FAQs

NBN Co has posted frequently asked questions on its website in relation to jobs and the first release sites. Consistent with this past practice, the following are a series of frequently asked questions in relation to current operations, network plans and proposed services.

Will NBN Co connect every premise they pass?

In First Release Sites, NBN Co is seeking consent to connect to premises. This is known as an "opt-in" process.  While an "opt-out" process would facilitate the rollout, this is ultimately a policy decision. In any case, NBN Co is committed to thorough processes of consultation with the community as we roll out the network.

What is the impact of the Heads of Agreement between NBN Co & Telstra?

If the Heads of Agreement are formalised, the two largest benefits for NBN Co are likely to be:

• a saving in CAPEX as NBN Co will gain access to Telstra's physical infrastructure (including ducts, pits, exchanges and backhaul) to roll out the new fibre optic cables, thereby reducing the need to duplicate infrastructure; and,
• an accelerated migration of customers to NBN Co's network and therefore an increase in the revenue of NBN Co.

The agreement with Telstra improves NBN Co's business case and reduces the total costs to build for NBN Co.

Does NBN Co have a business case? When will it be released publicly? What period does it cover?

As part of its three-year Corporate Plan, which is required of every Government Business Enterprise, NBN Co has prepared a business case. It will present its three-year Corporate Plan to the responsible Minister in accordance with the Commonwealth Authorities and Companies Act 1997.

It is a matter for Government what detail of this Corporate Plan is to be released publicly.

When will the company generate a profit?

Towards the end of the deployment period we expect the Company to be in a position to be able to cover its capital and operational costs. Before then, the Company will be funded by equity injections from our shareholder, the Commonwealth Government.

Over the lifetime of this project, we expect to provide the Government with a return that is higher than the Government Bond rate.

Will NBN Co sell bonds to raise capital? When will NBN Co seek private debt funding?

It is likely that after an initial period of several years the funding of NBN Co would include debt market issuances (bonds and loans) in addition to existing shareholders equity.

What prices will NBN Co charge?

NBN Co is a wholesale business.  The retail prices charged to consumers and businesses will be determined by the Retail Service Providers (RSPs).

NBN Co recognises it will operate in a market place and will seek to establish wholesale pricing which allows retailers to be competitive with existing broadband services.

NBN Co is still working through its regulated wholesale pricing in consultation with the ACCC. There will also be a substantial period of industry consultation.

Retail pricing and service offerings will ultimately be determined by the market.  However NBN Co aims to create a level playing field for retailers enabling greater levels of retail competition and innovation in many areas.   On this basis we expect there to be a broader range of pricing plans to meet the needs of home and business customers.

Will the Universal Service Obligation exist?

Please refer to the DBCDE website for information.

What satellite service is NBN Co proposing to operate?

NBN Co is planning to launch two next generation Ka band satellites that will each have a total capacity of between 60 and 80 gigabits per second. The broadband access services available over satellite are designed to provide peak download speeds of 12 Mbps - similar to those that many city people currently experience. However, the speeds that end users will experience will depend on a number of factors including the plan they choose, their equipment and their in-premises connection.  NBN Co is exploring the potential for the satellite system to deliver future speeds to 100Mbps or more.

If there are copper cables damaged or destroyed by floods, wouldn't it be better to replace them now with fibre?

The fibre-to-the-premises rollout involves the construction of a range of supporting infrastructure as part of the development of a whole new network. It is not just the replacement of copper for fibre, but the installation of fibre access nodes (like exchanges) and distribution networks, transmission links and so on that the fibre needs to be connected to as part of delivering a new service. This is a long-term construction project.

Isn't NBN Co already scheduled to build the network in Toowoomba, Springfield Lakes and inner-northern Brisbane early this year anyway? Won't this address the repair needs?

NBN Co is planning to start construction on its Second Release Sites in the above Queensland locations in the second quarter of this year. But again, this is the beginning of a major construction process that will take quite some time to complete, and further time to activate. In the meantime, flood-affected businesses and residents will still need the restoration of copper-based services until the new network can be built. NBN Co is currently in the detailed design phase for its work, and construction is planned for discrete areas within the wider fibre serving areas in each location. The coverage area is still being finalised through the design process.

Are there any ways the NBN can be managed to reduce duplication and rework of construction that will be needed in these areas in the future?

Yes, we are keen to explore any synergies for the future rollout. For example, if new trenching is required as part of the rebuilding effort, we would like to work with relevant authorities to lay appropriate ducts or conduit so that this work needn't be done again for the rollout. However, it is not possible to provide a fibre-based service at present because the supporting infrastructure has not yet been built.

