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This is an old revision of this page, as edited by Boulevardier (talk | contribs) at 06:42, 2 July 2011 (here's a fleshed out lead, i'm sure there are plenty of problems with it. i haven't got time right to dig through and get the citations, sorry. maybe the 3rd and 4th paras should be swapped?). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

Overview of the NBN and how RSPs and wholesalers can connect to the NBN.

The National Broadband Network (NBN) is a wholesale-only open-access data network under construction in Australia by NBN Co. The network will use a combination of fibre to the premises (FTTP), fixed wireless and satellite technologies to provide connections up to one gigabit per second to premises in Australia. NBN Co will wholesale connections on its network to retail service providers (RSP), who will then sell Internet access and other services to consumers. The network will gradually replace the copper network, owned by Telstra and currently used for most telephony and data services.

The NBN began as a Labor party policy while in opposition in 2006. The original plan, as taken to the 2007 Federal election, called for a investment government investment of A$4.7 billion in partnership with the private sector to construct a fibre to the node (FTTN) network that would service 98 per cent of Australians. At the time, the incumbent Howard Government had agreed to invest A$958 million in OPEL Networks, which would invest A$917 million of private capital. This investment was part of the Howard Government's Broadband Connect program, aimed at providing greater access to broadband in rural and regional areas. Following the election, which the Labor party won, the new Rudd Government cancelled this funding agreement with OPEL and issued a request for proposals (RFP) to build the NBN. Telstra submitted a proposal, but was excluded from the process for breaching the RFP requirements. On 7 April 2009, the Rudd Government terminated the RFP and announced instead that it would construct a FTTP network at a total cost of A$43 billion. As part of this new plan, the government established NBN Co and appointed Mike Quigley as its chief executive officer. As part of an agreement with NBN Co, Telstra will decommission its copper and hybrid fibre-coaxial (HFC) networks, and lease access to its exchange space and extensive network ducting to NBN Co to assist in the rollout of the FTTP network.

The network is estimated to cost A$35.9 billion over its 10-year construction period, including an Australian Government investment of A$27.5 billion. This cost has been a key point of both criticism and praise of the NBN proposal. In announcing the plan, then-Prime Minister Kevin Rudd described the project as "the single largest nation building infrastructure project in Australia’s history". However, then-Opposition Leader Malcolm Turnbull described the plan as "a dangerous delusion", and following the 2010 election, Opposition Leader Tony Abbott appointed Turnbull as opposition communications spokesman to "demolish" the NBN. The project is also supported by the Australian Greens and by independent members of Parliament, and by some telecommunications companies; however, other industry stakeholders have expressed concern about the network's effect on competition and the scale of the government investment.

Construction of the NBN began with a trial rollout of the FTTP network in Tasmania, the first stage of which offered connections to 4,000 premises. The first services in this trial rollout were connected in July 2010. The mainland rollout began with five five first-release sites, in Brunswick, Aitkenvale, Mundingburra, Minnamurra, Kiama Downs, Armidale and Willunga. The mainland NBN was officially launched on 18 May 2011. The FTTP rollout will continue with fourteen second-release sites, and will then continue until at least 93 per cent of the population is connected to the FTTP network by the end of the rollout in June 2021. Construction of the fixed wireless network will begin in 2011, delivering its first services in 2012 and to be completed by 2015. The satellite network will consist of two satellites to be launched by NBN Co in 2015, with an interim agreement with Optus and IPStar to provide satellite services to some customers from July 2011.

Policy development

See also: Telecommunications in Australia

Howard Government

See also: Howard Government

In March 2002, the Howard Government established a Broadband Advisory Group (BAG) to review broadband policy in Australia and provide "high-level advice" on "stimulating the availability and take-up of broadband". In its report released on 22 January 2003, the BAG recommended adopting a "national vision for broadband", and that the Federal Government work with other governments and industry stakeholders to form a "national broadband network".[1] The Senate committee for Environment, Communications, Information Technology and the Arts released a report on "The Australian telecommunications network" in August 2004. The report recommended that the Federal Government replace the "increasingly obsolete" copper network with a new network based on fibre to the node (FTTN) or alternative technologies.[2]

