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

Janet Hawtin janet at hawtin.net.au
Thu Dec 3 11:30:55 AEDT 2015


Hi
What is the expected lifetime of the repaired copper v fibre to the
premises?
Janet

On 3 December 2015 at 07:34, Andy Farkas <andyf at andyit.com.au> wrote:

> 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
> >
>
> %%%
> 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.
> %%%
>
> -andyf
>
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