Why should we move to fibre? Wouldn't it be just as vulnerable to flooding?

We have seen that Mother Nature is very powerful and there are some physical events that may destroy any network. However, one advantage of fibre over copper in a flood situation is that fibre doesn't need to carry an electrical current to operate, like a copper network does. When inundated, an optical fibre line can still carry its digital signals and support a telecommunications service - provided that the electronic devices at the fibre access node - which is like an exchange - and the premise are still operational. NBN Co is paying special attention to flood data in the placement of its fibre access nodes, and the network terminating units in premises should be mounted as high as practically possible.

Will my phone keep working in a flood?

As mentioned above, provided that the electronic equipment at either end of the fibre line is operational, the fibre line should continue to support a telephone service. This is also dependent on there being a source of power. NBN Co is planning to supply battery backup units, together with a battery, when installing a new NBN terminal at a fibre-connected premises. However, it is important that end-users maintain the battery so they can continue to make and receive calls during power outages.

End-users will need to have a phone service provided over the analogue port (on the network terminal) and use a traditional (unpowered) analogue phone in order for their telephone to continue to operate.

What is NBN Co's source of funding?

The NBN is being funded initially by equity funding from the Commonwealth. So far the Commonwealth has provided $662 million equity funding to NBN Co which covers all of NBN Co's commitments as well as projected costs into the medium term. The Government's Implementation Study estimates that $26 billion in equity funding will be required for the project. It is intended that the remaining funds needed to build the network and fund the company will come from NBN Co's own revenues and, at an appropriate time, the private debt markets.

Wouldn't it be better to spend money on health and education which are the real priorities for the community?

The NBN is infrastructure that will enable improvements in service delivery and productivity in health and education. High speed broadband will facilitate the transfer of medical images, the holding of remote consultations by doctors and the provision of distance training for medical professionals. Broadband services also have the potential to allow people to stay in their homes longer by providing improved access to medical professionals, or medical monitoring services.

The NBN will facilitate access to information and services to provide a richer and more diverse educational experience. Also, the NBN is an investment, not simply a budget outlay. NBN Co's business case outlines the timeframe over which NBN Co will repay the Commonwealth's equity funding, and provide a return on the investment over the lifetime of the asset.

Won't NBN costs blow out?

The NBN Stage One rollout has come in on time and under budget in Tasmania, and NBN Co has learned a great deal from this project.

The NBN's construction is a highly repeatable, scalable building process involving very similar modules as we rollout across the country. There is significant scope for applying continuous improvement methodologies to drive down costs.

How does the Telstra Heads of Agreement assist the NBN rollout?

The Heads of Agreement with Telstra, if formalised by way of binding agreements, will reduce NBN rollout costs by giving NBN Co access to Telstra's existing infrastructure such as underground ducts, exchanges and transmission. We also expect to dramatically reduce the NBN's revenue risk with the Telstra Heads of Agreement outlining the decommissioning of the copper access network as the fibre network is rolled out.

Why has a publicly-owned body like NBN Co been given the job of building the NBN instead of leaving the investment to the private sector?

NBN Co was devised to provide high-speed broadband services to all Australian homes and businesses. Its role is to build an integrated national broadband network providing fibre to 93 per cent of premises and wireless and satellite to the remaining seven per cent. Private companies need to make a commercial rate of return for their investors. In other words, private companies will only invest and build a network where they can make sufficient profits to satisfy shareholders. In a country as big as Australia there are many areas where it is not commercially attractive to build a network. The NBN will have national scale that will allow it to provide services to both profitable and high cost areas. NBN Co has developed a business case which indicates that it can build the network and still make an acceptable return on the government's investment over the life of the network.

Prior to setting up NBN Co the Government did extend a request for proposals to the private sector to build the NBN but this process was terminated on advice from the independent Panel of Experts that none of the compliant national proposals offered value for money.

How is it that a Government-controlled monopoly can improve competition?

NBN Co is building a wholesale-only open-access network. This means it is building the platform that service providers (access seekers) like Telstra, Optus and others will use to deliver retail services to consumers and businesses. NBN Co is committed to treating all access seekers on equivalent terms and to building a network that lowers the barriers of market entry for new competitors. In this way the NBN will encourage the growth of retail competition based on prices, service quality and innovation.

Who should own the wholesale network?

An efficiently-run, publicly-owned, wholesale telco can maximise the public interest as one of its objectives.

It is much easier to deliver nation-wide eHealth and remote education services on a standardised and ubiquitous high-speed broadband network.

