Coalition unveils $20 billion NBN alternative

The Coalition has announced its long-awaited broadband policy today, with Opposition Leader Tony Abbott and communication spokesperson Malcolm Turnbull confirming a $20 billion plan which is scheduled to finish two years earlier than the National Broadband Network.

The plan will differ from Turnbull’s previous promise to dismantle the NBN once the Coalition gains power. Instead, this plan will focus on connecting fibre optic cables to common “nodes”, rather than individual homes.

The announcement was made at a press conference this afternoon. Tony Abbott said the Coalition would be able to deliver broadband faster than Labor’s alternative. 

“We obviously don’t have access to all of NBN Co’s books but we’ve made very conservative assumptions, both about our plans and [NBN Co’s],” Turnbull told the ABC this morning.

The Coalition plan will roll out fibre optic cables to nodes. These nodes will then connect to individual homes using copper cables.

While this is much cheaper and quicker to complete – the Coalition has the plan costed at $29 billion including $20 billion of capital expenditure compared to the NBN’s $37 billion – it is slower.

The NBN will provide users access of speeds up to 100 megabits per second but the Coalition’s will provide just 25 megabits per second.

“[25 megabits per second] will enable anybody in residential situations to do everything they want to do or need to do in terms of applications and services, and is six times faster than the average speed people are getting right now,” Turnbull told the ABC.

Abbott repeated that claim this afternoon, saying he is confident 25 megabits per second will be “more than enough” for the average household. 

The Coalition plan would be finished by 2019, he says, two years before the NBN is scheduled to complete.

NBN Co chief executive Mike Quigley also told the ABC while such a plan would be cheaper, it would require more infrastructure up-keep due to the ageing nature of copper wires.

“…you’re using much more sophisticated… technology to try and get the very best performance you can out of that copper which is an ageing asset,” Quigley said.

The cheaper cost and faster roll-out of the Coalition plan could be a roadblock for the NBN, which has suffered a number of reputation blows in the past few weeks. Just last week, the Australian Competition and Consumer Commission rejected the network’s pricing plan.

However, it also contradicts the Coalition’s previous claims it would stop the NBN in its tracks once it wins power.

But one expert says the issue isn’t so much how the network is built, but rather Telstra’s involvement.

The government has spent billions crafting an agreement with Telstra for buying its infrastructure. Any shift in that agreement would cause payouts to Telstra, and be considerably difficult to navigate politically.

“It’s essential in getting a hold on that copper network,” says independent telecommunications analyst Chris Coughlan.

“The Coalition also needs to determine whether it has agreements in place with Telstra. That could be a slow process.”

However, a report from The Australian Financial Review suggests the Coalition would negotiate to purchase more copper from Telstra, and keep its structural separation intact.

New housing estates would also use fibre-to-the-home under the Coalition scheme, the report claims.

A spokesperson for Malcolm Turnbull was contacted this morning, but was not available before publication. Telstra was also contacted, but was not available before publication.

Coughlan says any plan will need to have Telstra at its core.

“That’s going to be the critical point in delivering on that plan,” he says.