Staggering cost for NBN connections

Wednesday

Shadow Minister for Communication Michelle Rowland talks about failings of the current NBN rollout in Tasmania.

New NBN Satellite Sky Muster II Launch. Sky Muster II will provide additional data capacity to support the delivery of the company’s satellite broadband service for around 400,000 homes and businesses in regional and remote Australia.

PROVIDING every Australian with a quality home internet connection is undeniably a mammoth task — and one that certainly doesn’t come cheap.

The country’s National Broadband Network (NBN) will spend an average of $7000 per rural household in order to connect them to the nationwide network.

Regional residents have been a focus in the early years of the rollout in a push to bridge the often cited digital divide between Australia’s cities and rural areas.

Those outside major cities will be able to access the NBN via its fixed wireless towers or Sky Muster satellite service, the total cost of which will be about $4.5 billion to the taxpayer. That level of investment comes with a $7000 per household price tag to connect premises, according to a report by market research firm Ovum.

NBN’s fixed wireless service was launched in 2011 and will provide access for more than 600,000 rural premises by 2020.

Currently the fixed wireless network is delivering services to more than 175,000 end-users across the country but on Thursday the company announced it had reached the key footprint milestone of 500,000 premises.

The report by Ovum, which was commissioned by the NBN, aims to highlight the level of investment the taxpayer-funded company has spent on regional areas compared to its global counterparts.

The report notes that countries such as Ireland, France, Canada and the UK are all spending less than $1000 per household on regional broadband rollout.

NBN commissioned report aims to spruik high level of NBN investment in rural Australia.

NBN commissioned report aims to spruik high level of NBN investment in rural Australia.Source:Supplied

Despite Australia’s broadband speeds slipping in global rankings, the report focuses on the mandate to provide a minimum of 25Mbps, even for those Aussies in the most remote parts of the country.

“With a minimum available wholesale speed of 25Mbps for all end-users, irrespective of their location or technology platform, Australia has set the bar far higher than seen in equivalent markets such as the United States, the UK, Canada or France,” the report notes.

Recent fixed wireless trials by NBN Co saw the company achieve download speeds of 1Gbps as it works towards the goal of accelerating peak speeds on its wireless network to 100Mbps.

“The NBN Fixed Wireless network plays a key role in ensuring there is no digital divide between urban and regional Australia,” NBN chief executive Bill Morrow said in a statement attached to the Ovum report.

Due to the immense size of Australia’s continent and the country’s low population density the difficulties and financial challenges of a universal service obligation are self evident. According to the government, the NBN fixed wireless and satellite services are expected to generate a net loss of $9.8 billion over 30 years.

So the government has plans to introduce a so-called “NBN tax” which will see the big ISPs that provide fixed line services slugged with a monthly tax of about $7.10 per end-user.

The idea of an NBN tax was first made public in December when the Communications department began consulting with industry on the idea. It’s expected to introduce the regional broadband scheme (RBS) charge bill to parliament in the coming months.

Provided it passes ISPs will likely pass the tax onto consumers meaning those in the city will effectively subsidise those on regional NBN services.

Australia?s Sky Muster II satellite successfully launched into space on October 5. The Ariane 5 rocket blasted off from French Guinea, carrying a satellite from Australia?s National Broadband Network. The Sky Muster II satellite will extend broadband coverage for people living in rural Australia. Credit: Various

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