General frequently asked questions about NBN Co and the NBN

Following are a series of frequently asked questions in relation to NBN Co’s current operations, network plans and proposed services.

How does Definitive Agreement with Telstra assist the NBN rollout?
The agreement between NBN Co and Telstra commenced in early March 2012, improving NBN Co's business case and reducing our total cost to build the NBN. The agreement allows NBN Co to use Telstra’s infrastructure (including ducts, pits, exchanges, lead in conduits and dark fibre) to build the NBN efficiently, helping to minimise duplication as well as disruption to communities, while accelerating our capacity to ramp up the rollout of a high-speed broadband network to all Australians.

While NBN Co’s agreement with Telstra enhances the speed of network deployment, it also increases certainty on our costs. Furthermore, it means that NBN Co can focus on an accelerated migration of customers to the NBN.

When will NBN Co’s Corporate Plan be updated?
In line with the requirements of all Government Business Enterprises and in accordance with the Commonwealth Authorities and Companies Act 1997, NBN Co released its first three-year Corporate Plan in December 2010. This document sets out the key objectives and priorities for NBN Co for the three year period from 1 July 2010 to 30 June 2013.

NBN Co plans to provide the Shareholder Ministers with an updated Corporate Plan in May 2012. It is a matter for Government as to when this document will be released publicly.

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 telephone and internet service providers (TISPs). NBN Co released its wholesale prices in December 2010. More information is available on the NBN Co website in the Product and Pricing Overview.

Retail pricing and service offerings are 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.

Almost 40 telecommunications and internet service providers have signed NBN Co’s Wholesale Broadband Agreement which allows them to resell NBN products and services. A number of these have already been through the certification process to operate over the NBN and have released their retail plans and prices. Find out more.

What happens to the Universal Service Obligation under the NBN?
Please refer to the DBCDE website for information.

What is NBN Co's source of funding?
The NBN is being funded initially by equity funding from the Commonwealth. As outlined in the Corporate Plan, the projected Government equity requirement for the project is $27.5 billion. 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 is expected to promote improvements in service delivery and productivity in health and education. High speed broadband services are expected to 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 help 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.

What are the risks of NBN Co’s costs blowing out?
With the Definitive Agreement between NBN Co and Telstra having now commenced, NBN Co is in a better position to effectively manage costs and aims to provide tax payers with a return on their investment over the life of the NBN project.

Furthermore, 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.

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 fixed 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 likely 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 extended a request for proposals to the private sector to build certain telecommunications infrastructure. However, 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 telephone and internet service providers such as Telstra, Optus and a number of other companies will use to deliver retail services to consumers and businesses. NBN Co is committed to treating all retail service providers in a non-discriminatory way and to building a network that helps lower the barriers of market entry for new competitors. In this way, NBN Co 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.

The NBN is planned to be wholesale-only network which will provide the underlying broadband capability to all players on equivalent terms. NBN Co has worked closely with the Australian Competition & Consumer Commission (ACCC) to ensure that the company operates within an appropriate regulatory framework. NBN Co’s Wholesale Broadband Agreement is at the foundation of this.

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 with water, 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 currently supplying 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 with a battery backup unit installed maintain the battery so they can continue to make and receive calls during power outages.

Fibre-connected end users will need to have a phone service provided over the UNI-V port (on the network termination device) and use a traditional (unpowered) analogue phone in order for their telephone to continue to operate. That is, the ability to make calls during a power failure also depends on the service you choose from your service provider, as only services provided over the UNI-V port will be supported by battery backup. Even if the backup battery is functioning properly and charged, cordless and other mains powered devices that do not have their own backup batteries will not function if there is a power failure. More information is available in the NBN Co User Guide.

What were the factors taken into consideration in choosing the location for fibre rollout?
The First Release Sites were selected based on the need to find diverse housing, geographic and climatic conditions in which to test construction and rollout.

The ongoing selection of sites is based on logistic and engineering considerations and the need to build in an efficient and cost-effective way.

What about installation of cables and wiring?
When a home or business owner wishes to activate the connection and selects a telephone and internet service provider, NBN Co will install a Network Termination Device (NTD) inside each premise (house, apartment, business). This will be free of charge for a standard installation. The NTD has four data ports and two voice ports which can be used to connect customer equipment to the network.

It is possible to run most services over a Wi-Fi network; however, you may prefer to have cabled connections for things like internet TV (IPTV), and data and/or phone outlets. You can arrange for any cable installer registered with an Australian Communications and Media Authority accredited industry registrar to install these points.

