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7/28/2019 Broadband and Telecommunications Policy
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The Coalitions plan for real action on
Broadband andTelecommunications
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EXECUTIVE SUMMARY
Australians need fast, reliable and affordable broadband services delivered over an affordable high-
speed broadband network using the best mix of optical fibre, wireless, DSL and satellite technologies.
The Coalitions plan will deliver a uniform national broadband network, under which 97 percent of premises
are able to be served by high speed networks capable of delivering from 100 Mbps down to a minimum
of 12 Mbps peak speed, using a combination of technologies including HFC, DSL and fixed wireless.
This will help businesses to be more productive, reduce costs, reach more customers here and overseas
and employ more Australians. It will help families with access to education, information and medical
services.
Labor is heading down the wrong track. Its government owned and government run broadband networkwill be a taxpayer funded white elephant when it is completed in eight years time. It does nothing to
deliver lower prices. It just substitutes one monopoly for another. It gives no priority to those who do not
get an adequate service today. Under Labors plan Australians will be waiting up to eight years before
they see a change.
The Coalition will cancel Labors reckless and expensive National Broadband Network.
Instead of creating a new, inefficient Government run monopoly, the Coalition will create a vibrant,private sector-based broadband market, with Government involved to encourage competition and ensure
services reach all Australians.
The Coalitions Plan for Real Action on Broadband and Telecommunications will:
1. Establish a National Broadband Commission
The Coalition will create a National Broadband Commission to design and manage a competitive
selection process to select the private sector companies which will execute the various programmescomprising the Coalitions Plan for Real Action on Broadband and Telecommunications.
2. Prepare a National Broadband Database
The Coalition will direct the National Broadband Commission to gather and make publicly
available high quality information about the availability of broadband services on a premises
by premises basis across Australia, through building and maintaining a detailed database (the
National Broadband Database).
3. Establish a Fixed Broadband Optimisation Programme
The Coalition will serve the priority areas quickly by identifying the areas where Australians are
underserved particularly outer metropolitan areas and rural and remote areas and filling
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those gaps as quickly as possible by committing $750 million of funding for a Fixed Broadband
Optimisation grant programme to significantly increase the number of households which can
receive a DSL service or high speed equivalent.
4. Commit up to $2 billion of Funding for New Fixed Wireless Broadband Networks
The Coalition will commit up to $1 billion in grant funding for new fixed wireless networks in rural
and remote Australia. We will commit up to an additional $1 billion in investment funding for newfixed wireless networks in metropolitan Australia, with an emphasis on outer metropolitan areas.
Through these actions the Coalition will deliver uniform nationwide availability of high-speed
broadband so that by 2016 Australia achieves a national broadband baseline with 97 percent
of premises able to be served by high-speed networks, using a combination of technologies
including DSL, fixed wireless and other technologies such as Hybrid Fibre-Coaxial (HFC). We
will ensure that all such premises, wherever they are in Australia, are able to receive services at
prices comparable to those for similar services in metropolitan areas.
5. Fund new satellite services for the remaining three percent of the population not coveredby other technology
The Coalition will provide grant funding of $700 million to support the provision of improved
satellite delivered broadband services to the remaining three percent of the population who do
not have access to other technologies.
6. Break the backhaul bottleneck by establishing a new national fibre optic network to deliver
competitive backhaul
The Coalition will ensure lasting competition and stimulate new private sector broadband
networks by committing up to $2.75 billion in funding (with the expectation of leveraging at
least $750 million in additional private sector funding) to create a nation-wide competitive fibre
optic backbone by 2017. This will ensure two lanes of backhaul fibre each accessible by any
telecommunications company to provide multi-technology broadband.
7. Implement Pricing and other regulation to support competition and Broadband
The Coalition will legislate to allow the ACCC to set access pricing to support broadband
competition.
8. Provide a way forward to a higher bandwidth, more fibre-intensive Australia
The Coalition will establish a commercial and technical platform for much greater fibre
penetration over coming years, particularly by stimulating demand for broadband services and
in turn stimulating investment by the private sector (building on government contributions such
as new and more competitively priced backhaul).
9. Conduct a major review of the Universal Service Obligation
The Coalition supports the need for enhanced consumer protections within the existing Universal
Service Obligation Framework and will enact intermediate improvements to the USO framework.
