Tuesday, 6 December 2011

An Open Secret

Back in November 28, 2011, the oo ran with the 'breaking' story
CAPITAL spending on the National Broadband Network will top $50 billion and slower-than-expected development of digital video content could put at risk the financial returns for the ultra-fast network, a confidential report to Labor states
 The full report by Greenhill Caliburn, obtained under Freedom of Information, also reveals that $50.6bn in capex would have been spent on the network by 2028.
Trouble is, although the oo may well have found this in a report they did indeed obtain from under FOI, these same figures have been available on the NBN's own website in their Corporate Plan 2011 - 2013 for over a year for anybody who was prepared to look, like, you know, a journalist perhaps. So, no, this is not some figure trying to be hidden away by the Government, it is a figure which was released over a year ago, and has been in the public domain all that time.

The other interesting thing to note is the 2028 date, which they then compare to the 2020 date which is when the NBN is projected to be 'completed'.
That is dramatically higher than the $35.9bn in capital costs to build the project by December 2020 that is usually cited by Labor.
Well, duh, did they truly expect the outlay for a national network to cease completely in 2020? The 2020 date is for the NBN to cover all existing areas. By 2028, there are sure to be many more areas requiring coverage, as the NBN grows with the nation. The other minor point they have glossed over is that this additional capex will be mostly funded from profits, meaning not an actual outlay from the taxpayer. In fact, by then, it is highly likely that the taxpayer will already be seeing money start to flow back in. Of course, this is dependant upon many factors, including the development of digital video content. But, for anybody who has followed Information Technology advancements, they have historically advanced much faster than projected, rarely any slower.

What is more interesting now is how this $50 Billion figure has now entered the lexicon of the murdoch press to drag out whenever they need to spread their fear. Take this piece of junk from the the Telegraph
Gunnedah high speed Wi-Fi internet works as leaked reports reveal NBN cost could blow out to $50b
Well, for starters, as we have just seen, the $50b is NOT a blow out, it is the initial projection. Secondly, in this little beauty, they go on to compare the cost of a National Network with the cost of a localised upgrade, which is covering only the main street (admirable as that is)
IT walks like the NBN, talks like the NBN - but is about $40 billion cheaper.
Are they implying that it is going to cost around $10b to cover a main street in WiFi?
Meanwhile, the actual  council have revealed that the are not concerned about the NBN roll-out. In fact, in iTWire they highlight that, once it arrives at their town, they will in fact most probably become customer for the NBN.
Meanwhile NBN Co is promising to have completed by 2015 its TD-LTE network delivering broadband access at 12Mbps to four of the seven percent of premises beyond its FTTH rollout. This however does not faze Peach. He told ExchangeDaily: "It is possible this could undermine our business case, but that is a commercial risk we thought was worth taking…At the end of the day we are a retailer and NBN Co is a wholesaler. We could become an NBN retailer… [But] If the NBN was going to be her tomorrow or next year our view might have been different."
I also think that the residents of Gunnedah might well be looking forward to the NBN arriving, so that they are able to have a similar system to that being offered to the businesses there.

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