A Strategic Review of the National Broadband Network shows that the Coalition's plan for its own national broadband network will cost more than was estimated when the policy was released in April.
(Transcript from World News Australia Radio)
The Coalition's policy promised to give most Australians the option to connect to a 25 megabit per second network by 2016, but the review has found that is extremely unrealistic.
It has also found less than half of the country would have access to those speeds by 2016.
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The Strategic Review has recommended rolling out a mix of technologies, including fibre-to-the-premises, costing $11.5 billion more than the Coalition's original forecast.
It estimates a total cost of $41 billion rather than the $29.5 billion estimated by the coalition in April.
It forecasts that by 2019, speeds of up to 100 megabits per second will be available to more than two-thirds of Australian residents, and nine out of 10 Australians will have speeds exceeding 50 megabits per second.
It also says the current plan set up under Labor will miss its 2021 target by three years, and cost $73 billion - up from $43 billion - to complete.
Communications Minister Malcolm Turnbull says unit costs for the NBN are twice as much as forecast by Labor and burdened by inflated corporate costs based on unrealistic long term profit forecasts.
"Turning this project around is a formidable challenge but we are determined to complete the project as quickly as we can at the lowest possible cost to taxpayers and affordably for consumers. We are equally determined that in the roll-out of the NBN, the many Australians without adequate fixed-line broadband today, particularly in regional areas, receive top priority."
The review has recommended implementing a multi-technology approach which would save $32 billion.
These include fibre-to-the-premises technology recommended for up to 26 per cent of premises, fibre-to-the-node technology recommended for around 50 per cent of premises.
It also recommends hybrid fibre-coaxial technology recommended for up to 30 per cent of premises and satellite and wireless technology is recommended for around six per cent of premises.
Malcolm Turnbull says the monthly retail price to access the NBN will be cheaper if the recommendations are adopted as the project will cost less than Labor's plan.
"Despite the delays and disappointments, the concept of a National Broadband Network remains popular. Australians want universal access to high-quality broadband and so does the Government. But because of the misguided way the previous Government embarked on this project, as much as $15 billion has been unnecessarily spent to achieve this goal and those dollars cannot be recovered."
He says the Government would not pay any extra to NBN Co and that the extra funding will be borrowed.
The federal opposition's communications spokesman, Jason Clare, says the government's decision to not deliver on it promised broadband speeds is just another broken promise.
"We say welcome to the world of broken promises. Today is a day that this Government will rue for a very long time. The Abbott Government is breaking one of the most important and biggest promises that they made in the last election campaign. Now today we get a tawdry list of excuses from this Minister. Before the election they said, 'No surprises'. Well, today we get the worst of all surprises from this Government. Remember the words of this Prime Minister when he said, 'I don't intend on making promises I won't keep.' Well, he's just broken a whopper today."
Malcolm Turnbull says his original policy assumed NBN Co was doing better than it actually is.
Mr Turnbull says a cost benefit analysis of the economic and social returns from broadband and a review of the long-term regulation of the NBN Co will be delivered to the government by June next year.
He says after that a new corporate plan will be drawn up.