For more information see our find a service provider page.

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.

Why are existing mobile networks inadequate for future broadband?
In all wireless networks, the bandwidth is shared between users. The actual speed experienced by the end user is 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 peak speeds wholesale 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. 

NBN Co is designing the NBN and its fixed wireless technology to be capable of delivering peak speeds of 12 Mbps to NBN Co’s wholesale customers (telephone and internet service providers) via fixed wireless; however, the final speed a retail customer and end user will experience will vary depending on numerous factors including:

• the service provider selected (including the quality of that service provider’s equipment, how that service provider designs its network to cater for multiple end users)
• which plan is purchased from that service provider
• the end user’s equipment, and
• the end-user’s in-premises connection.

How does NBN Co’s fixed wireless service work?
Australians who receive NBN’s fixed wireless will be among the first to experience the benefits of high speed broadband over the NBN.* The fixed wireless network is expected to be completed by 2015, five years ahead of the expected completion of the fibre network, and it will serve around four per cent of the population or approximately 500,000 premises including farms, homes and businesses. People in fixed wireless areas are expected to be able to sign up with internet service providers to use the NBN from the middle of 2012.

NBN’s fixed wireless network, which uses advanced technology commonly referred to as Long Term Evolution (LTE) or fourth generation (4G), is engineered to deliver services to a fixed number of premises within each coverage area. This means that the bandwidth per household is designed to be more consistent than mobile wireless, even in peak times of use. Unlike a mobile wireless service where speeds can be affected by the number of people moving into and out of the area, the speed available in a fixed wireless network is designed to remain relatively steady.

While NBN Co’s high-quality fixed wireless service is not a mobile service, it will use cellular technology to transmit signals to and from a small antenna fixed on the outside of a home or business, which is pointed directly towards the fixed wireless facility. NBN Co has designed each fixed wireless facility to serve a set number of premises, which permits greater consistency in the speed and quality of service that can be delivered to each home and business receiving the fixed wireless service. The actual speed and quality of that service will depend on factors including the in-premise connection and equipment, plans offered by internet service providers and how the internet service provider designs its network. NBN Co’s fixed wireless network is designed to offer internet service providers with wholesale access speeds of up to 12Mbps. This is comparable, and in some cases better, than that available in many urban areas that currently receive ADSL 2+ services. 12Mbps is an initial speed level, and NBN Co is currently planning for faster speeds to become available over the fixed wireless service at a later stage.

How is NBN Co building the fixed wireless network?
In order to provide access to reliable high speed broadband for all Australians, NBN Co works in consultation with local, state and federal governments to determine the most efficient and effective way to rollout the fixed wireless network. A key consideration in these decisions is the optimal network design to ensure all Australians have access to high speed broadband in the most prudent and cost effective way. NBN Co engineers take into account factors such as population density, geography and other network-specific considerations when defining rollout plans to ensure the NBN is delivered in the most sensible and practical manner.

Planning for the fixed wireless rollout is now underway and consultations have begun with local authorities and communities. To build the network, NBN Co will require the use of around 2300 sites nationwide with the priority on using existing telecommunications structures wherever possible. Only where there is a lack of suitable, available infrastructure, NBN Co will establish new sites to enable the delivery of consistent, high quality broadband. This would generally mean lodging a development application with the relevant authority and engaging with the local community.

If I am in a fixed wireless area, how will my home or business be connected to the NBN?
Our fixed wireless services are delivered by radio communications via antennas that transmit a signal direct to a small outdoor antenna attached to the premise.

NBN Co is a wholesale provider, which means that to connect a service you will to need to go through a retail company such as an internet service provider. Once fixed wireless becomes available in your area, you are encouraged to contact your internet service provider to order a service. The internet service provider will organise the installation of network equipment at your premises, which NBN Co will provide free of charge. A standard installation of this equipment at your premises will be free of charge. 

What satellite service is NBN Co operating?
NBN Co is currently operating its Interim Satellite Service (ISS) across mainland Australia and Tasmania and is available now to eligible homes and businesses. The ISS uses existing satellite capacity, the majority of which is accessed via the IP Star satellite with some limited capacity taken from the Optus satellite.

The NBN Interim Satellite Service offers wholesale speeds of up to 6Mbps download and 1Mbps upload* to internet service providers, which should be an improvement on the satellite services that  many Australians living in rural and remote areas experience today.

