NBN progress on track and best option for Aust: Quigley

13/08/2012 - The head of the National Broadband Network (NBN Co) insists the project is on track and is the best option for providing high-speed internet to a country as large as Australia. Greg Roberts

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Government-owned NBN Co chief executive Mike Quigley last week confirmed a nine-month delay to the roll-out of the network, a 3.9 per cent, or $1.4 billion increase in capital costs to $37.4 billion and a $3.2 billion surge in operating expenditure.

Federal Liberal MP and former Optus executive Paul Fletcher said Quigley would have been sacked if he worked for the private sector rather than a monopoly utility.

Quigley conceded on Sunday that NBN Co had underestimated time and costs needed for compensation deals with telcos Telstra and Optus for using their assets and the migration of their customers to the network.

"I will absolutely say some things we underestimated in our original December 2010 corporate plan. There's some things we overestimated," he said on ABC TV's Inside Business.

"Those largely balance out."

The cost blow-outs also include an extra $1.5 billion because of Quigley's decision to connect every household as it rolls out the network — whether they want the service or not — which he calls "build drops".

He rejected criticism saying while it was a more expensive investment now that would ultimately save money because it was a 30-year project.

"It's a bit like putting some solar heating on your roof," he said.

"There's an upfront cost, but then you're going to gain that in lower electricity bills over the long term."

The company says that after its big up-front investment, operating costs will be low and profit margins will be up to 70 per cent, but Quigley says profit will not be its main objective.

"We'll be a heavily regulated monopoly utility and the reason for that is, most people would agree, that's the most efficient way to build a fixed line network in a country, a big big country such as Australia where you want uniform wholesale pricing."

The federal opposition says if it is elected next year it would either stop the project or radically change it through using different and cheaper fibre to the node technology.

"Of course it's always possible to change direction," Quigley said.

"It's possible to stop things as they are running today so that's possible."

The NBN aims to provide internet speeds of up to 100 megabits (mbps) per second to 93 per cent of the population, with current average speeds barely 3 mbps.

Broadband internet in Australia is slower and more expensive than in most industrialised nations.

Source: AAP

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Have your say...

Tim | 13/08/2012 11:08 1

One thing stops me from voting Liberal and that is their stupid, uninformed, opposition to the NBN. Yes, large cost upfront but the ongoing positive impact it would have on business, community, and services would be immeasurable. The way we do business is changing, guys. If you are too old to understand and accept it, move over and let younger people step up to the plate.

Goldie | 13/08/2012 18:46 2

Not a bright idea to use solar as an example of future investment benfits as governments at state level are closing down schemes or severely limiting them as they begin to impact their own power generation profits. The NBN like the carbon tax wil get a haircut next year when the current batch of dictatorial socialists are shown the door. Who can believe anything people say on the NBN as they all have conflicts of interest.

dave d | 15/08/2012 11:26 3

There appears to be a common theme with this - "if you say it often enough you'll start to believe it yourself" - is this why Quigley keeps repeating himself ? Oh and by the way Tim ,I gather the "business, community, and services" you talk about are the ones that may or may not survive under this current government you vote for - get your head out of the computer and look at the real issues happening around you !!

Tim | 15/08/2012 12:33 4

I'm over 50, have lived in country NSW and metro Sydney. Worked from being Stop-Go-Man to high end pre-press and internet services, plus more. My view from the mountain-top DaveD, is that a very, very broad spectrum of the community will benefit from NBN implementation. Our country towns are dying, any attempt to bring them into the main "highway" of communication (and therefore trade/medical services/etc) is welcome. I am of no real political persuasion DaveD I think that they are all of the same ilk - just dressed up in different suits and in my view, quite pathetic. Would a real leader stand up for Australia please? Oh, and DaveD don't dare reply online, the internet was produced by "geek" visionaries who enabled you to speak your mind. Cheers.

dave d | 15/08/2012 14:28 5

Tim agree about the politicians being of the same ilk -my point was there are people that are more concerned with getting a project like this up and running rather than being concerned with the current issues of Businesses & Industries in danger of "going under" & will they still be around to use this facility when it is finalised.

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