NBN two years on: Key milestones so far

As it reaches the second anniversary of the announcement of the National Broadband Network, Computerworld Australia looks back through time to the key milestones of the NBN so far, to provide a reminder of how far the network has come.

7 April, 2009 - National Broadband Network announced

The Federal Government announces the National Broadband Network (NBN), a $43 billion project aimed at delivering fibre-to-the-home technology to 90 per cent of Australian premises and guaranteed bandwidth speeds of 100 megabits per second (Mbps), with fixed wireless and satellite technologies covering the last ten per cent of the population.

The network is set to be run by NBN Co, a wholesale-only government business enterprise charged with building, maintaining and onselling the network. Then Prime Minister Kevin Rudd claims the network would provide 25,000 jobs every year during the eight-year build of the network and will add $37 billion to the GDP.

ISPs praise the announcement, which replaces NBN Mark I, a $4.7 billion fibre-to-the-node network initially planned for construction by private parties. None of the tenders submitted to government during 2008 were deemed suitable.

23 April, 2009 - Regional Broadband Blackspot Program announced

Complementing the revamped NBN plan is a $250 million program to roll out up to 6000 kilometres of fibre between those Australian regional centres deemed blackspots. The tender is ultimately awarded to Leighton Holdings subsidiary Nextgen networks.

At the time of the NBN announcement’s two-year anniversary, the program is past the halfway mark with fibre backhaul completed to Geraldton in Western Australia and Victor Harbor in South Australia. Fibre rollout to Broken Hill, Darwin and Emerald are also underway.

As well as the NBN, global projects such as the Square Kilometre Array telescope initiative are set to benefit from the project.

16 July, 2009 - Tasmania gains first looks at NBN

Federal and state governments establish Tasmanian NBN Co (TNBN Co), a joint venture between NBN Co and state-government owned utility Aurora Energy to build and maintain the Tasmanian leg of the NBN as a first test site of the wider national project, aimed primarily at providing fibre services to 200,000 premises on the island.

The joint venture with Aurora Energy is ultimately canned in favour of a wholly owned Tasmanian subsidiary under NBN Co.

27 July, 2009 - Quigley gets his share

NBN Co is officially born with its first employee, former Alcatel chief operating officer Mike Quigley, getting the head honcho role at the network wholesaler. Quigley is shortly followed by former Alcatel colleague Jean-Pascal Beaufret as chief financial officer, as well as compatriots from the likes of Telstra, Qantas, Optus, AAPT and notably, former Queensland politician Mike Kaiser in the $450,000-a-year government relations role.

15 September, 2009 - Government begins legislative trek

Communications minister, Senator Stephen Conroy, introduces the first of several pieces of legislation to Parliament surrounding the structure and operations of an Australian telecommunications sector under the NBN. The first bill is aimed squarely at what many have claimed was the entire motive of the national network: Separating Telstra. The bill would undergo intense argument from both sides of politics and would ultimately face countless delays that forced eventual passing of the bill back more than a year.

Under the final legislation, which would be amended multiple times to satisfy the incumbent telco and other contractual arrangements, Telstra would be forced to structurally separate its wholesale and retail arms, removing its monopoly on the telco market and forcing a cultural change within the company championed by chief executive, David Thodey.

21 October, 2009 - Second Tasmanian sites revealed

The Federal Government reveals a second set of sites to be constructed in Tasmania as part of testing under the NBN. The seven new locations would also receive fibre technology and guaranteed speeds of 100Mbps, but on its two-year anniversary - and despite claimed successes at the first round of sites - construction has gone quiet.

Next: 2010

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1 March, 2010 - NBN creeps onto mainland

NBN Co reveals the first five sites on the Australian mainland to receive fibre-to-the-home connections, following an extension of the Tasmanian build to reach a third stage of release sites. The sites, each covering a rough area of 3000 premises each, would be constructed by five different companies to test different methods. The first of these sites, Armidale, is expected to go live later in April, 2011 with the remaining four set to switch by June.

The construction sites have hit several snags, however, with head of corporate services, Kevin Brown, confirming some of the sites had gone over budget on a contractual basis.

6 May, 2010 - Government releases implementation study

A $25 million implementation study of the NBN, co-authored by McKinsey & Co and KPMG, is released to the public by Senator Conroy following intense scrutiny over public disclosure of documents. The study is largely positive, but stresses it does not provide a cost-benefit analysis of the project as some had requested, and reveals a public funding peak of $26 billion. This is later reviewed by NBN Co to involve $27 billion of public funding from government with additional funding of approximately $9 billion from debt markets.

20 June, 2010 - NBN Co strikes $11 billion Telstra deal

In what is possibly the biggest milestone in the NBN and wider telco sector to date, NBN Co and Telstra sign a financial heads of agreement that would lead to a full migration of the incumbent telco’s copper and cable broadband customers onto the NBN as it is rolled out and provide NBN Co access to Telstra’s existing infrastructure. The Federal Government also agrees to pay Telstra $2 billion to relieve the telco of its universal service obligations, with plans to erect a USO Co that would provide those same services to the seven per cent of the population not covered by fibre technology.