In 2015, NBN Co plans to launch its Long Term Satellite Service (LTSS) which will see two purpose-built satellites provide a 90 Gbps system capacity with load sharing and redundancy. Wholesale speeds offered to internet service providers over the LTSS will increase to up to 12Mbps download*.

The LTSS will serve around three percent of the nation's premises (up to 200,000) or those who live in the most isolated parts of Australia, including the outback and remote offshore territories such as Macquarie, Christmas, Cocos, Lord Howe and Norfolk Islands.

How fast is the LTSS compared to the ISS?
The LTSS will be designed to offer NBN Co’s retail services provider customers wholesale access speeds that are initially double the maximum downlink speeds of the ISS. It’s also estimated to be 12 times greater than entry level Australian Broadband Guarantee (ABG) satellite services. Speeds actually achieved by end users (as distinct from our wholesale customers) will depend on a number of factors including the quality of their equipment and in-premises connection, the broadband plans offered by their service provider and how their service provider designs its network to cater for multiple end users. The table below compares the difference in wholesale speeds between the LTSS and the ISS:

As well as the expected speed improvements, there are expected to be significant satellite capacity improvements, which we estimate will be 10 times that of the ISS on a per user basis.

This means the satellites are designed to allow retail service providers to offer higher monthly usage plans (GB per month) than currently available.

Why is the LTSS faster than the ISS?
It is primarily because it is a new satellite which utilises Ka-band as distinct from existing Ku-band. Therefore, the LTSS is expected to be more efficient and have higher capacity compared to the ISS.

The LTSS satellites are designed to be reserved solely for the NBN and its customers.

Furthermore, NBN Co plans to also use leading-edge ground equipment and acceleration techniques to maximise the performance of the LTSS.

What are the differences between satellite and fibre?
The signals travel at the speed of light just like they do over fibre. The main difference is the satellite signals have to travel a huge distance – to and from satellites positioned approximately 36,000 kilometres above the Earth.

As it takes approx 250 milliseconds (a quarter of a second) for signals to get to the satellite and back to Earth, applications such as online games that depend on instantaneous responses can be affected on the satellite service.

What will end users be able to do over the LTSS that they can’t do over ABG or the ISS?
There are expected to be technical improvements which may allow us to support higher-capacity services such as video conferencing. Also, the ISS is limited to eligible users such as individuals, small businesses and Indigenous groups with limited access to current services. The LTSS will be opened up to a wider range of users, such as those outside the fixed wireless and fibre footprint, and will be designed to support higher grade services. This will include remote schools and health clinics.

Under the ISS, broadband services are not available to schools, hospitals and government agencies. Will this change with the LTSS?
The ISS was set up as a transition from the ABG to the LTSS, and established with very similar eligibility criteria to the ABG. Under these criteria large businesses, state and federal government agencies were excluded. The LTSS is expected to have greater capacity. In addition, there are other satellite providers that we expect will continue to operate specialist services or private networks set up over existing systems. This situation may continue even after the NBN Co satellite launch.

Will the LTSS include a voice service?
Homes and businesses with the ISS and LTSS can use VoIP services, if supported by their service provider.

However unlike the fibre offering, the satellite terminating box inside a premises won’t have an active UNI-V (voice) port which is used to plug in a phone.

Subject to some limited exceptions, copper phone services will still be maintained in areas to be served by fixed wireless and satellite, so people generally have the option of retaining their existing phone service.

The Telecommunications Universal Service Management Agency (TUSMA) Agreement between the Government and Telstra provides for the delivery of the Universal Service Obligation for voice and payphone services and other public interest services as the telecommunications industry transitions to the National Broadband Network environment. The agreement with Telstra will be managed by TUSMA and aims to provide continued reasonable access to a standard telephone service (STS).

When will the LTSS satellites launch?
We expect the first one to launch early 2015 followed by the second one six months later.

How soon after the launch of the satellites will services become available for ordinary Australians?
Deployment of NBN Co’s LTSS is expected to occur in mid-2015 given the long lead time for satellite construction and the reservation of launch slots. We plan to construct the associated ground station systems in the interim period so that services over satellite should be available soon after launch.

*NBN Co is designing the NBN to be capable of delivering these speeds to NBN Co’s wholesale customers (internet service providers). Speeds actually achieved by retail customers (end users) will depend on a number of factors including the quality of their equipment and in-premises connection, the broadband plans offered by their service provider and how their service provider designs its network to cater for multiple end users.