In June 2006, the Howard Government launched the Broadband Connect program, calling for expressions of interest from industry on how to invest up to A$878 million in providing greater access to broadband services in rural and regional areas.[3] The government later announced it would invest up to A$600 million in the program and called for tenders.[4] On 18 June 2007 it was announced that OPEL Networks, a 50–50 joint venture between Optus and Elders, was the sole successful bidder in the program, and had signed a funding agreement with the government to receive A$958 million of government investment in combination with A$917 million of private investment by OPEL.[5] The Labor party, in opposition at the time, said they would honour this agreement if they won government in the 2007 federal election.[6] This commitment was repeated by the new Rudd Government in December 2007; however, on 2 April 2008 Communications Minister Stephen Conroy terminated the agreement because OPEL had "failed to meet the terms of [the] contract".[7]

On 15 November 2005, Telstra, the owner of the current copper network, announced a plan to upgrade its ageing networks and systems. The plan included a rollout of a fibre to the node (FTTN) network to 87 per cent of the population. At the time, the Federal Government was the majority shadeholder of Telstra, but the plan did not involve any additional government investment.[8][9] The plans for the network were later put on hold after the Howard Government refused to directly exempt the new network from laws requiring Telstra to allow third parties access to it, instead saying Telstra could achieve the certainty it desired by applying to the competition regulator, the Australian Competition and Consumer Commission (ACCC).[10][11] A group of nine telecommunications companies—AAPT, Internode, iiNet, Macquarie Telecom, Optus, PowerTel, Primus, Soul and TransACT, formerly known as G9—proposed a new company, dubbed "SpeedReach", to take control of the new network and provide equal access.[12] Telstra dropped plans for the new network on 7 August 2006, after reaching a impasse in negotiations with the ACCC.[13] The G9 proposed its own plans to build a FTTN network on 20 April 2007,[14] however, the proposal was rejected by the ACCC on 17 December 2007 because it was concerned the group would give the owner of a network a "high degree of discretion" in determining access conditions.[15]

2007 federal election

See also: Australian federal election, 2007

At the National Press Club on 15 November 2006, then-opposition leader Kim Beazley announced a newly elected Labor Government would build a "super-fast" national broadband network which would deliver "25 times faster" speeds to "98 per cent of Australians". Beazley said the business community has been "crying out" for this infrastructure to raise productivity.[16] Leading up to the 2007 federal election, then-opposition leader Kevin Rudd reaffirmed the national broadband network commitment on 21 March 2007. The updated plan, estimated to cost A$15 billion included a government contribution of A$4.7 billion and co-operation from the private sector. The remaining 17 per cent of the Federal Government's shareholding in Telstra, a total of A$2.7 billion, would be sold to help pay for the government's contribution.[17] When outlining the plan, then-Shadow Minister for Communications Stephen Conroy said the plan was "regulatory reform" needed to break the impasse in negotiations between Telstra, G9, the ACCC and the Federal Government.[18]

The Howard Government did not take a new national broadband policy to the election; instead, it said its existing strategy would "support areas that needed ongoing, targeted government assistance including rural and regional areas where commercial solutions were not always viable". Helen Coonan, then-Minister for Communications, Information Technology and the Arts said the government's plan would "deliver broadband to all Australian consumers".[19]

Rudd Government

See also: Rudd Government

After winning the 2007 election, the new Rudd Government issued a request for proposals (RFP) to build the NBN. Six proposals were submitted, from Acacia, Axia NetMedia, Telstra, Terria, the Tasmanian Government and TransACT. Telstra's proposal was later excluded from the process as their submission did not comply with the RFP requirements.[20][21][22][23] During the RFP, the Rudd Government received legal advice stating that if they were to continue with the project and use the existing copper telephony network, the Australian constitution would require compensation estimated at A$15–20 billion to be paid to Telstra. The expert panel evaluating the proposals raised concerns the compensation could be used to build a competing network, which would devalue the new FTTN network.[24][25]

[The NBN] is the single largest nation building infrastructure project in Australia’s history.

