NBN delivery leaves public wanting more

It took a series of frustrating games of League of Legends for Stephen Cornish to decide to sell his house and build a mobile tower.

Being as it is a team-based, online computer game, League of Legends is often only as playable as the quality of the internet connection will permit.

If you’re unlucky enough to be playing in Australia, where average download speeds top just 55 megabytes per second, you may find yourself precluded from being able to participate in a game that has attracted 8 million enthusiasts.

So, when Mr Cornish found playing the game to be a chore and commercial options for a better internet connection non-existent, he decided to buy internet bandwidth wholesale and build his own network instead.

“I connected some houses to it, it worked, and I ended up getting more and more enquiries,” Mr Cornish told Business News.

Mr Cornish’s solution – a mobile tower utilising fixed wireless technology – worked, providing him with internet speeds of up to a gigabit per second.

He was soon inundated with requests to piggyback off his tower.

The drawback, though, was that the nature of fixed wireless technology meant users needed to be in sight of the tower to use its internet.

The solution was simple, Mr Cornish said: build more towers.

“More towers equals more customers, so we kept recapitalising and expanding,” he said.

That was about four years ago.

Today, Mr Cornish has about 40 towers across Western Australia, providing coverage to approximately 80 per cent of premises in the Perth metropolitan area under the banner of his own internet service provider, Pentanet.

Interest in the company has grown in that time, given Perth’s isolation and scattered population lends itself to imperfect internet access (the company’s high-profile sponsorship of the Perth Wildcats hasn’t hurt, either).

Back in the mid-2010s, however, Mr Cornish heard a familiar refrain as he went door to door extolling the value of fixed wireless coverage to punters unfamiliar with internet jargon.

“Everyone is subjected to NBN [National Broadband Network] … all they know about the internet is that they’ve got to wait for NBN,” he said.

“Whatever NBN will be delivering, that’s their destiny.”

That’s still largely the case.

The NBN has dominated the public’s attention since 2007, when the Australian Labor Party was elected after a promise to install the nation’s first comprehensive internet infrastructure.

Today, a staggering 7.5 million homes and businesses across Australia are connected to the internet through the NBN, with providers big and small, from Telstra to Pentanet, offering plans through the network.

And while competitors have emerged, with mobile service provider Vodafone confirming in May it would build its own fixed-wireless, 5G network, NBN chief executive Stephen Rue insists the network will be fit for competition.

However, many users have been left with access to a fixed-line network that, across its 11-year lifespan, has undergone so many changes it has left Australia ranking below small European nations, including Bulgaria, Estonia and Moldova, on measures of average internet speed.

Many individuals who live in built-up, urban areas are still able to access internet download speeds far above the global average through their mobile carriers.

The reality for a large, sparsely populated country like Australia, though, is that plans provided through the NBN are often the only way many businesses can access the internet.

And while the network can in some places handle download speeds of up to 89mbps, the infrastructure itself – a hodgepodge of connections with widely varying capabilities – means the political promise of the network delivering the same service to every Australian regardless of location has been difficult to achieve.

That’s without discussing the ubiquitous nature of the network itself.

“NBN is such a bold, entrenched brand,” Mr Cornish said.

“People just think the NBN is the NBN.

“All it is, is how you connect to a provider.”

The story of NBN’s market dominance is wrapped up in a decade of political arguments over cost and access.

Up until late in this century’s first decade, Telstra was one of few telecommunications providers with internet infrastructure available to rural areas.

For many private operators, laying down the requisite infrastructure was either cost prohibitive or too difficult, owing to the country’s geographic diversity and low population density.

When Labor won the 2007 federal election, then prime minister Kevin Rudd sought to address this issue in part by providing fibre-to-the-premises (FTTP) internet connection to more than nine in 10 households and businesses throughout the 2010s.

Political machinations involving regional independents Rob Oakeshott and Tony Windsor after the 2010 election, which had resulted in a hung parliament, cemented priority access for the regions, subsequent to providing supply to the ALP.

That meant while the rural NSW town of Armidale with its population of 25,000 became one of the first locations to receive NBN coverage, WA had to wait until the second rollout, when homes and businesses in Victoria Park, Geraldton and Mandurah received FTTP connection.

Rollout of FTTP technology was abruptly suspended in 2013 when the Liberal Party of Australia came to power and, citing a lack of demand to justify the cost, opted to pursue a mixed-use model that tied together a variety of connections under one network.

In shifting to supporting an array of node-based connections, the opportunity arose to recycle existing infrastructure, allowing for faster and better internet connections for users in the short term.

As a result, about 1.8 million, or fewer than 20 per cent of all homes and businesses, can now access FTTP internet, with about three out of four of those premises using it.

By comparison, 8.2 million homes and businesses can access other modes of internet, with just half of those premises using it.

Despite this, the network, which is now considered to have reached practical completion, has coped under strain, handling a total capacity of more than 16tbps at its peak in the first week of August of this year.

And with NBN Co offering internet service providers an additional 40 per cent capacity to support customer demand at the height of the COVID-19 pandemic, issues with internet access can often be a result of customers choosing to pay less rather than the network itself not meeting expectations.

“People have in their heads a particular price point in terms of downloads,” David Glance, director of the University of Western Australia’s centre for software practice, said.

“We’re right up there with other countries when you look at wireless and mobile speeds because it comes default with the plans.

“It’s not a technological limitation, it’s a commercial one.”

The federal government’s suite of recently announced network upgrades, coupled with plans to connect 300,000 additional homes to the network by 2023, appear to have been done in part to head off concerns about rising demand.

Those plans will bring the total cost of the NBN to approximately $56 billion, though, meaning either NBN Co may need to charge more for wholesale services (and eventually end users), or the federal government will have to sell the company or pursue a write-down.

Communications Minister Paul Fletcher has been noncommittal on whether he would pursue either move, while Mr Rue has previously stated that NBN Co is on track to recuperate costs by 2023.

Still, it is widely expected that NBN Co will eventually be privatised, with news that it had secured $6 billion in debt facilities in May indicating that lenders have confidence in the network’s future commercial viability.

All of which is to say nothing of the fact that the network has proven resilient to demand after much of the nation’s white-collar workforce moved online at the height of COVID-19.

However, the fact NBN Co may need to upgrade connections to more than 8 million premises in the next two years at a cost of $4.5 billion to taxpayers indicates that demand for speeds of up to one gigabit per second is coming (if it isn’t already here).

By all accounts, Mr Cornish and Pentanet appear primed to thrive should this situation come to bear.

Talks of the company listing on the ASX started as far back as March of this year, which, if true, could significantly widen the company’s access to capital and support further expansion.

And if the recent move to install former iiNet chief executive David Buckingham as chair is any indicator, the company’s ambitions are at least on par with its disruptive ISP forbearers.

Mr Cornish was non-committal when asked about Pentanet’s future plans, but candid in his belief that a self-operated fixed wireless network was well prepared to compete with the moving feast that is the NBN.

“When things get better and faster, we’ll be there at the cutting edge,” he said.