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In addition the Coalition would task the NBC with examining the proposal of the Glasson Review
for a new and broader framework to be known as the Communications Service Standard (CSS)
as the rollout of the new infrastructure and the grants that will be provided in this policy are
delivered, together with communications infrastructure that is being built by the private sector.
10. Review greenfields estates
The Coalition will conduct an urgent review of whether to mandate that all greenfieldsconnections must be fibre, with a view to implementing any new arrangements from 1 January
2012 at the earliest.
11. Support consumers
The Coalition will ensure that consumers have the tools and resources to make the right choices
for them regarding their communication needs.
12. Maintain Do Not Call Register but oppose extending it to business phone numbers
The Coalition remains opposed to extending the Do Not Call Register to business telephonenumbers.
13. Target mobile phone coverage blackspots
The Coalition will provide grant funding to address mobile coverage blackspots in urban and
rural areas. We will provide $30 million to support the deployment of the telecommunications
infrastructure necessary to ensure communities have adequate and reliable mobile phone
coverage.
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HOW LABOR HAS FAILED
Labor has made major mistakes in broadband policy.
Shortly after coming to government, Labor cancelled the Howard Governments contract with the OPEL
consortium to deliver a broadband network in outer suburban and rural and remote Australia. Had this
contract proceeded, hundreds of thousands of homes would now be receiving broadband services
instead many now face a long wait before services are available under Labors NBN.
The Labor Government sought to implement a policy of building a fibre-to-the-node (FTTN) network to
98 percent of the population. It failed because Labors FTTN plan was flawed from the start. A National
Audit Office inquiry found that the proposal was never likely to succeed. The tender wasted $30 million,
including $17 million of taxpayers funds.
In April 2009 the Labor Government dumped its failed FTTN plan. To cover up its failure, Labor made
a political decision to announce its poorly thought through plan for a fibre-to-the-premises (FTTP)
network. That is Labors so-called National Broadband Network (NBN).
Labors NBN is riddled with problems. The NBN will cost $43 billion if every assumption is met, if
nothing goes wrong, if there are no delays, if there are no cost blow-outs in any of the eight years of the
project build. The Implementation Study says taxpayers must put up a minimum $26 billion. As losses
mount, taxpayers will bear more of a burden.
Given the Rudd-Gillard Governments track record of poor execution, there is every reason to doubt that
the NBN will be built on time and on budget.
The NBN is enormously expensive because of the need to build fibre all the way to each home served,
regardless of whether they will use the service or not.1
The NBN may never attract enough customers or revenue to cover its costs. Even if it does, the
Implementation Study says it will only earn a very low rate of return between six and seven percent.
NBN Co will be the dominant fixed line player and monopoly network operator. As regulator and owner,
government will face a profound conflict of interest. NBNs management will inevitably push to be
allowed to enter retail markets, competing with existing private sector players. Labor recently published
draft legislation permitting this if the Minister authorises it. There will be a strong incentive to allow this,
particularly as time goes by and pressure mounts to demonstrate a commercial return.
1. Implementation Study p 19: there will be 12 million premises by 2018. Implementation Study p 17: 93 percent of premises will be connected to fibre.
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NBN is a hugely expensive bet on a particular technology (FTTP), but it is not a bet which should be
made with taxpayers funds especially with the surging popularity of wireless broadband. For the three
years to 2009, mobile broadband subscribers increased by an average of 157 percent per year.2
Twenty five percent of Australians are accessing the Internet either via mobile or fixed wireless networks.3
At the same time, the speeds capable of being delivered over wireless are increasing constantly. Telstra
recently announced that the theoretical speeds available over its wireless network had increased from
21Mbs to 42Mbs, with an increase to 84Mbs only a year away.4
2. Buddecom data provided by Parliamentary Library.3. Australian Bureau of Statistics, 8153.0 Internet Activity, Australia, June 2009.
4. M Bingemann, Telstra doubles wireless speed, The Australian, 16 February 2010, 31.
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THE COALITIONS PLAN FOR REALACTION ON BROADBAND ANDTELECOMMUNICATIONS
The Coalition will:
1. Establish a National Broadband Commission
The Coalition will establish a National Broadband Commission (NBC) that will be charged with
implementing the Coalitions Plan for Real Action on Broadband and Telecommunications.