—Kevin Rudd, then Prime Minister, announcing the NBN.[26]

With the other bidders unable to raise the necessary capital funds for the project during the global financial crisis, the Rudd Government terminated the RFP on 7 April 2009 and announced it would instead construct a FTTP network, bypassing the copper network entirely. Tasmania was selected for a trial deployment, building on the Tasmanian Government's submission to the RFP, with a view to starting construction in July 2009.[27] The Government established NBN Co on 9 April 2009 to design, build and operate the NBN.[28] Mike Quigley was appointed chief executive officer on 25 July 2009,[29] however, his appointment was overshadowed by a bribery investigation at his former employer, Alcatel-Lucent. Quigley was not found guilty of any wrongdoing and was not questioned by investigators.[30] In response to Google Fiber,[31] Mike Quigley announced on 12 March 2010 that a peak speed of one gigabit per second would be available over fibre connections on the NBN.[32] NBN Co forecasts that average broadband speeds will reach 100 megabits per second in 2015 and one gigabit per second in 2022.[33]

The Rudd Government introduced Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 in the Parliament on 15 September 2009. The bill would prevent Telstra from acquiring radio spectrum, freed up by the digital television transition, if it does not separate its wholesale and retail businesses, among other regulation changes in the telecommunications industry.[34] However, the bill lapsed on 28 September 2010 when the Parliament was dissolution for the 2010 federal election.[34] In exchange for the Greens support for the bill and facing a Senate order,[35] the Rudd Government released the implementation study on 6 May 2010. The study, commissioned in April 2009, concluded the NBN can be implemented within the original A$43 billion of capital expenditure using a mix of fibre, wireless and satellite technologies. The study, completed by McKinsey & Company and KPMG, also made 84 recommendations, including expanding the fibre footprint to 93 per cent, instead of the original 90 per cent.[36][37]

A non-binding financial heads of agreement was signed between Telstra and NBN Co in June 2010. Telstra agreed to gradually decommission the copper network and provide NBN Co access to exchanges and ducts avoiding the cost of infrastructure duplication; in exchange, NBN Co agreed to pay Telstra a total of A$9 billion progressively throughout the rollout.[38][39] During a hearing of the Joint Standing Committee on the NBN in May 2011, Malcolm Turnbull expressed concern the agreement does not transfer ownership of the existing copper network away from Telstra. Turnbull said transferring ownership would avoid problems if government policy changed in the future to favour a FTTN network.[40][41]

2010 federal election

See also: Australian federal election, 2010

In the lead up to the 2010 federal election, the Coalition released an alternative broadband policy on 10 August 2010, which would use A$6.25 billion of government funds to expand ADSL2+ availability, increase optical fibre backhaul, build fixed wireless networks where ADSL would be impractical and require a minimum peak speed of 12 megabits per second to be delivered to 97 per cent of the population.[42] In a Walkley-awarded[43][44] interview on The 7:30 Report, Kerry O'Brien questioned Leader of the Opposition Tony Abbott on the Coalition's broadband policy. Abbott respond by saying "I'm no Bill Gates here and I don't claim to be any kind of tech head".[45] Subsequently, the Gillard Government re-announced on 12 August 2010 the NBN would provide peak speeds of one gigabit per second.[46]

The election resulted in a hung parliament; which both major parties required support from independent MPs to form government. Independent MPs Tony Windsor and Rob Oakeshott cited the NBN as one of the key factors in deciding to support an Gillard Government.[47][48] In return for their support, the Gillard Government agreed to rearranged the deployment of the NBN to give "priority" to regional and rural areas.[47] Peter Gerrand, editor-in-chief of the Telecommunications Journal of Australia, described the NBN as "the defining issue in Australian politics in 2010".[49] Following the election, Tony Abbott appointed Malcolm Turnbull as the Shadow Minister for Communications to “demolish" the NBN[50]

Gillard Government

See also: Gillard Government
A manhole for access to Telstra's ducts; this infrastructure is used by NBN Co.

