TECHNOLOGY SPECTATOR: Gillard's NBN blitz

The PM has used her Queensland trip to warn voters that the Coalition will destroy the NBN, although Tony Abbott is doing a pretty good job of that himself with his familiar banter.

Technology Spectator

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Gillard's NBN satellite spruik

As the Gillard government gears up for the federal election expect the verbal jousting on the NBN to tick up a notch. The respective parties will most likely stick to a familiar tune spruiking that the broadband future of the nation hangs on which party gets into power after the next election.

The latest example of this is the Prime Minister Julia Gillard’s week-long jaunt through Queensland. Labor has already been trounced at a state level, and is likely to lose a few federal seats as well. The fact that the NBN is an important part of the PM’s blitz was highlighted yesterday by her announcement of NBN Co’s $280 million satellite deal with US firm ViaSat and a promise to deliver the NBN fixed-wireless network to homes in Townsville, Mackay and Rockhampton.

The ViaSat deal is the second plank in NBN Co’s $2 billion satellite component of the NBN and the US firm will build two 13.5 metre-wide satellite antennas for each of the NBN's 10 satellite ground stations around Australia, as well as 200,000 satellite dishes for households and infrastructure for the network's data centres. With the Space Systems/Loral building the two Ka-band broadband satellites the only deal left to be made is finding someone to launch the satellites into space and that job is most likely set to go to France’s Arianespace.

Gillard’s announcements were accompanied by a stern reminder that the NBN was and will be a Labor initiative, an initiative devised to ensure that those in rural and regional Australia are not left out. So Labor’s line on the NBN as the federal election edges closer is clear: 'a vote for Labor is a vote for the NBN because Tony Abbott and the Coalition will destroy this broadband dream'. Given the sub-standard connections that people in regional and rural Australia have had to put up with, Gillard’s message has a particular potency. However, it may come to naught if the rollout isn’t done on time.

A Coalition NBN rift?

While there are many who don’t subscribe to the Labor line that the Coalition will destroy the NBN the Opposition leader is certainly doing his level best to convince everyone that that is exactly what he wants to do. While shadow communication and broadband minister Malcolm Turnbull was busy lampooning the NBN newspaper last week, Tony Abbott was telling Australians why we didn’t need a NBN at all. Abbott has always maintained that the NBN is a luxury that the country can’t afford and the billions will be better spent on road and rail infrastructure.

A Waste of money, an unnecessary luxury, a white elephant - we have all heard Abbott hum this ditty before. But the opposition leader’s latest muttering seems to be at odds with what Turnbull has been saying and to me this highlights a distinct divide that exists within Coalition ranks. It’s a divide that could potentially widen once larger parts of rural and regional Australia get connected to the NBN.

Abbott’s comments about the NBN might not ring all that true to National MPs once their electorate starts to enjoy the benefits of the network. The Coalition is yet to divulge its broadband plans but just what these plans mean for regional a rural Australia will be of critical importance.

SAU talks and multicasting

Apart from the rollout NBN Co is still trying to get over the final regulatory hurdle with regards to the Special Access Undertaking (SAU), with the ACCC now in consultation with telcos and NBN Co on how the issue of regulatory oversight will be tackled. This is almost certainly going to be last gasp of a lengthy process where the telcos have left no stone unturned in ensuring the imposition of strict regulatory oversight on NBN Co’s capital expenditure.

Delivering a financial return is a key tenet for NBN Co and the telcos justifiably want to ensure that the wholesale monopoly provider doesn’t end up hiking the prices if it starts failing to hit the cost recovery targets.

The magic word here for NBN Co is of course 'uptake' - preferably of the higher speed services - and so far the signs are good on that front.

The uptake issue is also critical to the other bit of news this week with regards to the multicast service. Malcolm Turnbull has pointed out in his recent blog that NBN Co’s willingness to reduce the entry-level prices for the multicast services casts a shadow on NBN’s overall commercial plan.

However, he might be drawing a long bow here. As Ovum’s David Kennedy points out the impact of lowering the entry-level prices for multicast will have a modest impact on NBN Co’s revenues mainly because the corporate plan only predicts multicast revenues to be a miniscule portion of total revenues. According to Kennedy, the real benefit of a lower pricing regime will be realistically translated into cheaper IPTV services.

"But since IPTV will be bundled with broadband in all cases, customers who choose a bundle will get a cheaper overall product. But customers who choose broadband alone won’t benefit,” Kennedy says.