NBN CEO rejects suggestion he advocated dumping HFC, FTTN

Bill Morrow confirms that NBN prepared high-level cost analysis of dumping technologies in favour of FTTC

NBN CEO Bill Morrow has denied suggestions that he proposed that the company dump its use of fibre to the node (FTTN) and hybrid fibre-coaxial (HFC) in favour of fibre to the curb (FTTC).

A Senate Estimates yesterday hearing featured extensive probing of a presentation by the NBN chief executive to communications minister Senator Mitch Fifield more than two years ago. Morrow said that the presentation included a “high level” analysis of the costs of three options: The government switching its planned HFC rollout to FTTC, putting a cap the then-existing FTTN build and using FTTC instead, and dumping both HFC and FTTN in favour of the newer FTTC technology.

Morrow initially revealed details of the presentation last month at another Estimates hearing when he told senators that he had a discussion with the government “about if the government wanted to have more of a singular type of technology, a fibre to the curb type technology, here are the consequences. Here's how long people would have to wait longer than they would otherwise. Here’s how much more peak funding that we would need to be able to deliver that.”

“That is a discussion that we did have,” Morrow said.

“There was a never a proposal made, but what there was, was as we saw the different technologies that emerged that weren’t available at the time the plan was put together we felt it was our obligation and duty to present this to the shareholders as now new alternatives should they want to go down a different path,” Morrow said at last night’s hearing.

“And so we presented this in the format of whether or not they wanted to change out the existing infrastructure to deploy FTTC or whether they wanted to change out either one of them — being FTTN or HFC,” the CEO said.

Morrow reaffirmed NBN’s position that it is “technology agnostic” with regards to the rollout of the network.

“NBN do scenario planning...  they provide presentations to government, but there was not a proposition put to government to follow a particular path,” Fifield told the hearing. The decision to dump HFC and FTTN “would have delayed the rollout of the NBN,” the minister said.

NBN is “technology agnostic” within the funding envelope and 2020 rollout deadline set by the government, Fifield said.

“NBN, as is entirely appropriate, are constantly looking at options and scenarios,” the minister said. “NBN did not make a recommendation to government... and it would have added cost and would have delayed the roll out of the NBN.”

“Substantially higher costs for the NBN would have translated through to higher costs for customers,” Fifield said.

“It was close to the time that we were discovering that FTTC is a real technology that may take hold in several countries around the world and that we could consider that as an alternative,” Morrow said. The CEO said NBN already knew that it would use FTTC in a “limited application” — for those homes where FTTN connections would not be capable of at least 25Mbps.

Morrow told last night’s hearing that NBN has “no plans at this point” to increase the level of FTTC being rolled out. The company currently expects to connect around 1.5 million homes and businesses using the technology.

In April NBN announced that it was boosting by 440,000 the number of premises earmarked for FTTC, with most of the additional premises having previously been expected to be hooked up with HFC or FTTN.

As of the end of March, some 1,047 premises with FTTC connections were able to order NBN services. NBN only launched commercial FTTC services in April.

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