in new estates.

Mr Grahame said the demand from developers for ”fibre” in new developments was very strong. Nationally, the company has 2497 signed applications to deliver the service to 116,308 premises. And the NBN has already rolled out past 22,000 lots in new developments countrywide.

When Andrew Brown, 26, discovered a cupboard full of wires and equipment while he was inspecting an apartment in Divercity, he knew he’d found his new home. ”I already liked the apartment so when I found it was connected to the NBN it was, ‘OK, cool. Let’s go with this’.”

For Mr Brown, a self-employed graphics and web designer who works from home, internet speed is more a necessity than a luxury. ”We get about five times the speed we were getting at our old apartment at Elizabeth Bay,” Mr Brown said.

It is also cheaper than using the traditional copper internet lines. ”It was about $80 a month in Elizabeth Bay but here we’re paying about $60 [a month].”

Far from being the costly extravagance critics have suggested, NBN promoters say that if Australia follows an emerging US trend home buyers will soon make high-speed broadband access as one of the prime factors when they are choosing where to live.

The aim is to have the NBN go past 286,000 homes by June, with access possible at every Australian home by 2021.

The federal opposition says progress has been slow, with only 30,000 Australians signed up at this point. But Mr Grahame says there’s strong demand.

The NBN is already available in 314 new apartment or housing estates around the country, with 86 of those in NSW.

Apart from Divercity at Waterloo, buyers in some projects at Rhodes, the Southern Highlands, Kellyville, Baulkham Hills, Oran Park and Harrington Grove and further afield in Bathurst, Dubbo and Orange are already benefiting.

”The developer provides us with a pit and pipe network encircling the estate then the builder connects all the equipment in the home,” Mr Grahame said. Residents can then request connection from their retail service provider over the phone.

At Waterloo, Mr Brown, who lives with his partner, Andy, 24, is suddenly very popular.

”Friends are coming over to our home and having a go of our new toy. It’s making them consider moving from the eastern suburbs to Waterloo,” he said.

For those who are not in a new apartment block or housing estate, the wait will be longer. To date, homes are connected in Armidale, Kiama Downs and Minnamurra.

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National Broadband Network to help elderly stay in own homes, project boss says

THE National Broadband Network will help older people stay in their own homes longer and their aged care will cost a fraction of what they would pay for a nursing home, the man in charge of building the project says.

NBN boss Mike Quigley also says households will receive better and faster broadband for what they already pay.

Mr Quigley hit back at critics who had derided the NBN’s slow roll-out, saying the decade-long project was like “pushing the pig through the python” but it would hit big milestones in the next 12 months.

Mr Quigley said some of the biggest benefits of the NBN’s high-speed broadband to homes would be in health and aged care. Patients will be able to see doctors on TV screens and have simple tests and consultations via computer.

He said a US study found home health monitoring cost $1600 a year, compared with $13,121 for a visiting nurse or $77,745 for a nursing home.

An Australian pilot scheme by aged care provider Feros Care found the daily cost of using broadband was $3.46-$7.14, compared with $967 for an acute hospital bed.

“Most old people don’t want to leave their homes,” Mr Quigley said. “This could let them stay for a fraction of the cost of a day in hospital.”

The NBN has about 30,000 active customers. Mr Quigley said the aim was to have the network available to 286,000 homes by June.

“I want the public to know it’s now real,” he said. “All of the design work and the architecture work that’s taken years, and the regulatory work and structural separation – all of that’s now been done.”

Mr Quigley said Australia would depend on the NBN with growing demand for video services requiring fast broadband. He predicted governments would use the network to deliver services such as social security, education and health.

He rejected claims of cost blow-outs, saying deals with providers meant more upfront costs but would save money over the life of the project.

Mr Quigley denied the company was wasting taxpayers’ money, following criticism it was spending too much on staff and taxis.

“In a start-up, that normally happens,” he said.

He said no NBN staff flew domestic business class, and trains and taxis were used over limousines.

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OPINION: National Broadband Network rollout proving to be a costly failure

IN April 2009, the Rudd-Gillard government announced its plans to build the National Broadband Network.

The fibre-optic network is supposed to pass 12.2 million premises around Australia by 2021.

More than three years later, as at June 30, 2012, it had passed just 38,914 – less than one third of 1 per cent towards the finish line.

Yet NBN Co’s corporate plan, issued in December 2010, promised to pass 317,000 premises by June 30, 2012. Another comparison: in 1994, Telstra announced it would build a national hybrid fibre coax network. By June 1997, three years on, the network passed 2.1 million homes.

NBN is doing equally badly on the number of services being delivered. There were 3867 fibre services in operation as at June 30, 2012; the corporate plan promised 137,000.

More recent disclosures at estimates hearings in October show little improvement. One component of the fibre rollout, brownfields, had risen from 29,000 in June to 32,295 and fibre services in operation were at 6400.

Broadband Minister Stephen Conroy and NBN Co have tried every trick in the book to disguise the poor performance. They abandoned the original corporate plan and issued a new one in August this year. The goal of 317,000 premises passed by June this year was changed to 39,000.

