The Government wants the NBN to start paying for itself – but there are signs it’s not yet in a position to operate in a commercially efficient way
The start of a new phase: The Australian National Broadband Network (NBN) officially completed its initial rollout in December 2020. The rollout started in 2011 and has not been without obstacles. It has faced repeated delays, soaring costs and changes in direction. The Government abandoned the initial plan to deploy FTTP to 93% of households in favour of a more cost-effective multi-technology mix of copper and fibre (FTTN). Now that the initial rollout is complete, the NBN will enter a new phase. To pave the way, the Government has released a new Statement of Expectations (SoE) setting out the strategic priorities the NBN should have up to 2030.
Time for the NBN to pay for itself: One of the objectives being set requires the NBN to take a “demand driven approach” in making “commercially sound investments”. This is a recurring theme throughout the SoE, which stresses the importance of operating efficiently and managing costs – recognising the substantial investment made by Australian taxpayers to get it up and running. At the same time, the NBN will be expected to address existing access challenges in regional and remote areas. The Government recognises that activities in those areas may not generate a commercial return, but expects the NBN to cross subsidise them using revenues from other parts of the business, as well as contributions from the Regional Broadband Scheme.
Despite the mandate to operate more commercially, the NBN still needs to jump through government hoops: The NBN has taken all of this onboard and this week published its plan up until 2025. It confirms the commitment to invest AUD4.5bn (£2.4bn) to make the highest wholesale speed plans available to 75% of homes and businesses by 2023. In particular, 2m premises will be upgraded from FTTN to FTTP. This will be welcome news for Australians, but it was something initially prompted by the Government – hardly giving the impression that the NBN can make all investment choices independently. The NBN’s relationship with retail ISPs will also require ongoing regulatory oversight, as recent issues have highlighted. The competition authority, the ACCC, is currently designing a new wholesale pricing approach for the NBN, to address the inefficiencies with the current one. The recent problems of hundreds of thousands of customers not getting the expected speeds also showed that ISPs are struggling to get accurate data from the NBN about the performance of new FTTN lines. Promisingly, the NBN’s new plan commits to developing tools and data feeds to help ISPs better support customers on service delivery.
Source: https://www.communications.gov.au/departmental-news/new-statement-expectations-nbn-co
