NBN: Good-bye FTTP, we hardly knew ye

The Coalition government today signed the death warrant for the roll out of a predominantly fibre-to-the-premises-based National Broadband Network.

Communications minister Malcolm Turnbull and finance minister Mathias Cormann have issued NBN Co with a statement of expectations that will guide the government-owned company in the continuing roll out of the network, which will now be based on a mix of technologies.

The statement of expectations replaces the interim statement of expectations issued to NBN Co in the wake of the federal election. It backs 'Scenario 6' from the NBN Co strategic review.

Under direction from the government, NBN Co last year conducted carried out a strategic review which recommended a move away from a primarily FTTP rollout to a multi-technology mix that would include fibre-to-the-node (FTTN) and fibre to the basement or distribution point (FTTB/DP).

The conclusions of the strategic review were slammed in the interim report of the Senate’s NBN committee. The committee rejected the new NBN rollout strategy and the multi-technology mix underpinning it; a dissenting opinion by the Coalition senators on the committee slammed the report as “grossly misleading and untruthful in its portrayal of the evidence provided”.

The new statement of expectations backs the strategic review’s conclusion that ‘Scenario 6’ in the review be used as the basis for continuing the network’s rollout.

Scenario 6 advocates the use of HFC for connecting premises in areas where HFC networks exist; FTTP in brownfields areas where it’s the “most economical choice” either because of high revenue potential or because of the cost of FTTN; FTTN in areas with lower revenue potential; the use of FTTB especially for large MDUs; and the use of fixed wireless and satellite for 6 per cent of premises.

“The multi-technology mix NBN, as the name suggests, will make use of existing infrastructure where this is economically beneficial and consistent with its broadband quality and speed objectives,” Turnbull said in a speech to the CommsDay summit today.

“In other words the approach, which depends of course on the completion of the negotiations with Telstra, is designed to give NBN Co the same flexibility in terms of technologies that would be available to an incumbent.

“NBN Co will determine which technologies are most cost-effective and should be utilised on an area-by-area basis, taking into account factors such as existing infrastructure, geo-type, population density and demand for high speed services.

“Of course this will take place within NBN Co's other rollout parameters, such as achieving minimum download and upload rates, serving under-served areas with priority, and generating near term revenue.”

NBN Co public equity capital will be capped at $29.5 billion, the statement of expectations (PDF) says.

Areas identified as “poorly served” by the government’s Broadband Availability and Quality Report should be prioritised for the rollout, the letter states.

“The Government expects completion of the NBN will result in the structural separation of Telstra and a competitive market for retail broadband and telephony services,” the letter states.

In a statement issued in response to the statement of expectations, the Competitive Carriers Coalition lauded the government’s commitment to the structural separation of Telstra and to restricting NBN Co’s to being a wholesale-only business

Copyright © 2014 IDG Communications, Inc.

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