The goals for later years also dropped sharply. Originally the network was to pass 1.27 million premises by June 30 next year; that has fallen to 341,000.

Next, they made comparisons as difficult as possible. The original corporate plan gave target numbers for five different categories of premises: three types of fibre, wireless and satellite. The new plan, and the 2011-12 annual report released recently, now gives numbers for two types of fibre and a merged number for wireless and satellite.

Third, they tried to shift attention away from hard numbers by introducing a new statistic: premises where there is construction commenced or completed. NBN Co’s March 2012 media release promised that by 2015 “construction of the fibre optic component of the network will be under way or completed in areas containing 3.5 million premises”.

This statistic – which is not used by private sector telecommunications companies such as Telstra and Optus – is meaningless. They count a home as having construction commenced from the moment a contract instruction is issued to the contractor.

But several further steps are required, including the Telstra commencement notice and the final contract instruction. On average, it will be 12 months before the work is completed. A fourth trick is to quote total subscriber numbers across fibre, wireless and satellite.

At the October estimates hearing, NBN Co said it had 24,000 customers. But of these, 17,000 were on satellite – and more than half of them were customers of an existing government program, dating back to Howard government days, to subsidise satellite broadband in rural and remote areas.

The rollout is chewing up taxpayers’ money at an alarming rate. By June 30 this year, $2.832 billion of taxpayers’ money had been put into NBN as equity; of that more than $900 million had vapourised in three years of accumulated losses. (In 2011-12 alone, NBN Co lost $520m.)

Total equity contributions – entirely taxpayer funded – are projected to reach $30.4bn by 2021. This is almost $3bn more than the Rudd-Gillard government had previously disclosed.

NBN Co is splashing around money with abandon. It pays extremely generous salaries. Average remuneration cost per head was $172,000 in 2011-12, more than 50 per cent higher than the comparable figure at Telstra.

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NSW digs heels in over NBN rollout

NSW consumers could be left to pick up a $400 million bill after the breakdown of negotiations over the rollout of the national broadband network, the state government says.

NBN Co was refusing to pay the full cost for installing the fibre network in NSW, Finance and Services Minister Greg Pearce said in a statement.

That would leave a shortfall of up to $400 million over 20 years, he said.

“The NSW government has negotiated in good faith for two years,” Mr Pearce said.

“We have come down several times on price for accessing the (power) poles and we simply will not go any further.

“The NSW government can simply not accept such terms which would mean families subsidising the NBN through their electricity bills.”

Mr Pearce said the federal government should pay for the NBN rollout because it was federal policy – and he was furious that commonwealth laws could be invoked to gain access to NSW power poles.

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Fast broadband a step closer for isolated communities

NBN Co has selected West Australian and Victorian construction companies to build 10 satellite ground stations that aim to bring fast broadband to Australia’s most isolated communities.

Bunbury-based Perkins (WA) Pty Ltd will build four satellite transmission centres in WA and Cockram Corporation, based in Melbourne, will build six facilities located in NSW, Queensland, Tasmania and SA. The contracts are worth approximately $180 million in total and were awarded following a comprehensive procurement process.

Construction is due to be completed in 2015 in time for the launch of NBN Co’s Long Term Satellite Service that will deliver high speed broadband to an estimated 200,000 homes, farms and businesses in rural and remote parts of the country.

Read more here

Cost of cancelling the NBN at least $2.3 billion

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Taxpayers face an estimated $2.3 billion bill should the National Broadband Network be terminated, a half billion dollar increase on figures from May, according to the Department of Broadband’s annual report.

The report (pdf), released quietly over the weekend, shows the rise in Federal Government liability under the equity funding agreement with NBN Co.

“As at 30 June 2012, NBN Co’s termination liabilities were estimated at $2.3 billion,” the report stated.

The Federal Government previously noted in 2012-13 Budget risk statements that taxpayers would be liable for at least $1.8 billion should a future Coalition Government cull the NBN.

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Broadband pricing major issue for NBN

Researchers from Swinburne University say the affordability of broadband and encouraging its use in low income households poses a major issue for the National Broadband Network. The research found five out of six Australians are online but four in ten households earning less than $30,000 a year could not afford broadband. As more people use broadband and more services become available, those households without a broadband connection are at an increasingly greater disadvantage.
Read the full article here

ACCC approves Telstra structural separation plan

The ACCC have officially announced their approval of Telstra’s structural separation plans by today accepting their revised undertakings.

Prior to this announcment, the competition watchdog originally knocked back Telstra’s first submission by suggesting the Telco had not done enough to ensure they were going to play fair in both wholesale and retail operations after they were structurally separated.

More specifically, the ACCC were concerned with Telstra’s commercial interests involving wholesale ADSL contracts with competitors, and promoting wireless services that would compete against the NBN.

Today’s ACCC announcement now alleviates all these concerns and opens the way to a finalised Telstra-NBN Co agreement and has essentially signalled a major shift of structural reform within the Telecommunications industry and will thus strengthen competition as a result.

ACCC Press Release – ACCC accepts Telstra’s structural separation undertaking

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