Fibre to the node to be phased out under Labor NBN policy

Up to 2 million more homes will receive fibre to the premises (FTTP) under Labor’s National Broadband Network election policy.

Labor will “scale up” the FTTP rollout and phase out fibre to the node. FTTN relies on copper phonelines for the ‘last mile’ connection to a household.

Although Commonwealth obligations under current FTTN contracts would be maintained, Labor would commission a study from Infrastructure Australia to assess when existing FTTN rollout areas should be transitioned to FTTP.

The policy, announced Monday, estimates the cost of the fibre-heavy plan to range from $49 billion to a maximum of $57 billion.

The NBN rollout will be completed by 30 June 2022, the policy states.

“The public equity contribution will be the same regardless of who wins the election. The difference is that up to two million more Australians will get a Fibre-to-the-Premises NBN under Labor,” said a statement issued by Labor.

“The NBN is off-budget,” the policy document states. “Labor’s plan assumes public equity assumptions in line with current Turnbull Government forecasts. The Parliamentary Budget Office has confirmed the proposal would not have an impact on the budget as it does not change the timing of, or the cap on, government equity contributions to the NBN.”

$56 billion is the upper estimate contained in the revised NBN corporate plan, released in August. NBN's operating plan, from which the corporate plan is derived, pegs peak funding at $46 billion to $56 billion, with the company's management aiming for $49 billion.

The NBN strategic review carried out after the Coalition was elected in 2013 concluded that a 'multi-technology mix' network could be rolled out by 2020 with peak funding estimated at $41 billion.

The corporate plan claims that the cost of Labor’s original all-fibre NBN rollout would have been between $74 billion and $84 billion.

The government’s equity cap for NBN is $29.5 billion.

Both plans will require NBN to raise debt, with Labor arguing that “second-rate copper NBN is a riskier proposition for debt providers than Labor’s planned policy settings, which will deliver higher long term returns and fewer risks (a base Internal Rate of Return of 3.9 per cent compared to 2.7 per cent under the Liberals).”

Labor has previously indicated it would be open to employing fibre to the distribution point (FTTdp) for parts of the NBN.

FTTdp “has the potential to deliver fast and reliable broadband while reducing customer connection costs,” Labor’s policy document states.

“This is a new technology which has not yet been rolled out at scale. Labor will further explore the potential of this technology in government.”

Hybrid fibre-coaxial will be retained under the plan, with Labor noting that the terms of Telstra’s deal to hand over its HFC assets require the HFC network to be maintained in order for Foxtel to continue to be delivered to subscribers.