It is proposed that the NBN will be a wholesale-only network which will provide the underlying broadband capability to all players on equivalent terms. NBN Co is working closely with the ACCC to ensure that the company operates within an appropriate regulatory framework.

Why are existing mobile networks inadequate for future broadband?

In all wireless networks, the bandwidth is shared between users. The actual speeds experienced by the end-user are dependent upon the number of other concurrent users in the mobile network cell, and the user's distance from the centre of the cell. NBN Co's fixed wireless technology is designed to provide a peak speed of at least 12 Mbps. This is because a fixed network can be dimensioned to cater for a set number of concurrent users compared with existing mobile networks where speeds are  affected by the number of users roaming into and out of the cell.

How will the boundaries for the Second Release Sites be determined?

NBN Co has identified the Fibre Serving Areas (FSA) in which second release sites will be located.  Each FSA covers around 70,000 to 80,000 premises. The actual second release sites will involve passing around 3,000 premises. The exact area to be covered will be determined after further site investigation and discussion with local government, and consideration of key engineering, network design and logistical criteria central to our rollout strategy.

What were the factors taken into consideration in choosing the location of Second Release Sites?

The relevant factors in choosing second release sites were:

• the level and quality of existing broadband services;
• estimated population growth;
• key engineering, network design and logistical criteria; and
• the engagement of local government and the receptiveness of communities to broadband initiatives.

What about installation of cables and wiring?

When an end-user wishes to activate the connection and selects a retail service provider, NBN Co will install a Network Terminating Unit inside each premise (house, apartment, business) free of charge which will have 4 data ports and 2 voice ports which can be used to connect customer equipment to the network. This alone will be sufficient to dramatically improve end users' broadband experience.
It is then up to each individual customer as to how they decide to configure the inside wiring of their premise in consultation with their Retail Service Provider RSP (or other suitable service provider) depending upon the services and plan they choose, in the same way as occurs now with Pay TV and telephone installation.
Currently in Tasmania service providers including iiNet, Primus and Internode are making available special offers for connection to the NBN, many of which include free installation or other components.  For details we recommend you visit their websites - see links.

• link to iiNet offer
• link to Primus offer
• link to Internode offer

Where can I get more information about inside wiring?

The peak industry body for telecommunications, the Communications Alliance, has published The NBN End-User Premises Handbook which describes:

• the main components of an NBN End-User Premises connection and the key details surrounding each component.
• the installation practices and guidelines for the installation and operation of the NBN at customers’ homes, businesses and other service sites.
• key information and issues relating to End-User Premises, intended to provide a common reference point for further discussions among the communications industry, construction industry, NBN infrastructure providers, government and regulators.

The source document can be accessed here

How will this service compare with satellite services currently available in Australia?

We intend to differentiate our satellite services based on (among other things) speed, coverage and price as a wholesale product.

The core design focus of the NBN Co satellite service is to provide high-speed broadband services for all Australia, including the more remote areas such as the Norfolk Island, Christmas Island, Lord Howe Island and the Cocos Island, Antarctic bases and Australian coastal islands.

How will the design of the NBN Co satellite service differ from existing satellite services?

NBN Co's next generation satellites will be purpose-built to provide high-speed broadband for the Australian population, and not splitting capacity between a number of other tasks like satellite phones and broadcast television, and not focused on providing services in other countries.

The NBN Co satellites will have multiple focussed high-capacity beams that maximise spectral usage. NBN Co will also use the next generation of ground equipment and acceleration techniques to maximise performance.

Satellites will form part of the NBN Co integrated national network that will utilise fibre, wireless and satellite technologies.  This gives NBN Co the flexibility to choose from a mix of technologies to minimise the cost of building high speed broadband services.

What is the status of the satellite tender?

In January this year NBN Co issued a request for capability statements (RCS) for the supply of satellite services. This process identified a number of highly qualified and experienced satellite and related services providers.  Delivering a satellite service requires a satellite manufacturer and launch provider, ground station build and operations, customer equipment, network, IT services and so on. We have attracted a group of world class providers in each of these segments.

Does this mean that you are putting together the components of your own service and not selecting an end-to-end solution?

NBN Co has left open the option, and will evaluate the respective benefits of either an end-to-end solution or one comprised of product and services from a range of best-of-breed providers.

What satellite services will be available from NBN Co until the new satellites are launched?

NBN Co will acquire available satellite capacity from the market to provide early access to an NBN Co wholesale-only satellite broadband service in the interim.

Do you have the necessary expertise to manage this process and service?

We have hired highly experienced people who have worked in the satellite industry for many years. We have also engaged international experts as advisers.

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