Australia’s Troubled National Broadband Network Delivers a Fraction of What Was Promised

The newly elected government will inherit a floundering AUD $51 billion broadband network that’s providing slower service to fewer properties than planned

Advertisement

On 18 May, voters in Australia’s federal election will determine whether the Liberal-National Coalition will remain in control or the Australian Labor Party will win the government. Either way, the new leaders will have to contend with the National Broadband Network (NBN), a lumbering disaster that began as an ambitious effort by the Australian government to construct a countrywide broadband network.

When the NBN was first proposed in April 2009, the government aimed to build a fiber-optic network that would deliver connections of up to 100 megabits per second to 90 percent of Australian homes, schools, and workplaces within eight years. A decade later, however, the NBN has failed to deliver on that promise. NBN Co., the government-owned company created to construct and manage the network, now expects to deliver 50 Mb/s connections to 90 percent of the country by the end of 2020.

“None of the promises have ever been met,” says Rod Tucker, a telecommunications engineer and professor emeritus at the University of Melbourne. The watershed moment for the network was the 2013 federal election. That year, the Labor government that had championed the network was replaced by a conservative coalition government. The new government promptly reevaluated the NBN plan, taking issue with its projected cost.

The original plan, estimated to cost AU $43 billion, was a fiber-to-the-premise (or FTTP) plan. FTTP, as the name implies, requires threading fiber-optic cable to each and every building. The coalition government balked at the price tag, fired NBN Co.’s CEO, restructured the company, and proposed an alternative fiber-to-the-node (or FTTN) strategy, which was estimated to cost no more than AU $29.5 billion. The cost has now ballooned to more than AU $51 billion.

The reason an FTTN network theoretically costs less is because there’s less fiber to install. Rather than run fiber to every premise, FTTN runs fiber to centralized “nodes,” from which any number of technologies can then connect to individual premises. Fiber could be used, but more typically these last-mile connections are made with copper cabling.

The rationale behind the FTTN pivot was that there’s no need to lay fiber to homes and offices because copper landlines already connect those buildings. Unfortunately, copper doesn’t last forever. “A lot of the copper is very old,” says Mark Gregory, an associate professor of engineering at RMIT University, in Melbourne. “Some of it is just not suitable for fiber to the node.” Gregory says that NBN Co. has run into delays more than once as it encounters copper cabling near the end of its usable life and must replace it.

NBN Co. has purchased roughly 26,000 kilometers of copper so far to construct the network, according to Gregory—enough to wrap more than halfway around the Earth. Buying that copper added roughly AU $10 billion to the FTTN price tag, says Tucker. On top of that, NBN Co. is paying AU $1 billion a year to Telstra, the Australian communications company, for the right to use the last-mile copper that Telstra owns.

But perhaps the worst part is that even after the cost blowouts, the lackluster connections, and the outdated copper technology, there doesn’t seem to be a good path forward for the network, which will be obsolete upon arrival. “In terms of infrastructure,” says Gregory, “it’s pretty well the only place I know of that’s spent [AU] $50 billion and built an obsolete network.”

Upgrading the network to deliver the original connection speeds will require yet another huge investment. That’s because copper cables can’t compete with fiber-optic cables. To realize 100 Mb/s, NBN Co. will eventually have to lay fiber from all the nodes to every premise anyway. Gregory, for one, estimates that could cost NBN Co. an additional AU $16 billion, a hard number to swallow for a project that’s already massively over budget. “Fiber to the node is a dead-end technology in that it’s expensive to upgrade,” says Tucker, who also wrote about the challenges the NBN would face in the December 2013 issue of IEEE Spectrum.

After the federal election, the incoming government will have to figure out what to do with this bloated project. NBN Co. is far from profitable, and even if it was, it still owes billions of dollars to the Australian government. If the government does decide to bite the bullet and upgrade to FTTP, it will have to contend with other commercial networks now delivering equivalent speeds.

Had Australia delivered the NBN as originally promised, it would have been one of the fastest, most robust national networks in the world at the time. Instead, the country has watched its place in rankings of broadband speeds around the world continue to drop, says Tucker, while places like New Zealand, Australia’s neighbor “across the ditch,” have invested in and largely completed robust FTTP networks.

“It was an opportunity lost,” says Gregory.

This article appears in the May 2019 print issue as “Australia’s Fiber-Optic Mess.”

Advertisement