The NBC is expected to complete its task within ten years. We will review the NBC after ten years.5
By drawing on selected personnel and resources of the current NBN Co and telecommunications
regulators such as ACMA and the ACCC, the NBC will be able to start immediately. It will take full
advantage of the work done and expertise held by NBN Co. As the NBC will be a much smaller and more
focussed agency, its management will be required to prepare a new business plan for approval by the
Minister.6
The NBC will operate under a board appointed by the Minister. In view of the priority attached to
broadband services for rural and remote Australia, the board of NBC will include people with experience
and knowledge of rural telecommunications.
The NBCs role will be to design and manage a competitive selection process to select the private sector
companies which will execute the various programmes comprising the Coalitions Plan for Real Action
on Broadband and Telecommunications. The NBC will contract with those companies and supervise
their performance.
The selection criteria to be used, in choosing the private sector companies to execute the programmes,
will include: capacity to meet the governments policy objectives (including the experience and
capabilities of the company), price, value for money and capacity to deliver services within acceptabletime frames.
The NBC priority will be to commence work on new networks and services in the areas of greatest need.
The NBC will be required to achieve its objectives at the lowest possible net cost to the community. If it
can spend less than the amount allocated, it will be required to do so.
5. There would be a presumption in favour of NBC being wound up, unless the review finds that there remain outstanding serious issues concerning broadband
that require NBCs continuing operation. When it is wound up, its monitoring and reporting functions will be transferred to another government agency such
as ACMA.
6. NBC will also have specific responsibility for managing the transition for the small number of customers who as at 1 August 2010 are receiving a serviceunder the NBN trial in three locations in Tasmania. This will include conducting a tender for parties wishing to continue to operate the installed network inthese three locations so that these customers can receive continued service.
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The Coalition will require that all networks funded under the Plan for Real Action on Broadband and
Telecommunications be open access networks. That is, the operator of the network must provide access
to the network to any other telecommunications carrier or carriage service provider, to allow them to use
the network to provide competing retail services. Access prices will be set under the telecommunications
access regime administered by the ACCC.
To assist in achieving the most rapid possible rollout of services, the Coalition will take a proactiveapproach to spectrum allocation to support its broadband initiatives.
2. Prepare a National Broadband Database
To properly undertake its functions, the Coalition will direct the National Broadband Commission to
gather and make publicly available high quality information about the availability of broadband services
on a premises by premises basis across Australia, through building and maintaining a detailed database
(the National Broadband Database).
The National Broadband Database will be based on the geospatial modelling of premises conducted as
part of the Labor Governments Implementation Study. This will be supplemented with detailed sampling
fieldwork. The database will be made available for public feedback within six months of the Coalition
taking office.
The database will underpin all competitive selection processes conducted by the NBC.
3. Establish a Fixed Broadband Optimisation Programme
The Coalition will fund up to $750 million for a Fixed Broadband Optimisation grant programme to
significantly increase the number of households which can receive a DSL service or an effective wireline
alternative (such as HFC).
The most commonly used technology to deliver broadband is DSL. However, there are many homes
which today cannot receive DSL services. The key reasons are that their telephone line has a pair gain
system or is delivered via a RIM (remote integrated multiplexer) two technologies used extensively by
Telstra in the past which unintendedly prevent DSL being delivered over the line. It is likely that at least
one million homes are affected.7
Therefore one of the most rapid and cost-effective ways to increase broadband availability at reasonable
speeds is to fund the removal of DSL blockers such as pair gain systems and RIMs.
Funding will be available anywhere in Australia, as even in rural and remote areas there are homes
which could be served by DSL today but are not.8
7. Implementation Study p 190 notes that Telstra installed up to 1.2 million pair gain lines which make it impossible to receive DSL; that pair gain restrictsmany households to slow dial-up Internet, even in 2010 and estimates the cost of remediating all of these lines at $2 billion.
8. Implementation Study p 282 notes that, even in the last seven percent, there are around 400,000 premises which have the capacity to receive broadband over
DSL but cannot today because DSLAMs have not been installed in the exchanges serving those premises.
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Where DSL is currently not available the emphasis will be on using the best available, most cost-effective
technology to provide service to those areas. This will put those areas on a technology base which
allows competition and innovation to drive continuing improvements in service over time.
The design of the Fixed Broadband Optimisation programme will be based on the National Broadband
Database.
The Fixed Broadband Optimisation programme will carry out the following activities:
installing DSLAMs in exchanges which do not have them;
upgrading exchanges to ASDL2+ if they have earlier generation DSLAMs installed;
remediating pair gain lines;9
redesigning networks to permit delivery of broadband services in areas currently served by RIMs;
and
providing broadband services to premises that cannot receive DSL today, using other technologiesthat should be more economic.