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 was introduced in the Parliament on 20 October 2010 and passed on 29 November 2010.[51] The bill will prevent Telstra from acquiring radio spectrum, freed up by the digital television transition, if it does not separate its wholesale and retail businesses.[51] The details of this structural separation were part of the agreement between Telstra and NBN Co to "remove [the] risk that Telstra and NBN Co would compete head to head, which would have been a horrible outcome".[39] Senators applauded when the bill passed the Senate with support from independents and the Greens.[52]

NBN Co signed an agreement with Telstra and Optus on 23 June 2011. During the NBN rollout, Telstra agreed to decommission its copper network and hybrid fibre-coaxial network in areas where fibre has been installed and lease its infrastructure to NBN Co for approximately A$9 billion post-tax net present value.[53] Optus agreed to progressively decommission its hybrid fibre-coaxial network from 2014, in exchange for approximately A$800 million post-tax net present value.[54] NBN Co will lease Telstra's dark fibre, exchange space and ducts for 35 to 40 years, with the option of two ten-year extensions.[53] Both companies' mobile infrastructure was not included in the agreement and both hybrid fibre-coaxial networks came be used for pay television services,[54] however, Telstra can not market their mobile network as an alternative to the NBN for 20 years.[53] Before the agreements can come into effect, shareholders and the ACCC must approve the agreement. Telstra planned to take the agreement to its shareholders in July 2011, however, it has been delayed because of ongoing negotiations.[55]

The Parliament passed the National Broadband Network Companies Act 2011 and a related bill on 28 March 2011[56] with amendments by the Greens and independent senators adopted on 26 March 2011.[57] The amendments centered around transparency, freedom of information and competition concerns, including the adoption of uniform national wholesale prices for NBN connections.[58][59]

On 20 June 2011, the Productivity Commission said they have began an investigation spanning across approximately three months to look into allegations of anti-competitive behaviour by NBN Co in new housing estates. Three separate complaints were received from private greenfields fibre builders, led by Greenfield Fibre Operators Australia chairman and OPENetworks' Michael Sparksman. The operators were concerned that NBN Co was misleading housing estate developers by promoting its role as "provider of first choice", rather than its commitment as the "provider of last resort".[60]

Network design

NBN Co plans to connect at least 93 per cent of the population to the NBN with FTTP technology,[61] with the remainder serviced by either fixed wireless or satellite technologies.[62] The FTTP build costs for each premise increases with each percentile because of a low population density in the last 7 per cent.[61] The FTTP coverage of only 93 per cent could be achieve with the current funding,[63] however, the fibre footprint will be expanded to areas where users, communities or councils are willing to pay the incremental costs of installing FTTP.[64] The technologies will connect the network termination unit (NTU) on premises to a point of interconnect (PoI), where RSPs can access the NBN. Devices using the NBN can connect using the Ethernet or telephone ports on the NTU.[65] Mike Quigley has said the "ubiquity and standardisation" is important in the NBN, he continued RSPs will be able to connect to PoIs "using the same BSS processes and interfaces, at the same prices and with the same product constructs as far as is possible across all three technology products".[66]

Fibre to the premises

The FTTP network.

Premises within the FTTP footprint are connected using Ethernet over a gigabit passive optical network (GPON) giving a peak speed of one gigabit per second.[46][67] A fibre-optic cable, known as the "drop fibre", goes from the NTU to the street ending at the top of a power pole or in an underground pit. The "drop fibre" cable joins a "local network" which links a number of premises to a splitter in the fibre distribution hub.[68] A "distribution fibre"[69] cable connects the splitter in the distribution hub to a fibre access node, which is linked up to a PoI.[68] Mike Quigley said one of the advantages of a GPON network is the distribution hub requires no electronics. He used an example in the United States where a hub was "under water and full of mud" and it continued to function while the fire department used a high pressure hose to clean it.[70] Without electronics, the distribution hub does not require a power supply and a battery for power outages. In a GPON network only the local exchanges housing the fibre access nodes and the NTU on premises requires a power supply.[70][71]

The FTTP network architecture chosen by NBN Co comprises a number of replicating modules which is combined to make up the FTTP network.[72] A fibre distribution area includes up to 200 premises linked up to a fibre distribution hub. A fibre serving area module comprises 16 fibre distribution areas, which services up to 3,200 premises.[72] A fibre serving area comprises 12 fibre serving area module connected to a fibre access node, which services up to 38,400 premises. During the 10-year construction, NBN Co plans to build or lease approximately 980 fibre serving areas, servicing up to 37,632,000 premises.[72] Mike Quigley said the modular design will decreases the construction risk of the NBN and allow continuous improvements in the construction, network design and supply chains.[73]

