Up until 2009, the year in which nbn™.co was created, many small businesses in Australia relied on dial-up internet as the most common and affordable connectivity option. However, as businesses began relying more heavily on the internet, ADSL became more attractive due to its faster speeds and reliability. It allowed businesses to browse the web, check emails, and even manage basic online operations like online banking or e-commerce.
As small businesses grew, they needed more reliable and secure internet connections to meet their growing demands. This led to the introduction of dedicated leased line connections, which were high-speed, secure but also significantly more expensive than ADSL. While these lines were ideal for businesses that required a consistent, uninterrupted connection for mission-critical applications, the jump in price from ADSL made bonded copper services offering symmetrical speeds out of the question for many businesses. These services were also limited in availability by location and vendor, with an often complex pricing structure based on whether an office was located within a metro or regional area, with the definition of each location type often varying between vendors in each state.
There were many product names, huge inequality in connectivity options between regional and metro areas (and sometimes even from one metro area to another), and infrastructure monopolies. All of which was applying a handbrake to the adoption of online tools and e-commerce.
These were the catalysts for the creation of The National Broadband Network (nbn™ Co) in April 2009, a government-owned corporation tasked with designing, building, and operating Australia’s wholesale broadband access network. As mentioned above, it was created with the goal of addressing several issues that the country’s telecommunications industry was facing, namely:
- The digital divide between urban and regional areas in Australia. Urban areas typically had access to faster and more reliable internet services than regional areas, leaving rural and remote communities at a disadvantage. The nbn™ aimed to bridge this divide by providing high-speed internet to all Australians, regardless of their location.
- Outdated infrastructure was hindering internet speeds and capacity. The existing copper network was not capable of delivering the high speeds that were required for modern internet usage, and upgrading this infrastructure was not a priority for the dominant network operator.
- Competition was limited within the telecommunications industry. By providing a wholesale-only network that would allow retail service providers to offer their own services on the network, the nbn™ would provide consumers with a wider range of services to choose from and encourage competition and innovation in the industry.
The project aimed to build a high-speed broadband network connecting every Australian home and business to the internet, regardless of location or infrastructure limitations.
The creation of nbn™.co was an admission by the Government that the free market in Australia’s telecommunications industry wasn’t working. Why? Well firstly, the industry was dominated by a few large players who had established their positions through historical advantage rather than market competition. These players had a significant amount of control over the industry and could maintain high prices and limit competition.
Secondly, there was limited competition in the industry due to the high cost of infrastructure investment required to enter the market. This limited the number of companies that could offer telecommunications services and created a significant barrier to entry for smaller players.
Thirdly, there was a lack of uniformity in the infrastructure across the country. The existing copper network was outdated and unable to deliver the high speeds required for modern internet usage. This meant that some areas of the country had faster and more reliable internet services than others, creating a digital divide between urban and regional areas.
These factors resulted in an industry not delivering the high-speed, reliable and affordable internet services Australians needed. nbn™.co was created to address these issues by providing a wholesale-only network that allowed retail service providers to offer their own services on the network, increasing competition and choice for consumers. It also aimed to future-proof Australia’s telecommunications infrastructure by ensuring that the network could handle the increasing demands of future technologies such as virtual reality, artificial intelligence, and the Internet of Things.
Everything nbn™ Explained
The team is finishing up the upcoming playbook that gives you the detail needed to sell Australian nbn™ internet services effectively. From high-level market intel to service-specific details, it’s all covered.
NBN Project Aims
On launching in 2009, the main objective of nbn™.co was to increase the accessibility and quality of internet services across Australia, with a particular emphasis on improving access in rural and remote areas. The key initial high-level objectives were:
- Access: To provide all homes, schools, and workplaces in Australia with access to high-speed broadband.
- Speed: To deliver broadband speeds of up to 100Mbps for 93% of premises with the remainder to have access to at least 25Mbps download.
- Uniform Pricing: To ensure all Australians have access to the nbn™’s wholesale services at uniform national wholesale prices.
- Infrastructure: To directly or indirectly provide the infrastructure needed to help service providers to deliver advanced digital services.
- Competition: To foster competition in the retail sector by operating on a wholesale-only basis, very similar in aim to what we saw in NZ with the splitting out of Chorus from Telecom (now Spark).
Over time, some of these objectives have evolved due to changes in government (more to follow on the politics of it all…), technological advances, and challenges encountered during the rollout. Here’s how some of the initial objectives have evolved:
- Multi-Technology Mix (MTM): Initially, the nbn™ was planned to be primarily a Fibre-to-the-Premises (FTTP) network like UFB in NZ. However, under a change in Government policy, the plan shifted to a "Multi-Technology Mix" approach. This approach utilises a range of technologies, including Fibre-to-the-Node (FTTN), Fibre-to-the-Building (FTTB), Hybrid Fibre-Coaxial (HFC), as well as the originally planned FTTP and fixed wireless/satellite for the most remote locations.
- Speed: The promise of delivering 100Mbps to 93% of the premises has also been changed due to the limitations introduced through the shift to MTM. The newer approach aims to provide "minimum standards," which means delivering downloads speeds of at least 25Mbps to all premises and at least 50Mbps to 90% of fixed-line premises as soon as possible.
- Rollout Timeline and Cost: The original timeline and budget have changed due to various challenges, including logistical difficulties, policy changes, and contractual issues.
- Upgrade Path: nbn™.Co announced a $3.5 billion network upgrade plan in 2020, aiming to provide up to 75% of fixeWd-line premises with access to ultra-fast broadband (up to 1Gbps) by 2023. This would be achieved through progressively upgrading FTTN and HFC access types (more on them later) to fibre to the premises (FTTP).