4. Commit up to $2 Billion of Funding for New Fixed Wireless Broadband Networks
The Coalition will commit up to $2 billion to meet urgent broadband needs in outer metropolitan Australia
and rural and remote Australia.
The Coalition believes that our broadband policy objectives should be to fill the gaps as quickly and
efficiently as possible and to establish the uniform availability of broadband at a reasonable speed andreasonable price.
It is not our intention to replace private enterprise with a new government bureaucracy; rather, our focus
is on correcting market failure.
To execute the Coalitions plan, funding for new wireless broadband networks will be allocated in two
components:
Grant funding of $1 billion commencing within one year of the Coalition taking office, in fixedwireless broadband networks serving rural and remote Australia.
Investment funding10 of $1 billion in new fixed wireless networks in metropolitan Australia with
an emphasis on outer metropolitan areas (or alternative technologies if they prove superior under
the competitive selection process and if the coverage, price and open access requirements are
met).
9. Removing DSL blockers will allow premises to receive DSL which cannot receive it today, at the full range of speeds at which DSL is delivered (which in turndepends on distance from the exchange). That is, this programme is about increasing the availability of DSL, but it does not involve a speed commitment.
10. Investment funding will generate a financial return to the Commonwealth. Consistent with the accounting treatment proposed by the Labor Government for
its national broadband network, this funding will not form part of the Commonwealths Budget. The NBC will advise on the appropriate rate of return target
for this investment, but indicatively we envisage a rate of around the long term bond rate plus one to two percent would be appropriate. The selection criteria
will include those applicable to the grant funded programmes described elsewhere in this policy, along with additional criteria: the extent of investment
committed by the private sector partner; capacity to meet the governments rate of return target; and capacity for the government to exit its investment and
receive its required return within acceptable time frames.
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Especially in rural and remote Australia, fixed wireless broadband is particularly well suited to meeting
these objectives. Fixed wireless networks can be rolled out more quickly than fixed networks; fixed
wireless networks have a lower capital cost (reducing the scope of subsidy required and also increasing
the probability of private sector entry); and fixed wireless networks perform well as an overlay to fixed
networks to fill the gap, for example in areas which are too far from an exchange to receive DSL services.
Wireless technology is now in a phase of spectacular development globally. There are many more users
on wireless networks than on wireline networks internationally, and the numbers are especially large
in the most rapidly growing economies of our region. The very large and growing installed base of
customers served on wireless networks is one factor behind the enormous commercial potential of
wireless. Another is the rapid take up of devices such as the Kindle and the iPad.
This policy is intended to ensure that services are provided to Australians who do not today receive
adequate fixed broadband service. Accordingly, the governments contract with wireless network
providers will require that they provide a fixed service, and particularly that it is provided over customerpremises equipment (CPE) suitable for a fixed service (such as a modem-like device suitable for use
with a desktop computer).
Providers may also wish to offer other products such as USB modems suitable for use with laptop
computers, and even mobile wireless broadband products, but this will not be a requirement under their
contract with government.
In particular, it will be important to manage spectrum in a way that enables these new fixed wirelessnetworks to complement the plans of the existing mobile operators to upgrade their networks to 4G
using Long Term Evolution (LTE) standards that provide for peak network speeds of up to 100Mbps and
higher.
With backhaul as a major part of the Coalitions policy, private sector operators can begin operations
in rural and remote Australia at the same time as new competitive backhaul services funded under
this policy begin to come on stream, knowing that they will have access to fibre optic backbone (either
immediately or within a reasonably foreseeable period) at prices that maximise their ability to provide
affordable service from day one.
Wireless broadband makes economic sense and places rural and regional Australia at the frontier of
current technologies. To ensure prices to end users in rural and regional Australia are comparable to
those for similar services in metropolitan areas, the operator(s) of these wireless broadband networks
will be required to provide a service over the network at a price comparable to similar DSL services in
metropolitan areas.11 The requirement will apply for the life of the contract (expected to be fifteen years).
