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Monday, 27 February 2012
Page: 949

National Broadband Network

(Question No. 1480)

Senator Ian Macdonald asked the Minister for Broadband, Communications and the Digital Economy, upon notice, on 25 November 2011:

(1)   In regard to the National Broadband Network (NBN) rollout:

(a)   Why has NBN Co dismissed the use of existing teleports in Australia;

(b)   Why is NBN Co not looking to maximize Australian content; (i) what orbital slots is NBN Co using; (ii) how did it procure the orbital slots; and (iii) at what cost; and

(c)   Are the orbital slots fully coordinated with adjacent satellite operators?

(2)   In regard to NBN Co satellite services:

(a)   How many users is NBN Co intending to serve with the two Ka-band satellites and what is the estimated cost on a per user basis;

(b)   Can the satellite service be delivered more cost effectively through hosted payloads; if not, why not;

(c)   What have senior NBN Co procurements staff stated to industry during discussions that their vision is that NBN Co will become the satellite operator in Australia;

(d)   Is there an intention to re-create Aussat;

(e)   Why is NBN Co building a large organisation to procure, design and manage the satellite service when it could be done by specialist organisations;

(f)   Why has it taken more than 2 years to develop the project;

(g)   Can the Minister or NBN Co advise if NBN Co will provide government-subsidised satellite services to large multi-national enterprises; and (i) what is the cost per user for the interim satellite service, (ii) how does this compare to commercially available services, and (iii) can the interim satellite service be scaled with additional leased capacity on other satellites; if not, why not.

Senator Conroy: The answer to the honourable senator's question is as follows:

(1)   In regard to the National Broadband Network (NBN) rollout:

(a)   Why has NBN Co dismissed the use of existing teleports in Australia?

NBN Co Limited (NBN Co or the Company) is a Government Business Enterprise established to build and operate the National Broadband Network (NBN). Infrastructure investment decisions taken by the Company are considered by the NBN Co Board in the Company's commercial interests. This would include 'build versus lease' infrastructure investment decisions such as those relating to satellite teleports.

NBN Co has performed a detailed analysis and determined that no existing or newly proposed teleport meets its stringent service delivery requirements.

(b)   Why is NBN Co not looking to maximise Australian content?

On 19 January 2010, NBN Co extended an invitation for Capability Statements from experienced Satellite Network operators and equipment providers capable of supporting the delivery of NBN Co's Long Term Satellite Service (LTSS) requirements.

This process has allowed NBN Co to test the market to determine what capabilities are available both from Australian and international providers.

While the Government expects NBN Co to maximise the use of Australian content and solutions where practical and economic to do so, it is reasonable that NBN Co may consider international providers as part of its high capacity broadband satellite service given they have a proven ability to deliver large-scale satellite projects.

(c)   What orbital slots is NBN Co using? How did it procure the orbital slots? And at what cost? Are the orbital slots fully coordinated with adjacent satellite operators?

NBN Co has identified four orbital slots and is working with the Australian Communications and Media Authority (ACMA) on the orbital slot filing and coordination process.

(2) In regard to NBN Co satellite services:

(a)   How many users is NBN Co intending to serve with the two Ka-band satellites and what is the estimated cost on a per user basis?

The NBN Co Corporate Plan 2011-13, which was publicly released on 20 December 2010, indicates that the Long Term Satellite Service (LTSS) will serve up to 200 000 users (pg. 71). The Corporate Plan provides combined capital expenditure for both the LTSS and the fixed wireless network, which is approximately $3.2 billion to FY2021 (pg. 135).

(b)   Can the satellite service be delivered more cost effectively through hosted payloads, if not, why not?

As part of the Request for Capability Statement process initiated on 19 January 2010, NBN Co tested the market to assess the viability of different arrangements including a hosted payload model and this approach was considered as part of planning for the Long Term Satellite Service.

NBN Co has advised that there is not sufficient capacity available through current or soon to be launched satellite networks to effectively meet NBN Co's requirements of delivering a 12/1 Megabits per second (Mbps) service with an Average Busy Hour Throughput (ABHT) of 300kbps for up to 200 000 end users.

(c)   Why have senior NBN Co procurement staff stated to industry during discussions that their vision is that NBN Co will become the satellite operator in Australia?

It is not the Government's intention for NBN Co to be the sole satellite operator in Australia.

NBN Co's long term satellite objective is to provide affordable, high-speed broadband to the 3 per cent of Australian premises which will not have access to fibre to the premises or fixed wireless technology.

(d)   Is there an intention to re-create Aussat?

No.

(e)   Why is NBN Co building a large organisation to procure, design and manage the satellite service when it could be done by specialist organisations?

NBN Co assessment to date, including the Request for Capability Statement process initiated on 19 January 2010, has not found that outsourcing these aspects of the Long Term Satellite Service (LTSS) would help meet the requirements of delivering a 12/1 Mbps service with an ABHT of 300kbps for up to 200 000 end users.

It is also important to note that NBN Co is deploying the LTSS to integrate with its fibre and fixed wireless networks. In this context, NBN Co has indicated there is a clear benefit in developing in-house expertise to harmonize the coordinated rollout of the three technologies.

(f)   Why has it taken more than 2 years to develop the project?

NBN Co has an objective of delivering fibre to the premises to 93 per cent of Australian premises and next-generation fixed wireless and satellite services to the remaining 7 per cent. NBN Co as a start-up company has commenced work concurrently on the fibre, wireless and satellite footprints.

On 7 September 2010, the Prime Minister announced that as the NBN is built, regional areas will be given priority to ensure they can more quickly overcome the 'digital divide' they currently experience. Fibre will be built in regional areas as a priority and NBN Co has brought forward the introduction of wireless and satellite services so that regional Australia can get access to better broadband as soon as possible.

On 1 July 2011, NBN Co announced the commercial launch of an interim satellite service which offers enhanced broadband services to eligible regional and remote end users, ahead of the commencement of the Long Term Satellite Service in 2015. This approach is consistent with the Statement of Expectations provided by the Government to NBN Co on 17 December 2010.

(g)   Can the Minister or NBN Co advise if NBN Co will provide government-subsidised satellite services to large multi-national enterprises?

The Long Term Satellite Service (LTSS) is designed to provide affordable, high-speed broadband to premises outside the fibre and wireless footprints. The Government intends that the LTSS will connect homes, small and medium enterprises, and community or government service organisations such as schools, hospitals, health clinics and councils.

(h)   What is the cost per user for the interim satellite service? How does this compare to commercially available services? Can the interim service be scaled with additional leased capacity on other satellites, if not, why not?

The Interim Satellite Service (ISS) is being offered at wholesale pricing consistent with NBN Co's uniform national wholesale pricing for a 12/1 Mbps service. This equates to a wholesale access cost of $24 per month.

As of November 2011, retail price plans from ISS retailers started from $29.00 per month.

Feedback from NBN Co indicates that there is not sufficient capacity available through current or soon to be launched satellite networks to effectively meet NBN Co requirements of delivering a 12/1 Mbps service with an ABHT of 300kbps for up to 200 000 end users.