The copper network delivers line power from the local exchange to the premises, which is sufficient to power a corded analogue telephone.[71] During power outages, this current is supplied by onsite diesel generators[70] at the exchange. As fiber-optic cables are electrically inert, the NTU and the telephone requires power from a battery on the premises.[71] NBN Co will supply a battery in the NTU to power the telephone ports for up to five hours during power outages.[74] The battery will have a life span of three to five years, the end users or their RSP will be responsible for maintenance and replacement of the battery.[75]

Fixed wireless and satellite

Diagram showing how the network termination units (NTUs) will be linked to the base station and gateway using fixed wireless and satellite.

NBN Co will deploy a 4G Long Term Evolution fixed wireless network covering approximately 4 per cent of the population outside the fibre footprint.[76] The NTU on premises in the fixed wireless footprint will be hooked up to an antenna allowing a connection to a wireless base station; the base station links to a PoI via a backhaul.[77][78] The 2.3 GHz and 3.4 GHz spectrums[79] will be used to delivery these fixed wireless services. Unlike the mobile networks, only the NTU can connect to the NBN's fixed wireless network.[80] The number of premises assigned to each base station will also be limited.[63] Mike Quigley said the limits will ensure users received a "good service" because of the "high[er] throughput".[63] Users at the edge of the coverage for each base station will receive a peak speed of 12 megabits per second, the speed increases "considerably" moving closer to the base station.[81]

NBN Co is planning to launch two Ka band satellites by 2015, each offering 80 gigabits per second of bandwidth of which is a jump from the four to six gigabits per second capacity available from current satellites above Australia.[63][82][83] In the interim, NBN Co will use existing satellite to provide six megabit per second to a limited number of premises who currently do not have access to broadband speeds.[63][84] The satellites will be used to bounce signals from a satellite dish on the premises to an earth station, known as a "gateway"; the gateway is then connected to a PoI via a fibre backhaul.[78][85] Mike Quigley said the satellite design was "not easy", because the required coverage is about "five per cent of the world's land mass" containing "at least 200,000 premises" spread across "over 7,000 kilometres" of area between Cocos Islands and Norfolk Island.[63]

Retail service providers

RSPs can connect their network to the NBN at one of the 121 Points of Interconnect (PoI).[86] NBN Co's original plan for a more centralised model with only 14 PoIs, but the plan—on the advice from the Australian Competition and Consumer Commission (ACCC)—was overruled by the Federal Government. The ACCC considered the plan to be "mission creep" of the role of NBN Co, as it would have largely given NBN Co a monopoly over backhaul. NBN Co's counter argument was that the plan would have allowed smaller RSPs to connect directly to the NBN without having to go through a wholesale aggregator.[87]

NBN Co sells layer 2 access of its network to RSPs, while smaller RSPs can opt to purchase access from a wholesaler. RSPs will then sell Internet access and other services to consumers.[88] NBN Co will have uniform pricing within each technology and across technologies for the basic package, regardless of where the service is delivered.[89] To provide this uniform pricing, regional and rural areas will be cross-subsidised with the lower cost metropolitan areas. To prevent other potential providers from undercutting NBN Co in metropolitan areas, new fibre networks are required to be open access and charge similar prices; these rules are known as the "anti-cherry picking" provisions, which were passed into law with other NBN legislation.[90]

Expected cost and return

When announcing the FTTP incarnation of the NBN, the Rudd Government estimated to the total cost of the project would be A$43 billion. NBN Co later revised down the cost in its business plan to A$35.9 billion.[91] The project is to be financed by a combination of a Federal Government investment of A$27.5 billion and private investment for the remainder.[91] NBN Co intends to begin paying dividends back to the Federal Government in 2020, and to have fully repaid the Government's contribution by 2034. A key part of NBN Co's business plan costings is a total of A$13.7 billion in cash payments to Telstra over the 9 years to December 2020.[92] These payments are part of a proposed agreement with Telstra, which would see NBN Co able to use Telstra's existing network infrastructure and the decommissioning of the copper network to reduce the cost of the rollout.[93]