11. Retail DSL prices typically start at about $30/month and rise to over $100/month - depending on various factors including download limits, speeds and so
on. Wireless services will be sold at comparable prices to these, on the new wireless networks to be built under our policy. This will be achieved by requiring
the wireless network operators to sell wholesale services at prices comparable to wholesale DSL services in metropolitan Australia. While wholesale DSL
prices are not publicly disclosed, there is a thriving wholesale DSL market. We will task the NBC to monitor wholesale prices for DSL and for the new wire
less networks, and to ensure compliance by the new wireless networks with this comparability requirement.
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The NBC will determine the specific areas comprising metropolitan and rural and remote and will
assess the suitability of proposals to serve these areas through the competitive selection process.
The Coalition will seek to exit the investments as soon as possible. Unlike Labors approach to the NBN,
the Coalition will not seek to exercise managerial control as a corollary of providing investment funding.
The specific mechanism for the investment will be determined based upon advice from the NBC.
The selected operators will be required to meet strict time requirements, so as to achieve the target of
completing the rollout by 2016.
5. Fund new satellite services for the remaining three percent of the population not covered by
other technology
The Coalition will provide grant funding of $700 million to support the provision of satellite delivered
broadband services to the remaining three percent of the population not covered by other technology.
This funding will maintain the existing Australian Broadband Guarantee programme which funds
broadband services over satellite. While under Labor current funding allocations are dropping, we have
allocated additional funding to allow scope for the bandwidth delivered to end users (recently increased
to 1024 Kbps) to be further increased.12
The balance of the funding is intended to be used for a structural change to the provision of satellite
services to the last three percent of Australian premises, with effect from 2014-15. Specifically, with
new Ka band satellites expected to be available shortly, offering significantly improved bandwidth
and efficiency compared to todays satellite, our policy allows sufficient funding for a substantial new
programme drawing on such new technology.
Prior to 2014-15, the NBC will consider and make recommendations on how the additional funds are best
used to deliver such a structural change.
With funding of $450 million available from that point, the Coalition believes that this is likely to take the
form of grant funding to a private sector operator or operators, chosen through a competitive selection
process.
Such a selection process will be designed to determine the best available speed and quality of service.
We will require that the service provided to end users complies with price benchmarks, similar to the
requirements presently applicable under the Australian Broadband Guarantee arrangements. We will
not be prescriptive as to whether the operator will own a satellite or will lease transponders from an
existing operator.
12. The current budget allocation is $38m/year, with the cost expected to reduce as the number of eligible premises (defined to be those unable to receive a
metro-comparable broadband service) reduces.
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6. Break the backhaul bottleneck by establishing a new national fibre optic network to deliver
competitive backhaul
The Coalition will commit up to $2.75 billion in funding (with the expectation of leveraging at least $750
million in additional private sector funding) to establish a nation-wide competitive fibre optic backbone.
This will break the backhaul bottleneck by ensuring there is affordable fibre backhaul in locations
where there is currently only a monopoly provider of backhaul.
In rural and regional Australia, the difficult economics of building networks over vast distances means
that many consumers and businesses in these areas are underserved and receive patchy, inadequate
or more expensive broadband services. A key bottleneck in rural and regional Australia is expensive
monopoly backhaul the long haul connection from a country town back to a capital city, over the
transmission or trunk network. Inquiry after inquiry (including in the Glasson Review and the Labor
Governments NBN Implementation Study) has found that backhaul costs are a major barrier to
broadband services in much of Australia. Both wireless and fixed networks need backhaul.
This programme addresses that bottleneck. It is designed to complement the fixed wireless funding
programmes of the Plan for Real Action on Broadband and Telecommunications and will greatly reduce
backhaul costs and thus improve the economic viability of wireless networks, particularly in rural and
remote Australia.
The Coalitions nation-wide fibre optic backbone programme will provide access to backhaul at prices
that encourage competitive broadband investment and ensure that the cost of providing backhaul on
longer, thinner routes in regional Australia does not prevent the equitable delivery of broadband services
to consumers and businesses at prices enjoyed in metropolitan areas.
This programme will be managed by the NBC. Funding will not be provided on routes where competitive
backhaul is already available. The NBC will contract with the private sector to construct and manage the
network. Where the operator(s) can lease fibre from existing providers on terms that the operator has
management control of the fibre capacity and can deliver the required pricing in the wholesale market,the operator(s) will do this in preference to building. Where this is not possible the NBC will provide
funding to the operator(s) to build new fibre optic backhaul infrastructure.
