FED:$56 a month for basic NBN access

AAP General News (Australia)
12-20-2010
FED:$56 a month for basic NBN access

By Peter Veness and Adam Bennett

CANBERRA, Dec 20 AAP - Households are likely to pay about $56-a-month to secure basic
access to the $35.9 billion national broadband network.

The NBN business plan, released on Monday, shows telecommunications companies will
have to pay a monthly rate of $24 for a basic 12 megabits per second package.

When this service is sold onto families and businesses, retailers are likely to charge
about $56 per month.

The long-awaited plan also promises a seven per cent rate of return for the company
rolling out the network, NBN Co Ltd.

The assumption is based on a 70 per cent takeup of the network by businesses and homes.

Further to the expected rate of return is the prediction of a $13.4 billion capital
raising from the markets by 2015.

Prime Minister Julia Gillard lauded the business case, saying taxpayers' investment
"will be returned with interest".

"What this document is telling you today is the NBN is viable," she said.

"That's before you go to all of the economic benefits for business."

But Opposition Leader Tony Abbott declared the plan was yet more evidence of a government
unable to deliver promises on time or on budget.

"The roll-out of the NBN was promised to be completed in eight years," Mr Abbott said.

"We now learn that it will not be complete until 2021, three years later and 14 years
after Labor's original failed NBN tender."

Communications Minister Stephen Conroy has admitted a range of factors could influence
the timing of the network's rollout or budget.

"They include the labour market," Senator Conroy told Sky News.

"This (rollout) is over a nine-and-a-half-year period but Australia is already moving
towards a degree of labour shortages."

"The whole Australian economy has that as a capacity constraint."

Senator Conroy said NBN Co was already in discussions with construction companies about
training up a skilled workforce.

The minister's opposite number, Malcolm Turnbull, challenged the very foundation of
the plan, saying it delivered no "nirvana for cheaper broadband".

"It's supposed to deliver universal and affordable broadband, and yet the broadband
price that they've talked about today ... is comparable, it is certainly no cheaper than
many comparable prices for 12 megabits per second for broadband ADSL2+," he told reporters
in Sydney.

Reaction outside political circles was largely positive although University of New
South Wales competition expert Frank Zumbo raised a series of concerns.

"In addition to the many questions and concerns relating to the cost and revenue assumptions
used in the NBN Business Plan, there are concerns surrounding wholesale and retail pricing
of NBN services," Prof Zumbo said in a statement.

"This will lead to price disparities at both the wholesale and retail level adversely
affecting consumers, particularly those consumers in regional Australia."

When parliament last sat the government released a summary of the business case.

Ms Gillard said the government had since received advice from the competition watchdog
on the points-of-interconnect (POI) decision and that was incorporated in the business
plan.

A POI is the location where internet traffic is exchanged between one network and another.

Ms Gillard said the government accepted the advice of the watchdog to adopt a so-called
"semi-distributed model", to use existing infrastructure and to have more points of interconnect,
allowing business access to the NBN.

"The Australian Competition and Consumer Commission has advised the government that
with this model, the ACCC has the regulatory powers it needs to ensure a uniform wholesale
price should the market not deliver that," she said.

The business plan shows a February 2012 deadline for the network to be offering business
"commercial services" while remote locations will be able to fully and permanently access
the high speeds via two satellites by 2015.

AAP pv/sb/was

KEYWORD: NBN WRAP

� 2010 AAP Information Services Pty Limited (AAP) or its Licensors.