Government shifts Australia’s National Broadband Network away from FTTH

As expected after a coalition led by the Liberal National Party won control of the national government in last September’s general elections, Australia’s Minister for Communications Malcolm Turnbull and Minister for Finance Mathias Cormann have instructed the company responsible for construction of the country’s National Broadband Network to switch the program’s fixed-line technology emphasis from fiber to the premises (FTTP) to a mix of approaches. The change will include the use of fiber to the node (FTTN) rather than FTTP in most instances.

The ministers informed NBN Co of the change in policy via a letter sent April 8. The new direction comes before the completion of a cost/benefit analysis; Turnbull had criticized the former Labor-led government for settling upon the FTTP-centric approach in 2009 without completing such an analysis themselves (see “Australian PM: We'll do broadband build ourselves”).

Turnbull had ordered a full review of the program last year; the new NBN Co board released a final version of the review last December. The review showed the program to be 3.5 years behind schedule and likely to cost a total of AUS$73 billion, about AUS$29 billion more than estimated in the project’s Corporate Plan.

The new strategy will focus on a “multi-technology mix” for the fixed portions of the network that Turnbull described in a speech last December as comprising 26% FTTP, 44% FTTN, and 30% upgraded hybrid fiber/coax (HFC) infrastructure. This approach will decrease the total cost of the project to AUS$41 billion, Turnbull asserted in his speech. The rollout would be completed by 2020, he added.

In the recent directive to NBN Co, the ministers said the fixed-line portion of the network should be capable of providing download rates of at least 25 Mbps (and “proportional upload rates”) to all premises when the project is completed and download rates of at least 50 Mbps to 90% of fixed-access subscribers “as soon as possible.” The original FTTP-based plan had called for delivery of 100-Mbps speeds. Nevertheless, NBN Co has been tasked with assembling a new Corporate Plan that reflects the change in strategy.

The switch puts the NBN equipment supplier roster in flux. Alcatel-Lucent won a contract in 2010 to supply GPON platforms for the roll out (see “Alcatel-Lucent to supply GPON gear for Australia’s National Broadband Network”). As the company’s ISAM platforms support FTTN as well as FTTP, including VDSL2 vectoring, Alcatel-Lucent is likely to argue that it should remain the main broadband equipment supplier.

A similar review of the wireless portions of the NBN project is ongoing.

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