The agreement would enable a cheaper construction cost at a faster pace for the national network, secure a Telstra agreement for structural separation and ultimately remove much of the copper wiring that had upheld the Australian telco sector for half a century. However, the agreement is yet to be approved by either the competition watchdog or Telstra’s shareholders, with the telco continuing to delay a vote citing the complexities of the arrangements and pending legislation. NBN Co has agreed to delay construction of the second release sites in anticipation of a final agreement.

12 August, 2010 - NBN officially launches in Tasmania

The first three sites to receive the NBN in Tasmania are officially launched, with approximately 4000 premises set to receive speeds over the fibre technology. The Federal Government later boasts the network is built at roughly ten per cent under the $37 million budget assigned to the aspect of the project. A take-up rate of about 15 per cent - some 575 premises - are reported to have signed up for services as of February 2011.

Internode, iiNet and iPrimus were first to offer services at the three sites, with Exetel, Telstra and Aurora Communications later joining.

21 August, 2010 - NBN hangs in the balance

The NBN played a key role in the 2010 Federal election, forming a major part of the Labor party’s continued commitment into a second term and providing a launchpad of attack for Liberal leader, Tony Abbott, and then shadow communications minister, Tony Smith. When an indecisive vote on election day raised prospects of a minority government, the NBN proved crucial to convincing three independent MPs and Greens MP, Adam Bandt, to side with Labor.

Two weeks later, independent MP Tony Windsor famously said: “you do it once, you do it right and you do it with fibre”.

14 September, 2010 - Turnbull appointed shadow comms minister

Former Liberal leader and staunch opponent to the NBN, Malcolm Turnbull, is appointed shadow communications minister in the new Liberal cabinet, providing one of the strongest and most fierce arguments against the NBN. With repeated cries of a cost-benefit analysis and heated arguments within Parliament as the result of a renewed motive to destroy the project, the new Liberal ministry becomes key to delaying and amending legislation.

26 November, 2010 - Telstra separation bill passes

Following year-long debate and numerous delays, the Federal Government passes its much-coveted Telstra separation bill. The bill comes at a cost though, with the government agreeing to demands from independent senator Nick Xenophon to release NBN Co’s 400-page business case, and submit the project to an annual review by a joint parliamentary committee and the Productivity Commission.

20 December, 2010 - NBN business case released

Despite numerous promises by Senator Conroy that the NBN business case would never see the light of day, a three-year corporate plan finally surfaces in the dying days of 2010. Among other things, the business plan confirms a drop in required equity for the project from the initial $43 billion to $35.7 billion, at a minimum wholesale cost of $24 per month for the most basic package on the network.

Numerous questions are left unanswered, however, including the possibility of volume pricing for large telcos (which Quigley later confirms was never considered) and the viability of equal wholesale pricing across fibre, wireless and satellite technologies.

Next: 2011

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17 February, 2011 - NBN Co makes wireless play

In its first move related to the fixed wireless portion of the national network, NBN Co purchases Austar’s remaining spectra holdings at a cost of $120 million. The deal provides the wholesaler with 2.3GHz and 3.4GHz bands of spectrum to roll out fixed wireless access to approximately four per cent of Australian premises but to date, the technology to be used is yet to be determined. Plans from CSIRO to commercialise its own fixed wireless technology are hampered by the spectrum deal, as the Ngara technology is built to work most efficiently off analogue television spectrum in the 600-700MHz frequency bands.

7 March, 2011 - Telstra hedges its bet

Telstra reveals plans to roll out its own fibre network in major cities, should its financial heads of agreement with NBN Co fall through. The announcement casts doubts on the oft-delayed agreement, which would required NBN Co to formalise its own plan B for network construction and costs.

29 March, 2011 - NBN Co incorporated

Following furious debate and an extension of Parliament sitting hours into the Autumn break, the Federal Government secures passage of key bills relating to the operation of NBN Co and access arrangements under the network. Amendments proposed by the Greens, Senator Xenophon and the Liberals open NBN Co up to disclosure under the Freedom of Information Act, and also secure equal wholesale pricing across technologies above the 12Mbps entry package.

Passing of the bills was preceded by proposal of last-minute amendments from the government, prompting fury from the likes of Optus and halting negotiations around specific aspects of the network.

1 April, 2011 - NBN Co scraps mainland construction tenders

Days after, and in what first seemed like an April Fools’ joke, NBN Co announces it will scrap all 14 bids for construction of the mainland network, citing unacceptable pricing. The $12 billion contract will instead by negotiated in private between NBN Co and rumoured tenderer, Silcar, with head of corporate services, Kevin Brown, hoping to achieve a better outcome out of the closed-door talks.

The new deal, if consummated, would rely more heavily on NBN Co’s agreement with Telstra coming to fruition, as well as more than $2 billion worth of supply chain contracts for network equipment.

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