This programme will establish a nationwide, competitive fibre optic backbone. Where necessary this
will involve new physical build - and the programme is funded sufficiently to allow a build which entirely
duplicates the existing monopoly backhaul network. Where suitable terms can be obtained to lease a
link from the existing monopoly provider, allowing that link to be included in the network operated and
managed by a private sector operator/s under contract to the NBC, then that leased link will be included
in place of a separate physical build.
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The Coalition will also offer direct fibre connections (access network connections) to as many schools
and hospitals within the backhaul footprint as possible.13 The precise number to be connected will be
determined through the competitive selection process.14 However, our default requirement will be that
in every location where there is a point of interconnect, if there is a school at that location there will be a
direct fibre connection to that school and if there is a hospital at that location there will be a direct fibre
connection to the hospital.
The Coalitions competitive, nation-wide fibre optic backbone will be built and operated by the private
sector, with the recipients of direct funding for building fibre optic routes chosen through a competitive
selection process. To be selected, companies will be required to provide substantial capital funding
of their own, so as to leverage the public funding to the maximum extent. The Implementation Study
estimates a build cost for such a network of $3.5 billion.15 The Coalition expects that its funding of $2.75
billion, together with funding leveraged from the private sector, will be sufficient to meet the build cost
of the network. In addition, these operators will be required to offer long term contracts with concrete
options to renew, so as to ensure the long term availability of lower pricing for the telecommunicationscompanies which purchase backhaul capacity.
Operators of fibre optic routes funded under this policy will be required to sell wholesale backhaul
services to any telecommunications company which requires it. Unlike Labors vertically integrated
NBN Co, the fibre backhaul network operators funded under the Coalitions Plan for Real Action on
Broadband and Telecommunications will have a strong incentive to sell to other operators.
In addition, the network operator(s) who receive funding under this programme will be required to give
contractual commitments, to be enforced by the NBC, about their wholesale pricing. These commitments
will set limits on the rate of return which will be received recognising the high fixed and low variable
cost characteristics of fibre networks. These characteristics mean that once there is sufficient traffic
to meet the target rate of return, it should be possible to offer reduced pricing to all users as traffic
increases.
Ensuring competitive, nation-wide access to fibre optic backbone will deliver many benefits:
It will serve the fixed wireless networks to be built under the Plan for Real Action on Broadband
and Telecommunications connecting the base stations at lower cost than today and helping thenetwork operators deliver services to consumers and business at the lowest possible cost.
It will stimulate competition from the existing fixed and mobile non-Telstra operators in rural and
remote Australia, by providing them cheaper backhaul and letting them expand their broadband
services more aggressively in rural and remote Australia. This will mean better services and lower
prices in rural and remote Australia.
13. The Coalition envisages that retail operators will come forward to use these direct fibre connections to offer services to the schools and hospitals which
are connected.
14. There are around 9,500 schools and 1300 hospitals in Australia. Around 50 percent of schools are already connected to fibre, as are many hospitals.
Australian Bureau of Statistics: ; Australian Institute of Health and Welfare, Australian Hospital Statistics 2006-07, p xix, ; Department of Education, Employment and Workplace Relations, Strategies For Realising The National
Vision Of Connectivity For Australian Schools, October 2008, p 3 http://www.deewr.gov.au/Schooling/DigitalEducationRevolution/Documents/fcs_strategies.pdf
15. Implementation Study, p 323 & 331 says that a fibre backhaul network of 70,000 km, would cost $3.5 billion. The incremental cost of the backhaul
connections to mobile base stations (estimated in the Implementation Study as requiring 3,500km of fibre) will be met out of either this funding component
or the separate funding component of up to $1 billion for wireless networks in rural and regional areas. The NBC will provide advice on this issue.
Implementation Study p 312 says that with 1,100 wireless towers, the network reaches the 97th percentile of premises.
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It will be a platform for the rollout of new broadband networks in the future all around Australia, as
private sector operators will be able to build these new networks knowing they can connect them to
the new competitive, nation-wide fibre optic backbone. There are many exciting possibilities: local
wireless access networks offering high speed broadband; developers building fibre access networks
in new suburbs; and apartment buildings with VDSL over copper connected to fibre backhaul.
There is an explosion in data volumes being carried over telecommunications networks, particularly as
the volume of video traffic being carried over the internet jumps enormously. This factor means that the
backhaul bottleneck is a more pressing problem with each passing month. If the benefits of broadband
and the internet are to be enjoyed equitably amongst all Australians, including those in rural and remote
Australia, we must act urgently to make competitively priced backhaul available across the nation. That
is why the Coalition is setting aside sufficient funds to build a competitive national fibre optic backbone
to break this bottleneck once and for all.
