Senator Lundy recently spoke (remotely via video) to the European Competitive Telecommunications Association HighSpeed 2010 conference in Brussels. Below is the video of her speech, which outlines the National Broadband Network status, goals and strategy for Australia.
Transcript:
Hi. It’s my pleasure to be speaking at the European Competitive Telecommunications Association HighSpeed 2010 conference.
I’m sorry I can’t be with you personally, but it’s my pleasure to be able to present to you an update on the National Broadband Network in Australia.
It’s been a very exciting time for the network, the National Broadband Network with the release, the public release of the Implementation Study conducted by McKinsey & Co, KPMG.
This study was commissioned by the Government, and those organisations worked very closely with NBN Co to do a very detailed analysis of the National Broadband Network & rollout.
I’m really pleased to let you know that the Implementation Study confirmed the Government’s original estimated costings as well as providing for an extremely comprehensive geospatial analysis of the build itself, including importantly the wholesale service cost of around $30 to $35 for a 20 megabits per second entry level service on the National Broadband Network.
So as you can see on this first slide, there’s a series, or a summary of very specific recommendations or outcomes from the Implementation Study.
Please take a moment to read through them because you can see they confirm some of the significant findings of the study.
I think most importantly, is the plan, the coverage and the extent to which the fibre to the premises National Broadband Network will reach.
McKinsey found that not only was it possible to reach 90% of the Australian population with 100 megabits per second fibre to the premises network, but in fact they recommend that we take that to 93%.
They do this using their geospatial analysis of the actual build, and recommend that the costs of that build are viable a little further. 3% more of the population.
Further to that the backhaul investment that is taking place is already underway.
Next Gen, a wholly owned company by Leighton Holdings has already started building that backhaul network in blackspots around regional Australia, and you can see a couple of photos here of trenches being dug, the Minister out on the hustings promoting this building as it starts in many of our far flung regions in Australia.
The next slide shows population densities defined by the cost of deployment of the fibre.
This is an important map because it illustrates how sparsley populated Australia is in that whole centre area, and how densley populated we around our coastal regions, particularly on the East coast.
This kind of analysis has been absolutely necessary to refine those costings as defined in the Implementation Study report.
With the 93% recommendation by McKinsey, that leaves 7%. McKinsey go further to recommend that the next 3% be covered by terrestrial wireless network, and then the final 4% by satellite but under the new KA band when that’s deployed in a couple of years time.
As people are probably aware, the Government has foreshadowed a build over a period of 8 years, and progress to date has been very positive. Particularly in our Southern island state of Tasmania, where the rollout started far earlier.
In Tasmania there are three communities already where the backhaul has been completed and they’re going to stage two of the detailed rollout of fibre to premises in those three communities with faster rollouts programmed over the next little while.
Work is continuining in the planning of stage two rollout which targets seven more locations.
On the 1st of March of this year, the Government announced it would make a further equity injection into the NBN rollout in Tasmania of $100 million, and this will facilitate further rollout of fibre to the home across the state.
This is stage three of the NBN rollout, and will extend the delivery to 90,000 premises in Tasmania in the major population centres of Hobart, Launceston, Davenport and Burnie.
In addition in Tasmania, in fact it was in March this year that the Minister officially opened the Mornington proof of concept test centre and announced the first retail service providers who will work with NBN Tasmania to deliver the broadband services, and they’re Australian ISPs Primus, Internode and iiNet.
As I mentioned before the Rudd Government has also signed an agreement with NextGen Networks to construct new regional backbone links.
This backhaul investment includes $250 million of the Regional Backbone Blackspot Program, and is delivering the first building blocks of the NBN to the mainland.
It will benefit around 400,000 people in more than 100 regional locations.
In total this program will see some 6000 kilometres of regional backhaul network laid, with 600 kilometres completed already.
As I mentioned the first release sites on the mainland include suburban areas in Queensland, Victoria, the city of Melbourne, country New South Wales, a rural community in South Australia and coastal communities around Wollongong.
One of the important aspects of the McKinsey Implementation Study report is that they identified the wholesale access price of around $30 to $35 for the entry level 20 megabits per second service. This is terrific news.
I’d also like to report back on some of the short and long term financial issues.
In this years budget, importantly the Federal Government issued the first round of Aussie infrastructure bonds to start to raise the capital needed for the National Broadband Network.
$300 million dollars worth of Aussie infrastructure bonds will be released over the next financial year. The Government hasn’t determined yet whether household investors will be able to purchase these bonds and considering is being given to this at the moment.
Other investments that the Government has made in this year’s budget – and remember it’s on top of original budget allocation of $4.7 billion dollars in last years budget – included an additional $15 million for the Department of Broadband, Communications and the Digital Economy, $15 million for 4 years for continued support for the implementation of the National Broadband Network.
This money will go towards funding policy and regulatory support for the rollout, and importantly, $24 million to the Australian Competition and Consumer Commission (ACCC) as the independent regulator of the National Broadband Network. $24 million over the next 5 years has been allocated.
This issue of independent regulation of the National Broadband Network is obviously central to the policy model we’ve proposed here in Australia for the National Broadband Network. It is a wholesale only, open access network. The network itself will be independently regulated by the ACCC as I said and we currently have legislation before the Australian Parliament which codefies and formalises what that independent regulatory framework will look like.
The bill is titled “Competition and Consumer Legislation Amendment Bill 2010″ and it’s due to be debated in the Upper House of the Australian Parliament in the coming weeks.
I think importantly for the overarching financial implications for the Australian tax payer, given this is a publicly funded investment, the peak estimated investment by Government McKinsey has at $26 billion by the end of year 7, of which $18.3 billion will be required over the 4 years.
This is an important figure because it represents as I said the peak Government investment. McKinsey expect that the NBN company will be able to reinvest its returns to continue to capital rollout.
Finally it’s important to stress the benefits of our fibre to the premises National Broadband Network.
Not only will the network be able to provide guarenteed speeds, none of this “up to” of ADSL, these will be guaranteed speeds. So if you buy a 20 megabits per second service, that’s what you will get on this fibre network.
Importantly for health, for education, for the community sector and for business, this economic infrastructure is an investment by the government for the long term.
In summary it’s really gratifying for me to be able to sit here and say to you that the Implementation Study has confirmed all the major assumptions that underpinned the Government policy.
Particularly in the aspects of the reach of the network and the expected costs of the network.
This demonstrated that not only is this proposal completely viable, but with the rollout already started, we’re starting to get a really good feel for the sort of returns we can expect from the National Broadband Network.
It is economic infrastructure, it’s an appropriate way in which the Government can invest in the future of our economy, both economically and socially and I’m really pleased to have been able to share these details of our progress with you today.
