When asked where the NBN's builder and operator, NBN Co, would find the balance, however, he said the government might either lend its AAA credit rating to the NBN, or raise debt for the project directly. "We are talking with NBN about how it will access debt funding," Turnbull said, adding that options included NBN Co borrowing in its own right, borrowing with the backing of the government, or the government borrowing money directly. NBN Co's new corporate plan suggests government support of some kind will be needed. A strategic review of the project that NBN Co pulled together in six weeks after the Coalition's election win in September 2013, estimated the Coalition's hybrid, multi-technology network would have a peak funding cost of $41 billion, and generate a return on investment of 5.3 per cent. Those findings were used to justify the switch to the hybrid, multi-technology mix the Coalition favoured when in opposition, and they are now history, with the new corporate plan estimating a cost of $46 billion to $56 billion, a "base" cost of $49 billion, and a return on investment of just 3.5 per cent.

It is questionable whether NBN Co is capable of borrowing up to $26.5 billion in its own right to fund a project that offers such a skinny return, particularly when the new corporate plan states there are many variables that could have an impact on costs, revenue and timing. Innovative funding techniques, including the introduction of private equity, are likely to be considered. However, debt will be the main source of funding for the project beyond the $29.5 billion of equity the government is contributing – and with the government able to borrow 10-year money at a rate of about 2.5 per cent, project costs will be lower and returns higher if NBN Co borrows backed by a government guarantee, or the government borrows for the project directly. The cap that the government says it has imposed on its own exposure to the project is a complication. Its investment in NBN Co rose 57 per cent from $8.42 billion to $13.2 billion in the year to June 30. It is capped at $29.5 billion but a guarantee for NBN Co borrowings or direct borrowing for the project would create new exposure. It would also make it more difficult for the government to do what Labor did, and treat the project as an investment in the budget papers instead of an outlay. Was the switch from Labor's full-fibre-to-the-home project worth it? It's a discussion the government isn't interested in having, and it has tried to put a lid on it by asking NBN Co to again reassess how much Labor's plan would have cost. When it did its rapid strategic review after the Coalition's election, NBN Co estimated Labor's fibre-to-the-home network would have cost $73 billion if it had gone ahead, much more than a previous estimate of $44 billion.

Its new corporate plan puts a cost range of $74 billion to $84 billion on Labor's ditched network. Labor's NBN would also have been completed by 2026 and possibly as late as 2028, six to eight years later than the multi-technology network that is being rolled out, NBN Co says. A significant part of the new cost blowout for the government's project is tied to the multi-technology mix, however, or to the correction of estimates in the rushed 2013 strategic review that justified the switch to the multi-technology model. A slower-than-expected introduction of hybrid fibre cable (HFC) already laid by Telstra and Optus adds about $1 billion to the cost. The cost of rolling the network out is cut by the decision to scale back fibre to the home and load in HFC and fibre to the neighbourhood node. Operating costs, information technology and maintenance costs rise, however, because the hybrid network is more complex, and made up in part of high-maintenance Telstra copper wire. Another $3 billion is also added to the cost of the rollout compared with the strategic review's estimate in 2013 because the review assumed fibre-to-the-neighbourhood node connections would cost as much as similar connections in the northern hemisphere, where population density is greater, and cost per connection lower.

Loading Overall, there's enough in the new report for Labor to renew its criticism of the Coalition's decision to axe the full-fibre-to-the-home project. Turnbull argues, however, that the new numbers represent the first realistic assessment of how much a broadband network costs in Australia, a country with a relatively low population, and great distances to cover.