7. Implement Pricing and other Regulation to Support Competition and Broadband
The Coalition will introduce legislation containing the reforms to Part XIB and XIC of the Trade Practices
Act 1974 which are presently contained in the Telecommunications Legislation Amendment (Competition
and Consumer Safeguards) Bill 2009, in substantially the same form as those reforms are presently
drafted. The legislation may include additional reforms designed to further stimulate broadband network
investment.
These reforms will create much-need certainty for the industry and will avoid the delays that have
characterised the operation of Parts XIB and XIC to date.
The Coalition believes that by facilitating up front price setting and allowing a specific pricing regime to
apply for a longer period of time, these reforms will help create an investment climate in which Telstra
and others will be ready to contemplate major network investments. These reforms will be implemented
in a manner that provides the industry with predictable, transparent, accountable and timely regulation,
while avoiding unnecessary compliance burdens.
The Coalition will seek urgent advice from the ACCC and from market participants about further pricingreforms which may allow even longer term price setting, consistent with approaches used in other
industries such as gas and electricity and as, for example, was proposed in the G9 access undertaking
lodged with the ACCC in 2007.
There is a case for allowing the use of a price cap methodology for setting prices, where necessary
over a long period of time, based on key inputs such as actual costs, depreciation profile and demand
forecasts.
The ACCC has expressed its broad support for such an approach, provided there is suitable regulatory
audit and review of the key inputs.
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The Coalition supports timely and effective action to discourage and clamp down on anti-competitive
behaviour. This includes giving the ACCC the power to issue binding rules of conduct. Given such a power
does not apply to other industries it should be used as a last resort and accompanied by appropriate
safeguards.
8. The Way Forward to a Higher Bandwidth, More Fibre-Intensive Australia
The Coalition will pursue policies designed to stimulate the broadband market in Australia and to
establish a commercial and technical platform for much greater fibre penetration over coming years.
The key elements of that platform include:
By ensuring the delivery of a uniform national broadband network, under which 97 percent of
premises are able to be served by high speed networks capable of delivering from 100 Mbps down
to a minimum of 12 Mbps, peak speed, using a combination of technologies including HFC, DSL
and fixed wireless, with the remainder having access to satellite, we will stimulate the growth of thebroadband market and of applications which rely on the ubiquitous availability of such a speed.
Rural and regional Australia will, through our fixed wireless network, be connected to the most
dynamic element in current telecommunications technology and in applications, with our fixed
wireless network also offering natural complementarities to mobile uses.
By breaking the backhaul bottleneck, we will encourage competitive entry by new players building
access networks, both wireless and fixed. With affordable backhaul, many more players will now be
able to enter the market.
By ensuring direct fibre connections to many schools and hospitals, we will offer a powerful
demonstration of what fibre can deliver, and allow its high speed services to be used in settings
where they are of the most value in the short term.
We are confident that these measures will drive Australia rapidly to an even higher bandwidth world.
There are many possible ways that even higher bandwidth services will be delivered in Australia in years
to come. These might include:
Telstra and Optus delivering 100 Mbps services over their HFC networks in our major cities.
Telstra, Optus and VHA delivering high bandwidth services over their 3G mobile networks and in due
course over 4G networks.
New wireless players such as Vivid Wireless delivering high bandwidth services.
The PSTN being upgraded in key locations to fibre to the node (FTTN) or fibre to the premises
(FTTP), as other incumbent carriers are doing internationally, using their shareholders funds rather
than those of taxpayers.
New developments being built with FTTN or FTTP networks.
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16/19THE COALITIONS PLAN FOR REAL ACTION ON BROADBAND AND TELECOMMUNICATIONS 16
We cannot be sure which of these or other possibilities will eventuate; that will be up to the market. But we
are highly confident that the initiatives of the Plan for Real Action on Broadband and Telecommunications
will stimulate the private sector to deliver new broadband services over time, building on the specific
initiatives in the plan.
We believe the right way forward to high speed broadband is through the operation of the market,
stimulated by the initiatives set out in this policy document. Governments role should be that of
addressing instances where private investment fails to deliver, not to replace the private sector with
public monopolies. To ensure it does address those failures, government should use taxpayers money
wisely and in a carefully targeted way not put it recklessly at risk.
