NBN Buzz: Google's NBN pointers

NBN Buzz is a weekly wrap up of everything that's going on with Australia's largest infrastructure project. For previous editions and the latest news visit our NBN Buzz page.

Our NBN future may still be up in the air but one version of the fibre-to-the-home broadband future espoused by the Gillard government has finally been given form by Google in Kansas City.  Meanwhile, regional Australia is increasingly becoming the broadband battle ground with invectives between the government and the opposition now in full flight. Finally, NBN Co welcomes an ardent critic into its fold in a move that should provide some new perspective as the network is rolled out.

Google's FttH case study

We will start with Google's fibre network in Kansas City, which like the NBN has seen its fair share of delays and is committed to spreading the message of ultra-fast broadband and its potential to transform the lives of its users.

Google's network and the NBN are not exactly the same kettle of fish. The company eschewed its ambitions of being an open network provider a while ago and has instead opted to go direct with its own services. But, in essence, the success Google's network will provide a template of sorts to whether FttH networks can actually be profitable.

Building an ultra-fast FttH network isn't cheap - some industry estimates indicate laying out fibre across Kansas City could cost Google anywhere between $60 million to $1.6 billion. But the final cost will be determined by the level of uptake for the services on offer and the final footprint of the network.

Google's chief financial officer Patrick Pichette has been quick to point out that the company plans to make a profit out of its endeavour but has added that this shouldn't be just about profits, it's about transforming how users sign up for access. 

So what's on offer for the residents of Kansas City. There's a $US120 a month package of TV, one gigabyte per second internet speeds and one terabyte of cloud storage. There's also a one gig-a-second internet-only package priced at $US70 a month.

Google is also offering a slower DSL-like 5 megabits per second service, with no monthly fee to households that pay a $US300 installation fee and early adopters also get a Nexus 7 tablet with the Google TV app. The trick now, and this will be a key for our NBN as well, is to make sure that people actually decide to sign up to the service and preferably the $US120 a month package.

How things pan out for Google in Kansas will make interesting viewing because the company will have to fight against major cable players like Time Warner for the customers, hoping that the allure of greater speeds will bring them on board. While there will be a segment of people who will naturally gravitate to Google making the network profitable will need the company to tap into the broader market in an competitive environment.

NBN Co, which won't be quite as hampered by competitive pressures, will have similar hopes to Google with an expectation that most Australian households opt for the higher tier services. The early evidence is in NBN Co's favour but we won't know for sure until the NBN rollout shifts into higher gear.

NBN for the bush and the Coalition disconnect

A large portion of the overall rollout process is focused on regional and rural Australia and unsurprisingly the recent political jousting over the network has also zeroed in on this.

Malcolm Turnbull's latest attempt to extoll the virtues of the Coalition's broadband policy – which highlighted how NBN Co is working against the interests of rural Australians – has drawn a swift response from communications and broadband minister Stephen Conroy, who has again accused the Coalition of misleading the Australian public.  

According to Conroy, NBN fibre will reach 70 per cent of homes and businesses in regional Australia.

“This includes towns with less than 1000 premises where they are on the NBN transit network, such as Inglewood in Queensland, Brookton in Western Australia, and Trentham in Victoria,” Conroy said in his latest statement.
 
"The one thing we do know is that a Coalition government won't connect any homes or businesses in regional Australia to fibre - not to towns with 1000 people and not to towns with 1000 premises.”

This merry dance between Conroy and Turnbull is unlikely to end in a hurry and it doesn't' matter which side of the NBN fence one stands on there is still a distinct lack of clarity on what sort of a NBN the Coalition will deliver.

This lack of clarity exists despite Turnbull's efforts so far, but one suspects that matters of political sensitivities may precedence at the moment over the urge to produce more detail. On top of that there is still a glaring disconnect when it comes to a unified message from the opposition.

Case in point, this recent response to a NBN question by the Federal Shadow Treasurer Joe Hockey on ABC Radio. Hockey was asked by a listener about what the Coalition intends to do with the NBN once it comes to power.

Hockey responded by saying that the Coalition hasn't given the “exact details” of its broadband plan.

“We will need to have a good look at the NBN, as Malcolm Turnbull has flagged, to find out exactly what contracts are locked in.”

There you go folks. While Turnbull reckons a casual stroll through his blogs will give us the answers we seek Hockey says the exact details are yet to be divulged.

NBN Co gets a new commercial chief  

Finally, NBN Co has reportedly hired a chief commercial officer with former SAP Australia chief Tim Ebbeck getting the position.

Apart from being a highly successful executive, he consistently achieved growth rates of up to 30 per cent year-on-year while at SAP, Ebbeck is also known an ardent critic of the NBN.

In March last year Ebbeck decried NBN Co's lack of focus on wireless technology in a speech at the American Chamber of Commerce in Australia. He was at the time also at pains to point out that the total cost of the project needs to come down.

To get an executive of the calibre of Ebbeck is a boon for NBN Co, which should welcome his perspective and commercial savvy. Ebbeck's dissent should also be welcome because the last thing NBN Co needs is more yes-men.