The size of the government investment in the project has been a key point of both criticism and praise of the proposal. Then-Coalition leader Malcolm Turnbull called for a cost-benefit analysis because of the size of the government contribution, saying "a $43 billion vision without any business plan, without any way of knowing how or whether it can be paid for ... is a very dangerous delusion".[94] In February 2011, the Economist Intelligence Unit released a study that reviewed more than 40 national government plans for broadband development. The study gave the NBN plan a score of 3.4 out of 5 on its index; its key criticism of the project was its "huge cost to the public sector", saying it was "24 times [the price of] South Korea's [plan]".[95] Steven Joyce, the Minister for Communications and Information Technology in New Zealand, which is rolling out a similar network, was surprised at the size of Australia's NBN investment and said "the Aussies trumped us again".[96] Vint Cerf, co-creator of TCP/IP, said the NBN is "a stunning investment in infrastructure that in my view will have very long term benefit", but that "for these kinds of infrastructure like phenomenon it’s very hard to predict what the result will be" since "measuring the benefits is a non-trivial exercise".[97]

NBN Co's business plan forecasts a return on investment of 7 per cent, expecting to turn over revenue of A$5.8 billion by 2021.[98] Prime Minister Julia Gillard says "taxpayers will be repaid their investment in the NBN with interest",[98] however, Opposition communications spokesman Malcolm Turnbull said in response to the 2011 federal budget that "expectations of strong early revenues [for NBN Co] are looking overly optimistic".[99]

Construction

Construction of the NBN began with a trial rollout in Tasmania,[100] with the first customers connected in July 2010.[101][102] NBN Co plans to complete the FTTP rollout by June 2021,[103] along with the completion of the fixed wireless[76] and satellite rollout by 2015.[82][83]

Fibre to the premises

Trial rollout

The trial rollout in Tasmania, including stage one (in red), two (in yellow), three (in green) and fibre "backbones" (in grey).

Tasmania was selected as the first state[100] to begin the rollout of the NBN, based on the Tasmanian Government's "shovel ready"[104] submission to the RFP for the original NBN.[27] A new company, NBN Tasmania (previously Tasmania NBN Co),[105] was formed on 8 April 2009 to build the NBN in Tasmania.[106] The company was planned to be a joint-venture between NBN Co, Aurora Energy and the Tasmanian Government.[104] The Tasmanian Government also floated an idea to invest A$12.7 million in Aurora Energy to get access to its fibre network, however, the joint-venture and deal were both cancelled on 9 November 2010 when the negotiations reached a impasse.[104][107] Although the joint-venture was cancelled, Aurora Energy still plays a role in the construction of the NBN in Tasmania.;[108]

The trial rollout in Tasmania comprises three stages. Stage one was announced on July 2009 with the first customers being connected a year later.[101][102] Stage one included connections to premises in Smithton, Scottsdale and Midway Point[108] and construction of fibre "backbones" from Port Latta to Smithton, Cambridge to Midway Point, Midway Point to Triabunna, George Town to Scottsdale and Scottsdale to St Helens.[109] On completion of stage one, 4,000 premises were offered fibre installation; 51 per cent took up the offer.[110] As of 6 May 2011, 712 premises have an active service and 11 premises are awaiting service activation by a retail service provider (RSP).[108]

The Tasmanian Parliament passed opt-out legislation on 18 November 2010,[111] to allow NBN Co to install fibre connections to premises unless the property owners explicitly decline the installation.[112] The fibre connection is free, however, if the installation is declined and a connection is ordered at a later date, NBN Co may charge a connection fee.[113] The bill passed the Tasmanian lower house with the support of all members.[111] During his second reading speech, then-Premier of Tasmania David Bartlett said the take-up rates were "a good early result", however, he said it was "important to increase the participation rate".[113] In his closing remarks, Bartlett said "[the] NBN in Tasmania is a once-in-a-generation opportunity to create jobs and contribute to a new economic direction".[114] In her second reading speech on behalf of the Tasmanian Opposition, Elise Archer said "the NBN is an important infrastructure", but that "the State Liberals have some concern that the NBN business model seems to rely more and more on eliminating competition and other technologies".[115]

