National Broadband Network INFORMATION PACK

National Broadband Network INFORMATION PACK

Information pack Table of contents Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 About NBN Co About the National Broadband Network NBN Co Corporate Plan Health and safety Skills and training Local government planning Pre-planning and design Construction Consent process Service activation Greenfields Backhaul Community consultation Case studies Tasmania Frequently Asked Questions (FAQs) Contact details To find out more Glossary of terms Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

About NBN Co Who we are NBN Co is a Government Business Enterprise (GBE) formed in July 2009 to design, build and operate the National Broadband Network (NBN). The NBN will enable high speed broadband to be delivered to all Australian households, businesses and enterprises through a combination of fibre, wireless and satellite technology. NBN Co is committed to operating a wholesale, open access network and making its wholesale services available to Service Providers on nondiscriminatory terms. The company is wholly owned by the Australian Government through the shareholding of the Minister for Broadband, Communications and the Digital Economy and the Minister for Finance and Deregulation. Mike Quigley was announced as Executive Chairman to the NBN Co Board and Chief Executive Officer on 24 July 2009. Mike Quigley, CEO, NBN Co. A full structure of the board team and the executive team can be found on the NBN Co website, www.nbnco.com.au NBN Co s core values are: We are safe, disciplined and reliable and meet our commitments We engender trust and integrity and are known for this We are authentic, speak-up and involve both ourselves and others We are collaborative one team focused on outcomes We are flexible to fit our circumstances

Key objectives The Government has stated its broad objectives for NBN Co as follows: The new super-fast network will: Connect homes, schools and workplaces with optical fibre (fibre-to-thepremises or FTTP ), providing broadband services to Australians in urban and regional towns with speeds of up to 100 megabits per second (mbps) 100 times faster than those currently used by most people, extending to towns with a population of around 1,000 or more people; Use next-generation wireless and satellite technologies that will be able to deliver 12 mbps or more to people living in more remote parts of Australia; Provide fibre optic transmission links connecting cities, major regional centres and rural towns; Be Australia s first national wholesale-only, open access broadband network; Be built and operated on a commercial basis by a company established at arm s length from the Government and involve private sector investment; and Be expected to be rolled out, simultaneously, in metropolitan, regional and rural areas. - NBN Co Corporate Plan

Legislative framework NBN Co is a wholly-owned Commonwealth GBE, subject to the Commonwealth Authorities and Companies Act 1997 (CAC Act), the Corporations Act 2001 and the Governance Arrangements for Commonwealth Government Business Enterprises. The company maintains regular reporting to its Shareholder Ministers and as a GBE is publicly accountable and subject to Parliamentary scrutiny through Senate committees and audit by the Auditor General. In December 2010, the Australian Parliament passed the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010 which facilitates the separation of Telstra s wholesale and retail operations. Telstra, NBN Co and the Government reached a non-binding Heads of Agreement in relation to Telstra s structural separation in June 2010. It is anticipated that, among other things, this agreement will provide NBN Co with access to a range of Telstra s infrastructure, reducing the build cost for NBN Co. On 25 November 2010, the Minister for Broadband, Communications and the Digital Economy, Senator the Hon Stephen Conroy, introduced two bills into the Parliament to establish the regulatory framework for the ownership and operations of NBN Co, and the arrangements for the eventual sale of the Commonwealth s stake and to create new access, transparency and non-discrimination obligations relating to the supply of wholesale services by NBN Co. National Broadband Network Companies Bill 2010 (NBN Companies Bill) The key elements of the NBN Companies Bill presently being considered by the Parliament are those relating to: The operations of NBN Co, including NBN Co s wholesale nature, functional separation of NBN Co and divestiture of assets by NBN Co; NBN Co s ownership and control and arrangements for terminating Commonwealth ownership provisions and introducing an NBN Co sale scheme; NBN Co s reporting obligations if the Commonwealth sells down its stake in the company; and Anti-avoidance obligations that ensure that NBN Co continues to meet its obligations.

Telecommunications Legislation Amendment (National Broadband Network Access Arrangements) Bill 2010 (NBN Access Bill). The key elements of the NBN Access Bill being considered by Parliament are those relating to: Amending the Competition and Consumer Act 2010 (CCA) and the Telecommunications Act 1997 to: Introduce new access, transparency and non-discrimination obligations relating to the supply of NBN Co s wholesale services; Extend technical and open access obligations to owners of other fast broadband networks; Applying additional rules for the supply of services by NBN Co and transparency and non-discrimination requirements; and Amending the access regime in Part XIC of the CCA to reflect NBN Co s wholesale nature. Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

Overview of the National Broadband Network The NBN is an Australian Government initiative and represents one of the largest infrastructure projects undertaken in this country. The NBN will involve the laying of fibre optic cabling past approximately 93 per cent of Australian homes, schools and businesses, providing broadband services with initial speeds of up to 100 megabits per second (mbps), rising to 1 gigabit per second (gbps) in 2012, and with the capacity for further upgrades in the future.* The remaining premises will be connected via a combination of next-generation high speed wireless and satellite technologies delivering peak speeds of at least 12 mbps.** However, the speeds actually experienced by end-users will depend on a number of factors including the retail broadband plan they choose, their equipment and their in-premises connection. Construction of the rollout commenced in Tasmania in April 2010 and continued with five First Release Sites (FRS) on the mainland in August 2010. A further 19 Second Release Sites (SRS) on the mainland were announced in July 2010 along with the announcement of seven additional sites in Tasmania. The full volume rollout is expected to take approximately nine years to complete. Figure 1: 93% fibre + 7% wireless and satellite Cocos Island Christmas Island Figure 2: Rollout map - pilot sites FIRST RELEASE SITES SECOND RELEASE SITES Lord Howe Island Norfolk Island

