[LINK] Hate to say it Malcs, but "we told you so"

[Andy Farkas]

Professor Rod Tucker does some numbers:

<https://theconversation.com/what-will-the-nbn-really-cost-51562 
<https://theconversation.com/what-will-the-nbn-really-cost-51562>>

Unfortunately he wrote that before this new leak:

<http://www.theaustralian.com.au/business/technology/nbn-co-faces-new-network-blowout-bill-on-copper-repair/story-e6frgakx-1227631747650>

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The company building the government’s National Broadband Network is facing
a $640 million bill to repair and replace parts of the decrepit copper 
network it
bought from Telstra to underpin the nation’s biggest-ever infrastructure 
project.

Confidential NBN documents obtained by The Australian reveal the company is
looking at a tenfold blowout on what it originally thought it would cost to
remediate the old copper network that forms the basis of the Coalition’s
fibre-to-the-node rollout.

The leaked documents for the first time reveal the cost that the NBN 
will incur
to fix the copper network it bought from Telstra last year in an $11.2 
billion deal.

NBN expects to spend $26,115 per node to fix Telstra’s copper lines to 
ensure it
can deliver the speeds and service quality promised for Malcolm Turnbull’s
mixed-technology network.

The documents make a mockery of the assumptions contained in a 2013
strategic review, prepared after the Coaliton won power, which put the 
cost of
remediating copper connections at just $2685 for each node.

Each node is a small fridge-sized, fibre-connected box that sits on 
street corners
and connects to Telstra’s copper network to ­deliver super-fast 
broadband speeds
to homes and businesses.

With the NBN planning to build 24,544 nodes by the end of 2019 — each of 
which
will connect up to 178 premises — the total bill to fix faulty copper 
lines will be
about $641m. The documents also reveal that a further $520m is ­expected 
to be
incurred by NBN for connecting “high-cost premises”, which are homes and
businesses located at unusually large distances from nodes.

The NBN distanced itself from the figures in the documents, saying they 
were a
draft that had not been endorsed by the executive committee of the company.

A spokesman for the NBN said any costs to remediate the copper network were
contained in its cost projections for FTTN connections, which come in at 
$2300
per premise. In comparison, the cost to connect homes and businesses to the
fibre-to-the-premise network favoured by Labor was $4400 for each site.

Once construction of the NBN is complete in 2020, about 38 per cent of homes
and businesses will be passed by the FTTN network, 20 per cent will be 
passed
by FTTP and 34 per cent will be passed by what used to be Telstra’s and 
Optus’s
cable networks.

While the NBN’s technology mix was supposed to be vastly cheaper to deploy,
the company revealed in August that construction costs would be increased to
between $46bn to $56bn, up from its original estimate of $41bn.

The internal NBN documents warn that download and upload speeds on the
network could suffer if remediation work is not completed. This would create
additional burdens on connecting premises and hamper timely ­migration to
the new network.

“(The) state of the copper network is considerably worse than expected,
leading to extensive work beyond the node,” the documents say.

The documents describe the possibility that the task of fixing the copper
network could be of a greater magnitude of risk, which is “almost certain”
to occur.

With remediation works added in, the cost of each node is $244,150 which
is about 2.3 times the $104,762 price assumed in the 2013 strategic review.

The revelation of the expensive copper remediation costs will raise 
questions
about the NBN’s due diligence process and disclosures by Telstra when the
two parties signed their $11.2bn deal for transfer of the copper network.

In August, about eight months after NBN and Telstra signed off on that deal,
NBN chief executive Bill Morrow said the company still did not fully 
know the
quality of the copper network and how much it would cost to remediate.

“Malcolm Turnbull bought back the copper network John Howard sold and
remarkably, he didn’t even do his due diligence to see what kind of shape it
was in,” said opposition communications spokesman Jason Clare.

There has been much criticism of the government’s decision to go with FTTN,
with critics arguing Telstra’s old copper network is too old and rundown to
deliver the broadband speeds that will be needed in the future.

Despite this, FTTN trials have produced good results for the NBN, delivering
download speeds of 100Mbps and upload speeds of 40Mbps for residents who
live within 400m of a node.

The release of NBN’s copper remediation costings is the second damaging leak
to come from within the government-funded network builder in just a week.

Last week it was revealed the NBN had drawn up plans to replace the Optus
cable network in a move that could cost the project $375m and make it miss
its 2017 and 2018 connection targets.

The NBN paid $800m in 2012 for the Optus hybrid-fibre coaxial network —
which is used to deliver broadband and pay-TV services — but the company
has since discovered that large portions of the network are in such poor
condition that they will need to be replaced to deliver super-fast internet
access speeds.

Minister for Communications Mitch Fifield said the NBN had a solid track
record under the ­Coalition. “The multi-technology NBN rollout will require
around $30 billion less in peak funding compared to reverting to a
fibre-to-the-home plan and it will be finished by 2020,” he said.
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-andyf