Bill Morrow says Coalition changes made network cheaper and faster to install but more prone to faults

This article is more than 2 years old

This article is more than 2 years old

The national broadband network’s reliance on copper has led to a higher fault rate and slower internet speeds but helped deliver the network faster and cheaper, its outgoing chief executive has said.

In a position paper released on Friday, Bill Morrow is frank about the challenges of fibre-to-the-node (FTTN) technology and use of the copper network, a signature policy of Malcolm Turnbull in his time as communications minister.

Labor’s original design for the NBN planned to deliver fibre-to-the-premises (FTTP) to 93% of Australian homes and businesses, but NBN Co changed course when the Coalition, upon winning government in late 2013, directed it to use a mix of technologies.

• Sign up to receive the top stories in Australia every day at noon

Morrow credits use of the existing copper and pay TV networks with “a faster network build and a lower cost-per-premises”, but adds that it has had consequences, including limitations on the maximum speed when compared with “the previous fibre-based model”.

A third-party review by Vertigan found minimum peak speeds of 15 megabits per second (Mbps) would be “adequate for most households now and into the near future”, and the copper-based FTTN network is “sufficient until the demand exceeded these levels”.

Nationals MP Andrew Broad bemoans rollout of 'faceless' NBN Read more

Morrow said the use of copper in the last 1km of the network has “increased [the] fault rate and operating costs versus the all-fibre alternative”, but added the increased fault rate was “felt to be within reason”.

“These incremental costs are factored into the improved economics and are a small fraction of the incremental costs to build fibre to every home,” he said.

A third consequence of ditching fibre-to-the-premises in favour of a technology mix is a longer co-existence period, where the network uses the same lines as legacy voice and broadband services.

During that period the FTTN network delivers maximum download speeds of 12Mbps and upload speeds of 1Mbps, compared with maximum download speeds of 25Mbps and upload speeds of 5Mbps afterwards.

Pre-existing infrastructure “is sometimes worse than anticipated”, Morrow said, but the solution is a “reasonable trade-off” for the faster rollout and lower cost.

NBN delay to 250,000 households a 'teething problem', minister says Read more

Morrow acknowledges the profitability of NBN Co is being squeezed by retailers seeking to compete on price by using other networks, including mobile services, to better serve end-users.

He states NBN Co charges the same wholesale price for high-density low-cost-to-build areas, which then subsidises low-density high-cost-to-build areas, creating an incentive for retailers to bypass the NBN in high-density areas.

“Our business plan today assumes a healthy amount of competition but some are questioning whether it is enough,” Morrow said.

Still, 74% of households are expected to connect to the NBN, he said.

Earlier this month a report by the telecommunications industry ombudsman revealed complaints about the NBN soared by more than 200% over the last six months of 2017 compared with July to December 2016.

It found there were 22,827 complaints lodged between July and December 2017 about the broadband network, including 14,055 about service quality and 8,757 about delays in establishing an NBN connection.

A spokeswoman for NBN Co said that of the 22,827 complaints about services delivered over the NBN, less than 5% (1,052) were sent to NBN Co to resolve.

Morning mail: WA court action threatens animal export trade Read more

In the position paper Morrow blames customer complaints on the complexity of the build and its unprecedented pace, and also points the finger at retailers. He argues that “we end up with too many, albeit the minority, who are dissatisfied with their experience” in part due to “an often confusing demarcation between responsible parties”.

Morrow said NBN Co is “technology agnostic” and wanted to “get to every Australian as soon as possible at the least possible cost and make sure it has a minimum performance level both now and with upgrades going into the future”.

NBN has also announced 1.5m homes and businesses who are not already connected to FTTN will get new fibre-to-the-kerb technology over the next two years, which is faster because it uses less of the copper network.