The ALP put the contract for an Australian broadband network to tender and received six submissions in total, including one from Telstra that was excluded for not complying with the application requirements.
The Telstra application was in fact a half-submission, doing its best to dance around the potential issue of structural separation, where the government would force Telstra to split its wholesale and retail arms into two businesses.
In the end though, none of the applications met the government's requirements. More of an issue was the timing - in the middle of 2009, the world had just hit the Global Financial Crisis, and none of the companies that had submitted a proposal could raise the necessary capital to fund the project.
What's more, the ALP discovered that, should it go ahead and build a Fibre-to-the-Node (FTTN) network - as was being pitched at the time as a more affordable approach to the NBN - it would end up having to pay Telstra between $15-20 billion in compensation to access the copper wires connecting the node to each home.
This fact more than anything else spurred the ALP to create its own solution to the issue of nationwide broadband, in the form of the NBN.
The NBN under the ALP
In April 2009, the Government formally announced its plans to bypass Telstra's copper network entirely by building a Fibre-to-the-Premises (FTTP) network, and supplementing it with additional fixed wireless and satellite services for remote customers.
July 2009 marked the start of the NBN with an initial Trial run being deployed in Tasmania. The following year work began on 5 mainland sites and an additional 14 were announced to begin later in 2010. In may of 2011 the first homes were able to use the newly connected broadband and by september 32,295 premises had working fiber optic broadband connections.
In March 2012, the NBN Co announced outlined the plans to construct the fibre network in over 1500 communities and past 3.5 million homes before June 2015. By June 2013 the NBN had passed by 207,500 homes, there was 70,100 active NBN services and 33,600 active fibre services.
Major Coalition reforms to the NBN
The 2013 Federal Election resulted in a Liberal/National Coalition that set in motion a strategic review of the ultimate Multiple-Technology-Mix (MTM) NBN. Instead of the unilateral FTTP across Australia the Coalition elected for a new more complicated strategy that would save them time and money, but would also compromise on the infrastructure.
The Labor government intended the National Broadband Network to be a high speed service that offered fast broadband at an affordable price to 90% of the Australian population. The party set up a number of subsidies that would see the cost of delivering broadband to remote areas of Australia shared across the entire service.
The Coalition were worried that this would push the expense of services in populated areas higher than they needed to be and would drive down the network's competitiveness. The Telecommunications Regulatory and Structural Reform paper released by the Coalition in December 2014 stated that "this is neither sustainable nor fair."
Under this plan the government will determine the best technology to deliver broadband for each individual suburb on a case by case basis.
The NBN under the former ALP government was such a comprehensive upgrade that when the roll out began it caused a drop in private investment of moderate-speed broadband connections like ADSL.
There was no intermediate development for a number of areas with very poor broadband as there was no chance for infrastructure developers to make their money back before a superior service was delivered.
These areas would simply have to wait for an NBN connection that could take years. This had a negative impact on the whole industry and contributed to the Coalition's goals to speed up the rollout up and deliver the NBN to areas with poor connections first.
The Coalition also intends to remove cross-subsidy arrangements for non-commercial areas like those connected by fixed wireless and satellite, and make the cost of broadband in those areas proportional to their infrastructure cost and transparent.
This will mean that populated areas will pay less for their broadband access and remote households will pay more.
Telstra, Optus and the ACCC
The NBN was initially conceived as a way to work around Telstra's monopoly of copper telecommunications infrastructure.
Yet as part of the NBN construction process, NBNCo and Telstra formed an agreement in 2011 that involved the leasing of Telstra exchanges, ducts and pipes and currently unused fibre infrastructure to the NBN.
This arrangement ensured that NBNCo would be the only wholesaler of fibre broadband in Australia, while getting Telstra to migrate its customers away from its copper network and onto the fibre one.
Similarly, an agreement with Optus worth about $800 million initially outlined that the telco would switch off its hybrid fibre coaxial (HFC) network and move to the NBN.
Both of these Agreements were amended early in December 2014. The coalition government, NBN Co and Telstra signed an 'equivalent' deal worth $11 billion, meaning Telstra will now transfer ownership of its copper infrastructure and HFC cables to NBN Co instead of decommissioning them. Optus will also give NBN Co its HFC cables instead of turning them off.
The Australian Competition and Consumer Commission(ACCC) signed off on both the initial deals, the amendments are yet to be approved.
