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No Relief For People Stuck On Slower NBN, For Now

NBN won't commit to upgrading the technology of those with older connections.

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NBN Co won't commit to upgrading the technology of those stuck on older NBN services, but CEO Bill Morrow has indicated that if the costs come down, it is something the company might consider in the future.

Last month, NBN launched a new technology type called fibre-to-the-kerb, which offers higher speeds than the fibre-to-the-node technology millions of Australian homes have been hooked up to since the election of the Abbott-Turnbull government in 2013.

It is a newer technology that can provide higher speeds because more fibre cable is used. Instead of the fibre cable running to a "node" at the end of a street and using the existing copper line into every home from there, the fibre is taken right up to the kerb of a house and then uses the copper line.

The less of the copper line used, the higher the speed possible. Fibre-to-the-node (FttN) has been shown to have significant issues with download speeds achievable. NBN itself estimates that just 24% of homes on FttN will be able to get the top 100 megabits per second speed when the rollout is completed.

NBN announced that 1.5 million homes and businesses across Australia will get the newer fibre-to-the-kerb technology now over the next two years, but it will be only for those that don't currently have an NBN connection.

At the National Press Club on Tuesday, Morrow indicated NBN had no plans to upgrade those stuck on the older connections.

NBN CEO Bill Morrow: Our staff is very focused on seeing how they can reduce the costs of installing fibre-to-the-curb even further and improve processes so there is a shorter roll out time. MORE: https://t.co/ZqKMvfxkvy #newsday https://t.co/CCXwVPl4Eh

"[Fibre-to-the-kerb] is still more expensive and takes longer to do than the alternative technologies. We don't want to wait and we don't want end users to have to wait longer than they already are to be connected to the NBN," he told BuzzFeed News.

But Morrow said that it might be possible to expand the number of people on the newer technology if costs come down in the future.

"I make the commitment that our staff is very well focused on seeing how they can reduce those costs even further and improve the processes to where it is a shorter duration of time and maybe we will expand that technology as we go forward into the future," he said.

NBN has been funded by the government off-Budget, which means that it doesn't appear as a debt held by the government because NBN is expected to make a return to government. NBN is restructuring its pricing model for services and bandwidth sold to retailers in order to ensure people are getting the speeds they are promised and are paying for. Morrow indicated that despite this massive change, NBN wasn't in danger of going on-Budget for now.

"We recently did a massive, surprising structural shift and this actually gave more value to the retailers who have been passing on that value to the consumers and it comes at an expense to NBN's profit. There is no question. But it is still a modest profit that keeps it above that line of not being a loss because the fascinating thing about this company is that it is for profit but it is for social good," he said.

"I think the government has given us direction to keep that balance to where it is just a modest profit, where it is a user-pays model, which means it is not our taxpayer money that is a one-off subsidy given to this company, like it is in a lot of other countries, but it is a very modest, low-level profit.

"So we are not in any danger of falling below the threshold that we need be to be considered a for-profit company."

Morrow will leave his job as CEO of NBN Co at the end of this year.

Josh Taylor is a Senior Reporter for BuzzFeed News and is based in Sydney.

Contact Josh Taylor at josh.taylor@buzzfeed.com.

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