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news The NBN company has given a Newcastle business an estimate ranging up to $9,500 to extend fibre cables 300 metres from the local streetside ‘node’ through existing Telstra pipes to their facility in the Newcastle CBD, as signals continue to grow that the Coalition’s election estimates on fibre on demand costs were inaccurate.

During the Federal Election campaign in 2013, one of the features of the Coalition’s alternative National Broadband Network vision was the idea that customers on the NBN could pay to have fibre extended all the way to their property.

This framework — known as ‘fibre extensions’ or ‘fibre on demand’ — was highlighted by then-Shadow Communications Minister Malcolm Turnbull as a way for consumers and businesses to use a ‘user pays’ mechanism to get around the limitations of the Fibre to the Node platform which Turnbull planned to impose on the NBN.

The original version of the NBN as envisioned by the previous Labor Government called for most Australian premises to be covered by a full Fibre to the Premises rollout, with the remainder to be covered by satellite and fixed wireless technology. However, under the Coalition’s model has seen the company focus on Fibre to the Node technology, where fibre is only extended to street side cabinets and the existing Telstra copper cable used for the rest of the distance to customers’ premises. Legacy HFC cable networks are also being extended and upgraded.

Before the election, Labor had claimed that the cost of Turnbull’s Fibre on Demand policy option could be as high as $5,000 per premise, based on the fact that it represented the upper end of estimates by British telco BT, which provides a similar service in the UK.

However, over the past several months, Delimiter has seen a number of examples where NBN customers have been provided with cost estimates ranging even higher for the fibre on demand service.

In one example, a business in the Newcastle CBD has been quoted between $6,500 and $9,500 by the NBN company to extend the FTTN network in the area to the customers’ premises. These figures do not include GST; once the tax is included they would rise to between $7,150 and $10,450.

The cost of the extension appears to be exorbitant, with the customer’s premises only being 300 metres from the nearby ‘node’ and Telstra already having given the NBN company access to its underground ‘pits and pipes’ in the Newcastle CBD.

The NBN company has not provided the customer with detailed documentation outlining the proposed network expansion, despite the fact that the customer was forced to pay a $330 fee for the estimate.

The cost appears to run directly contrary to the costs and access that Turnbull pledged during the 2013 election campaign.

For example, in a post on his website at the time, the Member for Wentworth stated that areas such as central business districts would actually receive full fibre rollouts. “Note that under our plan greenfield estates, business districts, schools, hospitals, universities and anywhere that fibre is commercially justifiable will be connected to fibre,” the site states. “FTTN is primarily a solution for cost effective service in residential areas.”

In addition, in July 2013, shortly before the election in September, Turnbull explicitly rejected claims made by Labor at the time that the cost of fibre on demand could be as much as $5,000.

In response, Turnbull stated on Sky News: “Well we haven’t set a rate for it but I can tell you that the typical distance from one of these nodes, the average distance would be around 500 metres. And I can only give you the example from the UK the cost of getting fibre on demand is around £1500 which I think would work out at around $3000. So it is not $5000.”

In a separate post on his website, Turnbull states:

“For a customer living 500 metres from a node, for example, the charge is GBP1500 or about $2,250.”

opinion/analysis

Wow. Up to ten and a half grand for the NBN company to merely run a couple of fibre cables 300 metres through Telstra pits and pipes that they already have access to, in the Newcastle CBD. That’s nice work if you can get it … surely this wouldn’t take a couple of technicians more than a couple of hours to get done.

Sounds like price gouging to me — to customers who were promised by Turnbull that they would get FTTP for free, being in a major city’s central business district.

But more to the point, we now have conclusive evidence that the cost estimates raised by Turnbull and other figures in the Coalition about the NBN company’s planned fibre on demand service were patently false.

At the time, the Member for Wentworth quoted a guesstimate of about $3,000 for a 500 metre fibre extension. “It is not $5,000,” he said.

Three years later, the real cost has been revealed. At least Turnbull was right about one thing — the cost is nowhere near $5,000. It could actually be double that.