Other Telecommunications Policy Initiatives
9. Conduct a major review of the Universal Service Obligation
The USO is a key safeguard for consumers ensuring that all Australians, including people in rural and
remote Australia, have access to essential telephone services and payphones.
The Coalition supports the need for enhanced consumer protections within the existing Universal
Service Obligation Framework.
For this reason the Coalition has made it clear that it supports further improvements and enhancements
in the areas outlined in the current Telecommunications Legislation Amendment (Competition and
Consumer Safeguards) Bill 2009.
The Coalition regards these as interim improvements to the USO framework. The Glasson Review
recommended the replacement of the USO with a new and broader framework to be known as the
Communications Service Standard (CSS).
A Coalition Government would task the NBC to examine the proposal as the rollout of the new infrastructure
and the grants that will be provided in this policy are delivered, together with communications
infrastructure that is being built by the private sector.
The review will be timed to ensure new arrangements can be in place by 30 June 2014 as recommended
by the Glasson Review.
10. Review Greenfields Estates
Labor has mismanaged its approach to the issue of whether new housing estates (greenfields estates)
should be built with fibre connections or continue to be built with copper connections.
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17/19THE COALITIONS PLAN FOR REAL ACTION ON BROADBAND AND TELECOMMUNICATIONS 17
Labor announced new requirements without adequately consulting with the property industry and set a
rushed implementation date of 1 July 2010. It soon became clear that this date could not be achieved as
so many complex issues remained unresolved, and the new arrangements were deferred for six months.
The Coalition believes that new dwellings should have a fibre connection rather than a copper connection.
The incremental cost of installing fibre rather than copper in new developments is relatively low and will
decline over time. If new dwellings are connected to fibre, then over time the percentage of dwellings
connected to fibre will increase. This in turn will create a critical mass of fibre connected dwellings, and
products and applications designed to serve that market will increase.
However, there are many complicated issues to resolve before this principle can be given effect in
practice, including:
Who bears the cost of installing fibre (particularly the incremental cost over a copper installation)
and how can we minimise the impact on the cost of housing particularly for those seeking to buy
their first home?
Who bears the formal legal obligation is it the telecommunications company or the property
developer or another party?
To which kinds of developments (including minimum size) does the obligation apply?
How does this obligation interact with the Universal Service Obligation?
Given the emerging competition in the market to build fibre access networks in new developments
(with some developments already including such networks as a selling point), how can this
competition be encouraged?
How are the technical standards for such fibre access networks in new developments determined?
The Coalition will conduct an urgent review of these issues, ensuring that all stakeholders (from both
within and outside of the telecommunications sector) are given an adequate opportunity to offer their
views.
To allow sufficient time to conduct the review, and to inform all stakeholders of the new arrangements,
the Coalition will set 1 January 2012 as the earliest possible start date for any new arrangements which
are determined following the review.
11. Support consumers
The Coalition will ensure that consumers have the tools and resources to make the right choices for
them regarding their communications needs.
The Coalition believes Australian consumers should have more streamlined complaints handling
processes and more consumer awareness initiatives developed and adopted in conjunction with industry.
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18/19
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19/19
COSTINGS
Recurrent expenditure
* Funding is additional to existing Budget allocation.
** National Broadband Database included within NBC expenses.
Capital expenditure
2010-11
$ million
2011-12
$ million
2012-13
$ million
2013-14
$ million
2014-15
$ million
2015-16
$ million
2016-17
$ million
TOTAL
$ million
New wireless networks metro
0 0 0 375 375 250 0 1000
Authorised and printed by Brian Loughnane for the Liberal Party of Australia, Cnr Blackall and Macquarie Streets, BARTON ACT 2600.
2010-11$ million
2011-12$ million
2012-13$ million
2013-14$ million
2014-15$ million
2015-16$ million
2016-17$ million
TOTAL$ million
Fixed Broadband OptimisationProgramme
200 350 0 0 100 100 0 750
New wireless networks ruraland remote
0 200 175 175 200 250 0 1000
Competitive National FibreOptic Backhaul
0 0 50 100 750 850 1000 2750
Satellite to serve last 3 percent* 22 68 80 80 150 150 150 700
Establish a National BroadbandCommission**
20 20 15 15 15 15 15 115
Target mobile phone blackspots 10 20 0 0 0 0 0 30
ToTal 252 658 320 370 1215 1365 1165 5345