Boss defends NBN progress
Boss defends NBN progress

The head of the National Broadband Network insists the project is on track and is the best option for providing high-speed internet to a country as large as Australia.

Government-owned NBN Co chief executive Mike Quigley last week confirmed a nine-month delay to the roll-out of the network, a 3.9 per cent, or $1.4 billion increase in capital costs to $37.4 billion and a $3.2 billion surge in operating expenditure.

Federal Liberal MP and former Optus executive Paul Fletcher said Mr Quigley would have been sacked if he worked for the private sector rather than a monopoly utility.

Mr Quigley conceded that NBN Co had underestimated time and costs needed for compensation deals with telcos Telstra and Optus for using their assets and the migration of their customers to the network.

"I will absolutely say some things we underestimated in our original December 2010 corporate plan. There's some things we overestimated," he said on ABC TV's Inside Business.

"Those largely balance out."

The cost blow-outs also include an extra $1.5 billion because of Mr Quigley's decision to connect every household as it rolls out the network - whether they want the service or not - which he calls "build drops".

He rejected criticism saying while it was a more expensive investment now that would ultimately save money because it was a 30-year project.

"It's a bit like putting some solar heating on your roof," he said.

"There's an upfront cost, but then you're going to gain that in lower electricity bills over the long term."

The company says that after its big up-front investment, operating costs will be low and profit margins will be up to 70 per cent, but Mr Quigley says profit will not be its main objective.

"We'll be a heavily regulated monopoly utility and the reason for that is, most people would agree, that's the most efficient way to build a fixed line network in a country, a big big country such as Australia where you want uniform wholesale pricing."

The federal opposition says if it is elected next year it would either stop the project or radically change it through using different and cheaper fibre to the node technology.

"Of course it's always possible to change direction," Mr Quigley said.

"It's possible to stop things as they are running today so that's possible."

The NBN aims to provide internet speeds of up to 100 megabits (mbps) per second to 93 per cent of the population, with current average speeds barely 3 mbps.

Broadband internet in Australia is slower and more expensive than in most industrialised nations.

The West Australian

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