In the bigger picture.
The NBN fixed line network will supposedly reach 91% of all premises. It could have been an all fibre network, or at least fibre up to the curb. Extension into the home for copper in the old system and now for fibre at green fields sites has always been at the home owners expense. The NBN Co decided for existing premises to include the lead-in costs for the project as an NBN cost, and not to off load it to the consumer directly. This added perhaps unrealistically to the FTTP costs compared with the other fixed line options.
The whole process of creating and rolling out the NBN was commercially compromised as others have noted, making it a more expensive solution than it needed to be. The previous privatisation of Telstra and a reluctance of both sides of the political spectrum to respond appropriately is just one significant factor. This has added more than $1B pa to the cost of running the NBN for no true benefit. Except to Telstra’s profits!
It is reasonable to expect a strong economic argument for the FTTP outcome across the current fixed line footprint has always been possible. More so if the economic case had been separated from the costs of the national fibre backbone (NBN Co - Transit - related Capex) and Fixed Wireless/satellite footprint.
Investment in a substantial nationwide fibre backbone, transit network was always going to be needed, even we had stayed with ADSL, cable and more mobile data.
The NBN has been asked by Government to provide a commercial rate of return on the total capital investment. This includes the nation building Transit interconnection costs and a cross subsidisation of the FW and Satellite services. The whole project is loaded with unrealistic expectations and costs that in the past would have been funded separately from the public purse. The same way the National Highway network is substantially funded.
Given suitable regulation, private equity may have delivered the full fat FTTP solution at a reasonable cost and rate of return on investment. Excluding the Transit Network, FW and Satellites. Government should have been in a position to do the same directly, at a similar cost?
The other approx 1.1 million customers in the Fixed Wireless and Satellite footprint present a complex economic case. There remains a lack of transparency in the design details and of costs to know the true level of subsidy that would be needed to support better solutions. It is perhaps also relevant to consider estimates of cost derived from current best practice, and not dated NBN Co past practice. The later were used to argue for less fibre and push more to FW or satellite.
It’s unlikely in the near future fibre would reach the more remote properties in Australia. The remote communities of Cape York are not even connected to the national electricity grid. A combination of satellite and or FW services would always require substantial subsidy, although perhaps less in total the fewer the premises to be covered? Including perpetual loss making investments in a supposedly profit making business defies economic rational. No analysis needed. Publically owned and subsidised.
There are several published articles that consider the economic return on investment for the NBN if sold. A common theme is that the government may need to write off the majority of the investment in the NBN to meet the market. There is some further discussion here -
