Internet Australia has raised concerns about the implications of the choice of technology and the long term risks that it creates for the National Broadband Network, in the wake of a report by the Parliamentary Budget Office.
According to IA, the PBO report outlines the financial exposure from the Commonwealth’s investment in the NBN but is lacking in technical analysis.
“The PBO has made no assessment of the impacts of potential changes in the market and technology on the long term value of NBN Co,” IA CEO Laurie Patton says.
Ignoring the flaws in the current deployment strategy weakens this report. Likewise, not giving robust attention to the rapidly changing local and global markets for broadband services diminishes the value of the report,” Patton claims.
{loadposition peter}“Patton claims Australia is being outplayed by our international competitors at a time when there are huge changes occurring in the digitally-enabled world economy. “This is clearly evident, for example, when you consider how more advanced New Zealand is in the provision of fast broadband, as this report shows.
“While we appreciate that the PBO is constrained by its mandate, it is hard to understand why it did not at least note the considerable risks created by the Government’s choice of technologies.”
Patton says IA wrote to the PBO earlier this week urging it to take into consideration the current technology mix and its potential to affect the Government’s financial exposure.
“We advised the PBO that new technologies that will be available during the term of the NBN rollout will make the copper-based FTTN network, which on current NBN information will constitute around 30-40% of the total build, no longer fit-for-purpose over the long term.
“IA has previously provided this advice to the Senate’s NBN Committee. Its technical experts believe that within 10 to 15 years, if not sooner, the FTTN sections of the NBN will need to be replaced.”
IA also highlights its concern about the lack of attention to technical issues in terms of an eventual sale of the NBN, as envisaged by the Government.
“We’ve previously pointed out that any potential purchaser of the NBN would presumably require the sale price to be discounted by whatever quantum it estimates to be the cost of a significant impending technology upgrade. This impost will be in addition to any write down that might flow from the inability of NBN to repay the $20 billion recently loaned to it by the government and required to be repaid in 2021.”
IA says it believes the PBO should have considered the issue of the NBN’s cash flow. “Obviously, with a $20 billion dollar debt to the government requiring repayment in 2021 this is a significant matter,” Patton notes