A BILLION dollar blowout in costs for the National Broadband Network (NBN) for rural Australia is nothing to worry about, according to communications Minister Malcolm Turnbull.
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NBN Co released its fixed wireless and satellite review last week, which indicated an extra $1.6 billion would be needed for new infrastructure to meet higher than expected demand for high-speed broadband in rural and remote areas.
Mr Turnbull said the increase in infrastructure spending would not affect the government’s overall budget for the NBN.
“Estimated costs are in line with the high level assumptions made about the non-fixed footprint in the strategic review 2013 and will not affect the government’s $29.5 billion equity investment in the NBN Co,” Mr Turnbull said in a prepared statement with Finance Minister Mathias Cormann.
This was supported by NBN Co chief executive Bill Morrow who said the “significant increase” was still within the scope of anticipated costs under NBN Co’s major review of operations in 2013.
At the release of the review, NBN Co management indicated there would be demand for the NBN from more than 600,000 families, farms and businesses outside Australia’s cities by 2021 – up to three times more than originally anticipated.
To meet this demand, NBN Co has proposed building about 1300 more towers for fixed wireless broadband and connecting 25,000 more premises in rural Australia to the fibre-to-the-node network.
“It is becoming not just desirable but a necessary part of everyday life in regional and remote Australia,” Mr Morrow said.
However, this extra infrastructure would come at a cost with $5.1 billion needed for regional and remote Australia under this plan, compared with about $3.5 billion originally budgeted.
NSW Farmers telecommunications spokesman Anthony Gibson said the massive demand for high-speed internet in rural areas should not have come as a surprise.
Mr Gibson said there were three main drivers for the increased demand.
“Firstly, there is the fact government services are all going online – people are having to fill out forms and documentation online,” he said.
“The government should be providing the means to access those services.
“Then there is business efficiency – things like managing accounts, checking livestock trading information.
“Farmers are always under pressure to increase efficiency and they are looking at ways of doing this online.
“(Then) there’s connectivity – people keeping in touch with family and friends who are a long way away.”
The review also urged NBN Co and the retail telecommunications providers to work together to carefully manage the available capacity on the two long-term satellites that will service the remaining areas of rural Australia not covered by fixed wireless or fibre to the node.
It said satellite products should be designed to include better and more enforceable fair usage controls to enable all users to receive consistent, quality performance from the new satellites, at up to 25 megabits per second (Mbps) wholesale speeds.
Mr Morrow said NBN Co planned to launch the two satellites in mid-2015, with service from them to consumers to begin in early 2016, to enable NBN Co to focus on its activation as well as the migration of services from the interim satellite service.
To ensure high internet speeds, NBN Co was looking at options for satellite customers, he said, such as limiting them to 20 gigabytes a month.