Finance Finance News NBN customers will soon be forced to pay for upgrades

NBN customers will soon be forced to pay for upgrades

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AI and virtual reality are revolutionising the way we are taught – and the skills we need. Photo: Getty
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NBN fibre-to-the-node (FTTN) customers will have to “pay for the Coalition’s mistake” by upgrading their network in as soon as five years to access new technology such as virtual reality.

Fibre-to-the-premises (FTTP), which the NBN has pegged as an upgrade option, had been planned for more than 90 per cent of homes under the Rudd Labor government’s initial NBN proposal.

Emeritus Professor Rod Tucker, who was part of a panel of experts that advised the Rudd government to adopt an FTTP-based NBN strategy, told The New Daily the Coalition’s decision to replace his suggestion with a network primarily using fibre-to-the-node was a “disaster for Australia … ill-informed and short-sighted”.

Mr Tucker said network upgrades will cost customers about $1000 to $5000 per household to upgrade to fibre-to-the-curb (FTTdp) or FTTP.

“It’s not fair that end customers have to pay for the Coalition’s mistake,” Professor Tucker said.

“The Coalition has repeatedly argued that a FTTN network is preferable to a FTTP network because it costs less to install, but there have been substantial reductions in the cost of rolling out FTTP.

“When this is combined with the increased revenues that NBN might have achieved with more attractive service offerings, the cost differences would not have been that large.”

The former director of the Institute for a Broadband-Enabled Society said recent data revealed there has been a decline in the use of fibre-to-the-node worldwide, while fibre-to-the-premises doubled between Q1 2015 and Q1 2016.

Professor Tucker said that for many small businesses relying on data, the fibre-to-the-node network was “already obsolete”.

“Many, many countries throughout Asia and Europe use FTTP, and so does New Zealand. FTTP is the ultimate solution.”

This follows NBN chief executive Bill Morrow’s admission at a Senate Estimates hearing on Tuesday that fibre-to-the-node customers may need to upgrade their service in as soon as two years after the NBN rollout is forecast to be completed in 2020.

“When we see that people are willing to pay more than what they are paying today for 25 Mbps, then we will build a business case [for an upgrade],” he said.

“You have to be willing to pay above what you are willing to pay today.”

NBN spokeswoman Philippa Perry said customers could already pay for a fibre-to-the-premises upgrade.

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NBN chief Bill Morrow admitted FTTN customers will need to foot the bill for upgrades.

We are also currently trialling G.Fast technology and rolling out FTTC [also FTTdp] to 700,000 premises,” she said.

“When there is more demand for faster speeds – and with 80 per cent of end users on 25Mbps or less, we argue there currently is not – then there may be other upgrade paths available.”

Internet Australia CEO Laurie Patton said he interpreted NBN chief Mr Morrow’s comments to mean that the NBN did not have a budget to fund the upgrades to fibre-to-the-node connections.

“As far as I’m concerned there is no upgrade path for FTTN. You rip it all out and start again with FTTdp. That’s a replacement not an upgrade,” Mr Patton said.

“When they inevitably dump FTTN and go with FTTdp, all the costly nodes – the big cabinets in the streets – will have to be ripped out and taken away. Likewise, they will have spent money providing the nodes with electrical power that will no longer be required and will also have to be pulled out.

“So why continue to roll out inferior technology that they know will need to be replaced?”

A spokeswoman for Communications Minister Mitch Fifield told The New Daily that Labor’s original fibre-to-the-premises NBN policy would have cost $30 billion more and taken six to eight years longer to complete.

A FTTP NBN would have pushed up a typical home internet bill by up to an extra $43 a month, or more than $500 a year,” she said.

The spokeswoman said Mr Morrow meant that if customers chose to take up virtual reality and ultra HD TV, then it would be their choice to pay for greater data and speed.

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