NBN CBA coverThe fifth of six reports to be completed by the independent panel led by former Victorian Treasury official Michael Vertigan, a cost-benefit analysis released last week, unsurprisingly sided with the approach preferred by Communications Minister Malcolm Turnbull: fibre-to-the-node (FttN) and hybrid fibre-coaxial (HFC) technologies.

The long-awaited cost-benefit analysis explored four possible scenarios:

  1. Labor model: rollout of FttP (fibre to the premises) to 93% of the population
  2. MTM model: multi-technology mix including FttP to 15% of the population and for the remaining 85% a mix of FttN, HFC, fixed wireless and satellite
  3. Fibre to the node (FttN) and HFC to 93% of the population
  4. No more investment in NBN

The panel favoured the second option, MTM, and the biggest selling point appears to be the capacity for later incremental movement to better technology should it develop before the the rollout is complete. These ‘future-proof’ advantages to MTM rest on several assumptions:

  • MTM doesn’t impose prohibitive future costs on those wanting to upgrade technology after rollout
  • The main benefit to be assessed is to households, therefore the oft-cited Alcatel-Lucent report stating the higher level benefits would pay for the FttP rollout isn’t relevant because it focuses on benefits to business and not to households.
  • Benefits to teleworking, productivity and e-health would be equally captured by MTM as FttP because Vertigan panellists argue there are few services that would only function at FttP levels (120Mbps) that couldn’t be delivered at MTM levels (60-80Mbps)
  • NBN Co would finish rolling out MTM by 2020, sooner than the projected 2024 for FttP.
  • NBN Co would pay bulk, not retail, electricity prices
  • Costs of maintaining the copper network (not specifically enumerated) would remain at levels set out in the strategic review
  • Demand would progress according to Communication Chambers figures, putting the median demand in 2023 at 15Mbps

Where to from here? Turnbull has said that these cost-benefit findings will inform NBN Co’s rollout plan, so the task now will be for stakeholders to make the case for FttP in their area or priority installation of other MTM in the rollout plan.

The Minister is also calling for telco submissions before the end of September on a discussion paper about MAP (migration assurance planning) and the final report by the Vertigan panel, a telecommunications regulatory review, is due out before the end of the year.

For updates about developments in the technology sphere, contact Damian or Petra.