Stages two and three were announced on 21 October 2009 and 1 March 2010, respectively. Approximately 11,150 premises in Sorell, Deloraine, George Town, St Helens, Triabunna, Kingston Beach and South Hobart were included in stage two.[116][117] Stage three includes approximately 90,000 premises in Hobart, Launceston, Devonport and Burnie.[118] Stage two will include a trial of expanding the FTTP footprint to areas not included in the initial rollout. The trial will allow individuals and councils to pay the incremental cost of a fibre connection over fixed wireless in order to receive a fibre connection from NBN Co. The costs will include provisioning further space in exchanges and rolling out additional fibre optic cables.[119]

At the time of launch, the access prices for RSPs were temporarily set at a flat rate of A$300 per premises with no ongoing monthly charges.[120] Mike Quigley said one of the reasons for the flat rate is the OSS and BSS systems was not built to make the process automatic. He continued if NBN Co charged a monthly charge without the systems, it would have been a "very manually intensive process" and not a "sensible proposition".[121] However, RSPs did charge a monthly fee to customers, to cover the cost of the trial.[121]

First and second release sites

The first (in red) and second (in green) release sites of the NBN rollout.

The first mainland sites were chosen on 2 March 2010 and later expanded on 8 July 2010: approximately 12,200 premises in Brunswick, Aitkenvale, Mundingburra, Minnamurra, Kiama Downs, Armidale and Willunga were included.[122] The sites were chosen due to their varied topography and housing styles, representing the "challenges the NBN is expecting to face" during an Australia-wide rollout; both underground and aerial installation were trialled.[123] Construction in the release sites commenced on 17 August 2010,[124] with the first services going live on 19 April 2011.[125] Armidale was the first release site to officially launch connections, with seven customers connected by the launch on 18 May 2011.[126] Approximately 2,900 premises in Armidale were offered fibre installation; 90 per cent of them took up the offer.[127]

The construction of each site in the first release began at the same time, although each site had a different construction pace. Mundingburra in Townsville led the construction, however, Cyclone Yasi caused a major delay in the rollout. There were also delays in other sites, including Brunswick which had asbestos in Telstra ducts and Kiama Downs where volcanic rock and construction of a backhaul in a environmentally sensitive swamp area caused delays.[128] During a senate estimates hearing on 16 June 2011, Coalition Senator Eric Abetz asked if Tony Windsor's support for the Gillard Government played a role in Armidale, which is inside Windsor's New England electorate, being the first release site to officially launch. Minister Stephen Conroy said the selection of Armidale were made "at least eight or nine months" before the election at which point "polling ... suggested we were going to win a majority in our own right".[129]

Fourteen second release sites comprising 45,000 premises in all states and territories were announced on 8 July 2010 with construction due to commence in the 2nd quarter of 2011. The sites comprise premises in Bacchus Marsh, Brisbane (inner north), Casuarina, Coffs Harbour, Geraldton, Gungahlin, Mandurah, Modbury, Prospect, Riverstone, South Morang, Springfield Lakes, Toowoomba and Victoria Park.[130] Telstra had agreed to allow NBN Co to use its exchanges and ducts in the second release sites before the agreement is finalised. Mike Quigley said the "go button" will not be pressed on the main rollout of the NBN, until the agreement is completed.[131]

Construction tender

In April 2010, NBN Co began a tender for the major FTTP rollout. 14 vendors submitted a proposal, however, NBN Co indefinitely suspended the process on 1 April 2011, as the prices were "unacceptably high".[132] After the suspension, NBN Co entered into "intense" negotiations for eight weeks, until signing agreement worth up to A$380 million with Silcar on 1 June 2011. The agreement covers the construction of the NBN in Queensland, New South Wales and the ACT by Silcar, an company joint-owned by Siemens and Thiess.[133] The agreement also includes the option of a two-year extension with an additional value of A$740 million.[134]

