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Quigley: FTTP wasn't a failed project

But unscrambling this egg will be painful

Founding NBN CEO Mike Quigley has given a speech defending both his legacy and the original fibre-to-the-premises network plan.

The speech, given to Melbourne University's Networked Society Institute and the Telecommunications Society, is most notable for the extensive detail Quigley provides to support his case.

Posted here, the transcript runs to 32 pages (including slices), and it's close to 9,000 words of detail that's impossible to compress into a news story.

There are, however, important points Quigley makes beyond the political.

The first is this: the popular belief that the fibre rollout was a failure was mistaken. Not only was the rollout beginning to ramp up when the switch was thrown to fibre-to-the-node, the rate of installations continued to improve, and fibre now makes up the vast majority of connections.

Quigley's presentation includes the slide below, illustrating the ramp-up.

Quigley presentation

That failed technology: fibre dominates the NBN

The second is that Quigley firmly believes the build was achievable within reasonably close to its AU$43 billion budget, and here arises Quigley's most political statement in the speech:

“If I am right on the FTTP peak funding costs, and I intend to demonstrate that I am, then the move to the MTM has been a colossal mistake.”

His contention is that the old model (FTTP for most premises connections) and the new MTM model are, behind that last mile, identical in most respects.

They use the same transit network, the same fixed wireless network (with some adjustments in the new model), the same two satellites, the same FTTP in greenfields, and largely the same IT systems.

In other words, any difference in price between the FTTP NBN and the MTM NBN must exist in the last mile network.

Quigley's argument here is threefold:

  • Capex in the FTTP was within the funding envelope and, on a per-connection basis, was declining;
  • Overseas experience showed that during rollouts, FTTP network costs fall (Chorus in NZ reported a 29 per cent cost saving in a year; Verizon reported a 38 per cent saving over three years); and
  • The FTTP peak funding was likely to be protected by user revenue, with ARPU reaching $43 per month by December 2015, so long as user take-up remained on-track.

+Comment: No matter who wins the July 2 election, the MTM egg isn't going to be unscrambled.

There's a good reason the ALP is only offering fibre where alternative builds haven't started: to try and contain the network costs.

Quigley points out “an estimate done for the August 2015 Corporate Plan by the NBN company. It gave the range for the FTTP based NBN as $74 - $84Bn.

“Now most people would have thought that the NBN Company should know what they are talking about and this really must have been how much the original FTTP based NBN would have cost if it had continued.

“However, as it emerged at one of the Senate Committees, that is not what the NBN Company was asked to cost.

“They were asked to cost a change back to the FTTP plan after a delay of a few years and after many billions of dollars had already been committed and spent on the MTM.”

That $74 billion-plus “change back” estimate is the reason the ALP policy disappoints those wishing for fibre everywhere. ®

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