Make or break for NBN in 2013 as federal election looms

With the National Broadband Network (NBN) four years old and the rollout firmly underway, 2013 is going to be the year NBN Co, the company charged with building the project, proves whether it’s up to the challenge of building one of Australia’s biggest infrastructure projects.

Some of the challenges on NBN Co’s plate in the new year include regulatory approvals, overcoming design difficulties and meeting a demanding installation deadline – all of this with the distraction of a federal election campaign that promises to be a bitter and vindictive affair.

There’s no denying the NBN’s progress so far has been slow to date and along the way NBN Co has had to deal with design difficulties, poor mapping data and excruciatingly slow access negotiations with Telstra. In fact, negotiations with the ACCC over the Special Access Undertaking (SAU) continue to drag on and are expected to be settled midway through next year.

Race against time?

While the regulatory issues drag on, there remains the civil engineering challenge of getting fibre in the ground. NBN Co’s amended 2012 business plan puts the project six months behind the projections that were made just two years earlier, with just over half the original 1.2 million premises expected to be passed by July 2013. As at the end of September, a third of the revised target of 660,000 for this financial year has been met, leaving 440,000 premises to be passed over the nine months to July 2013.

That’s a lot of premises, but as NBN Co’s contractors – Silcar and Service Stream – confidently pointed out at the recent NBN Realised conference it can be done and similar targets were met during pay TV rollouts in the 90s. Key to meeting construction targets will be delivering working designs to the contractors and so far NBN Co has lagged behind on this front, blaming the quality of data given to them by various providers.

NBN Co high command is confident that the design problems have been sufficiently overcome and with the plans now rolling out, keeping these designs flowing is going to be critical in 2013.

MDUs and uptake

While designing and rolling out the fibre are two challenges, connecting the customers remains of paramount concern. Also behind schedule are the contracts for the Multi Dwelling Unit (MDU) connections – connecting apartment blocks, industrial complexes and office towers to the fibre network.

NBN Co’s request for proposals for the MDUs closed in June 2011 and the delay in awarding contracts is going to hurt the take-up rates for the project, as people within office parks and unit blocks will simply not be able to connect. Failure to address this contractual delay is going to affect the project’s work flow and consequently construction costs as contractors will have to return later to complete works that pass apartment blocks and industrial parks.

Access to buildings is also going to be a challenge as negotiating with individual building owners will be cumbersome. However, building managers and landlords intent on disruption may want to note that both Mike Quigley and Communications Minister Stephen Conroy made it clear at the release of the 2012 business plan that “frustrated premises” will be on their own when the old copper telephone network is removed 18 months after NBN connections go live.

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