Oakeshott: Coalition's NBN may only save $5 billion

Oakeshott says any NBN cost benefit analysis carried out by the Coalition needs to consider the cost of maintaining the existing copper network or it risks coming up with “false figures”.

Independent MP Rob Oakeshott believes based on his own “rough figures”, a Coalition version of the National Broadband Network (NBN) would only be $5 billion cheaper than Labor’s $37.4 billion NBN.

Shadow minister Malcolm Turnbull has consistently stated the Coalition’s NBN could be rolled out faster and cost less.

Oakeshott, who backed the Labor-forming government after the last federal election, citing the party's NBN policy as a key reason, told Computerworld Australia any NBN cost benefit analysis carried out by the Coalition needs to consider the cost of maintaining the existing copper network or it risks coming up with “false figures”.

“My costings, including on the obvious assumption that the copper network will be kept and maintained, are based on industry feedback and various sources. They are full of assumptions though, so I would strongly welcome a cost benefit analysis of the Coalition’s fibre-to-the-node policy,” he says.

“Maintenance costs have to be factored into any capital spend, as does the retention of a parallel copper network.”

In August last year, BIS Shrapnel calculated maintenance costs for the copper network could total $700 million per year.

Adrian Hart, senior manager at BIS Shrapnel, said maintenance costs of the copper network could add up to $1 billion per year.

“The maintenance of the copper network, alongside rolling out fibre-to-the-node, really only makes this [a] single figure [saving], in my estimation, [of] about $5-6 billion difference between the two policies,” Oakeshott says.

“[The Coalition is] denying the maintenance of and the retention of the copper network in what I’ve seen quoted by them so far. That would be a cost that would continue to grow over time as the copper network becomes more difficult to maintain.”

Oakeshott has called for the Coalition to switch to a fibre-to-the-home approach for several years and says he will continue to “call them out” on what is an “inferior policy position”. He will also continue to build bipartisanship support around FTTH.

One of his main points of contention with the Coalition's version of the NBN is he believes it will not provide the rate of return that the federal government’s NBN has targeted – a 7.1 per cent return over the 30-year period 1 July, 2010 to 30, June 2040.

“It’s just disappointing that the Liberal party in 2013 is arguing against the market in carbon pricing and arguing against the rate of return for the NBN build. Markets and rates of return should be the traditional domain of the business-friendly Liberal party,” he says.

“I just wish, in many ways, that it was Malcolm Turnbull arguing the case for fibre-to-the-home and not against fibre-to-the-home because personally, in many other policy areas, he and I are peas in a pod.

“It wrecks me in the brain that they’re for some reason choosing politically not to support them.”

With an election date now set for 14 September this year, Oakeshott says the NBN will be a significant election issue. But given the choice, he believes Turnbull would rather not fight on the election battleground over the NBN.

“I think he’s [going with FTTN] to demonstrate that he is part of the team and I just hope if they are successful in government, that in many ways he is the minister for communications so that he can minimise the damage done by any election promises made,” he says.

“How a lower speed with less reliability and a lower rate of return is better for Australia even stretches the imagination of a good and smart man like Malcolm Turnbull, let alone the rest of us.”

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Tags Malcolm TurnbullNational Broadband Network (NBN)Rob Oakeshottfibre-to-the-home (FTTH)fibre-to-the-node (FTTN)

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