"Perhaps the biggest difference between the two models in terms of impacting end-users is that our Kiwi cousins did not implement a data consumption charge on their network in the same way that NBN did with our Connectivity Virtual Circuit (CVC) charge," Mr Morrow said.

Access charge

"Chorus and the other UFB (ultra-fast broadband) FTTP operators in New Zealand charge their retailers an access charge based on wholesale speed – 50Mbps (megabits per second), 100Mbps or 1Gbps etc – and then that's it, it's over to the operator to deliver those speeds."

Australian retail service providers (RSPs) have two access fees they pay NBN. One is a fixed monthly access circuit charge (AVC), a per-customer charge that varies on which speed tier is chosen, much like New Zealand. The second, and more controversial is the CVC charge which is based on the amount of capacity a provider buys.

RSPs have long argued the whole cost of accessing the NBN is too high and the expense is now hitting margins with more and more consumers rolling over, which is compulsory, to the network.

"Here on NBN we not only charge a wholesale speed-based access charge – our Access Virtual Circuit – but we also charge the CVC at around $14.50/1Mbps in order to generate revenues from retailers who then sell services to the end-users," Mr Morrow said.

"This means that on the NBN end-user experience can be negatively impacted if retailers don't buy sufficient CVC – we are working to address this but it's a crucial difference between here and New Zealand."

To protect profits, RSPs are not purchasing enough capacity to deliver the speeds expected on the NBN and many have called for the business model of the project to be rethought and for the government to take all or at least some of its investment onto the budget, a move the Coalition has ruled out, despite the increasingly tense standoff between RSPs and the NBN.


$50 billion project

CVC accounts for around a third of NBN revenue, and its business model, under both the Coalition and Labor, requires a rate of return on the $50 billion project, which is forcing it to charge RSPs more than what they pay on legacy wholesale networks.

In New Zealand, Chorus is able to earn revenue via charging for access to the already existing legacy infrastructure it owns, such as copper, as it rolls out its FTTP network. In 2011, Chorus won contracts from the New Zealand government for the rollout of its NBN, as a condition it had to split with its retail business, which would ultimately be named Spark, in 2014.

Mr Morrow said already owning the existing assets, ground, pits, ducts and exchanges was a big advantage for Chorus over NBN.

"By contrast, here in Australia, NBN was created as a start-up Government Business Enterprise back in April 2009 – the company had no network assets at all and to this day has to lease or buy these crucial assets from Telstra – something that costs us hundreds of millions of dollars every year," he said.

"Indeed, of the total $4400 it costs us to connect every brownfield FTTP premise, almost $1000 is paid to Telstra in leasing or acquisition costs."