Fixed wireless

On 1 June 2011, NBN Co signed an initial 12-month contract with Ericsson to design, build and operate the network with options to extend the contract for up to 10 years at a total cost of A$1.1 billion. Construction will commence in 2011, with first services scheduled to begin in 2012 and completion in 2015.[76] The wireless network will use the 2.3 GHz and 3.4 GHz spectrums bought from Austar for A$120 million in February 2011.[135]

Satellite services

NBN Co is planning to launch two Ka band satellites by 2015 at a total cost of A$1 billion, each offering eighty gigabytes per second of bandwidth.[82][83]

Interim

In the interim, NBN Co selected Optus and IPstar to provide six megabits per second services from July 2011. These interim services will be given to customers without access to speeds greater than 512 kilobits per second.[84] Optus will be paid $200 million to provide managed satellite services and satellite capacity, while IPstar will receive A$100 million to provide additional satellite capacity. These services will replace the current Australian Broadband Guarantee which is due to end on 30 June 2011.[136]

Response

Political

The Coalition has described the NBN as a "dangerous delusion", saying the private sector could build a broadband network with less government intervention and achieve similar results.[94] Following the election, Tony Abbott appointed Malcolm Turnbull as the Shadow Minister for Communications to “demolish" the NBN, describing it as "a while elephant on a massive scale".[50] Shadow Treasurer Joe Hockey said before the 2010 election that a Coalition government would "not be proceeding with the National Broadband Network", which he said would save the government A$18 billion.[137] However, Nationals senate leader Barnaby Joyce said the NBN mirrors a proposal released in 2005 by the Nationals' think tank, the Page Research Centre, saying "[the NBN] delivers a strategic infrastructure outcome" and that "it is vitally important that the National Broadband Network gets to the corners of our country where the market has failed, at a price that is ... affordable".[138][139]

The Australian Greens support the project, describing it as "exactly the sort of long-term investment we should be making to give Australia some kind of future beyond the mining boom".[140] The Government has required support from the Greens to pass NBN legislation through the Parliament. The Greens have voted in favour of NBN legislation, but have also won support for amendments that make NBN Co subject to freedom of information laws,[141] and that make any proposal to privatise the NBN subject to review by the Parliament and by the Productivity Commission.[142] The Government has also required the support of other independent and minor party members and senators for NBN legislation. Independent MPs Rob Oakeshott, Tony Windsor, Bob Katter and Andrew Wilkie have expressed support for the NBN.[143][144] Independent senator Nick Xenophon also supported NBN legislation in the upper house, but only after the government agreed to release a summary of NBN Co's business case.[145] Family First Party senator Steve Fielding supported the same bill, saying "there is no reason to be treading water when we have a viable plan to bring us up to speed".[146]

Other stakeholders

Some telecommunication companies, including Optus,[147][148] iiNet,[147][148] Internode,[147] and Vodafone-Hutchison,[148] have expressed support for the project, along with the Australian Internet Industry Association, which said optical fibre solutions are "a critical part in the evolution of the internet".[149] Internode managing director Simon Hackett said he was "glad [the NBN is] going to go ahead".[147] Vodafone-Hutchison CEO Nigel Dews said the NBN will “transform the competitive landscape”.[148] However, other telecommunications companies including AAPT,[150] PIPE Networks[151] and Exetel[152] have expressed opposition to the NBN. AAPT chief executive Paul Broad said the NBN will "stifle competition".[150] PIPE Networks founder Bevan Slattery said the NBN is "economically irresponsible".[151] Exetel chief executive John Linton described the NBN as a "political stunt".[152]

Microsoft, Google and Intel have expressed their support for the NBN.[148][147] Google's head of engineering, Alan Noble, said the NBN will "be the greatest enabler of innovation". Intel managing director Philip Cronin said "the NBN has the potential to deliver significant long term benefits".[147] The Swinburne University of Technology conducted a survey of Australian Internet usage for the World Internet Project between September 2009 and October 2009. The survey asked a number of questions about Internet usage and how it influences daily life.[153] The survey also included a question asking if the interviewee thought the NBN was a "good idea"; 74.5 per cent agreed.[154] The survey of 1,000 people also found the NBN has stronger support among younger people.[155]

See also

References

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