Full fibre NBN deployment costs artificially inflated: NBN Co critic

The cost of rolling out a fibre-to-the-premises (FTTP) NBN may not be as egregious as that posited by the Coalition government and NBN Co, with Universty of Melbourne’s emeritus professor Rod Tucker saying that the latest costings for an all FTTP deployment leave out some crucial details.

Speaking at the Conference on Optical Fiber Communications in Los Angeles last week, Professor Tucker said that the claim in the latest strategic review that FTTP deployment would cost $4300 per household is artificially inflated.

“The figure of $4300 recently quoted by NBN Co for rolling out fibre to each premises is high because NBN Co has not implemented many of the cost-savings methods identified in the 2012 Corporate Plan and the 2013 Strategic Review,” Professor Tucker said.

He added that the $4300 per premise cost now also includes duct lease payments and other labour costs as capital expenditure rather than operational expenditure as was done previously, under the Labor government.

The $4300 per premise figure is significantly higher than the $2500 per premise costs stated in the last NBN Co Corporate Plan issued by the Labor government. It’s also higher than the $2450 per premise costs included in Scenario 2 of the Strategic Review of the NBN carried by the Coalition government.

The falling deployment cost for a full-fibre NBN rollout, according to Professor Tucker, is a direct result of the construction and cost efficiency measures developed during the early stages of the FTTP rollout.

“Significantly, most of these cost savings were also included in the Strategic Review,” he said.

“The estimated cost of rolling out FTTP, incorporating these cost-savings measures was redacted from the Strategic Review, but at a recent Senate Select Committee meeting it emerged that the redacted number in the Strategic Review can be calculated to be about $2450.”

A cycle of misinformation

Professor Tucker, a fierce critic of the Coalition’s multi-technology NBN, was a member of a government-appointed expert panel that recommended a FTTP pathway to the Labor government.

An avid proponent of fibre-to-the-home technology, Professor Tucker has long lamented the failure by those in the technical community and the previous Labor government to fully articulate the rationale behind why an ambitious full-fibre NBN was the better option in the long-run.

Speaking at the International Conference on Communications, held by global standards body IEEE, in June last year, Professor Tucker said that the technical debate on the merits of fibre had unfortunately been clouded by politics and misinformation.

He has echoed a similar sentiment this time around, telling those gathered in the event last week, that the inflated FTTP deployment cost claims further entrench the cycle of misinformation.

“An apparent inflation of the roll-out cost from AU$2500 to AU$4300 is bound to cause confusion among the press and the public,” he said.

“For example, a recent article in a Fairfax newspaper (SMH, Feb. 25, 2012) claims the cost of FTTP has almost doubled. This leads us back into the old cycle of incorrect claims that Labor grossly under-stated the costs of FTTP.”