At the height of the volume rollout, an estimated 6,000 premises will be passed per day. The network will enable Service Providers to offer products to endusers (customers) using the high speed broadband network. When the network is live, it will be up to the Service Providers to market to and liaise directly with customers, with NBN Co s business focused on maintaining a high quality universal wholesale network. * Speeds actually experienced will depend on a number of factors including retail broadband plan, equipment an in-premises connections. ** Speeds actually experienced will depend on a number of factors including retail broadband plan, equipment, in-premises connections, the location of the enduser, local conditions and the number of concurrent users. QUICK FACTS Rollout over approximately 9.5 years Fibre expected to pass 12 million premises when the rollout is complete Almost 6,000 premises forecast to be passed per day during peak rollout Projected contracted construction workforce of 15,000 to 20,000 Full Time Equivalents (FTEs) at the peak of construction Construction will be rolled out simultaneously in metropolitan, regional, and rural areas The NBN will be Australia s first national wholesale-only, open access broadband network Figure 3: NBN wholesale and retail business models Retail Retail service provider Retail service provider Retail service provider Retail service provider Wholesale Wholesaler/Aggregator Layer 2 Ethernet Access Network Wholesaler Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

NBN Co Corporate Plan Introduction Rollout of the National Broadband Network (NBN) is a key element of the Federal Government s plan to transform the Australian telecommunications market. The NBN will deliver a significant, once-in-a-generation restructuring of the industry while resolving the current infrastructure and investment bottlenecks that have seen Australia fall behind its international peers. The NBN will replace Australia s copper telephone network, which is reaching the limits of its capacity to provide the level and speed of services that Australians will demand. About the Corporate Plan NBN Co publicly released its Corporate Plan on 20 December 2010. The Corporate Plan details financial and operational information about the NBN, incorporating forecasts covering a 30-year period. Alongside the financial forecasts, the plan includes details on construction, network design and wholesale products to be offered over the NBN. The Corporate Plan, which assumes the successful conclusion of a deal with Telstra, demonstrates NBN Co s ability to realise the Government s policy of providing broadband throughout metropolitan, regional and rural Australia in a cost-effective and financially viable way. A key element outlined in the Corporate Plan is the expectation by NBN Co that it will generate an Internal Rate of Return of seven percent per annum - in excess of the Government s cost of funds, or longterm bond rate. This assessment of the financial return to Government takes no account of the broader productivity and community benefits of the project. Another key element outlined in the plan is the competitive pricing for wholesale broadband including a basic service offering with a download speed of 12/1 megabits per second (mbps) at a uniform national wholesale access price of $24 a month. As outlined in the Corporate Plan, the NBN will connect 93 percent of homes, schools and workplaces with optical fibre delivering broadband services with speeds of up to 1 gigabit per second. The network will cover the remaining seven percent of premises with a combination of wireless and satellite services with peak speeds up to 12 mbps. The speeds actually experienced by end-users will depend on a number of factors including the retail broadband plan they choose, their equipment and their in-premises connection.

Below is a summary of the key elements of the NBN outlined in the Corporate Plan. Further detail on the Corporate Plan is available on the NBN Co website at www.nbnco.com.au Key points Internal rate of return forecast at seven percent p.a. Uniform national wholesale access price for 12/1 mbps basic service of $24/month Government Equity requirement $27.5bn Total capital expenditure to the end of the construction period is forecast at $35.9 billion. Total operational expenditure net of revenue over the same period is $1.0 billion. NBN Co to seek funding from capital markets from FY2015 Network construction to take nine-and-a-half years with rollout to reach peak of 5,900 premises a day during construction Pricing Pricing information is set out in the plan for the variety of wholesale products NBN Co intends to offer. The entry-level offer comprises a 12 mbps downstream and 1 mbps upstream service for a wholesale access price of $24 per month. As well as the access charge there will be a capacity charge for the shared resource between the premises and the point of interconnect. This charge is shared across many end-users on the Service Provider s service and will add around $1 for end-users based on average data rates. All prices for specific individual wholesale products fall in real and nominal terms over time.

Figure 1: NBN Co wholesale products pricing Downstream / Upstream / Fibre Wireless Satellite (PIR Mbps) (PIR Mbps) 12 1 $24* $24 $24 25 5 $27 - - 25 10 $30 - - 50 20 $34 - - 100 40 $38 - - 250 100 $70 - - 500 200 $100 - - 1000 400 $150 - - Revenue NBN Co s revenue plan is built based on assessments of the addressable market, products and pricing, expected take up of the basic services and speed and usage profiles. NBN Co s assessment of future speed and data usage is based on a balanced assessment of past trends and industry s future expectations. Data usage and market expectations for download speeds have steadily increased over the past two decades and there is no reason to expect that trend will suddenly change. NBN Co has assumed that 70 percent of premises passed by the network will take up a service. This figure takes into account an estimated 12 percent of premises being unoccupied, 13 percent using wireless products and 5 percent using other existing fixed line networks. $ Billion (Nominal Dollars) $ 8.0 $ 7.0 $ 6.0 $ 5.0 $ 4.0 $ 3.0 $ 2.0 $ 1.0 $ 0.0 Figure 2: Revenues and opex $ 2.7 Revenues Opex Cost Established Network Operations $ 0.4 Opex Overhead $ 0.4 FY2011 FY2013 FY2015 FY2017 FY2019 FY2021 FY2023 FY2025 $ 5.8 $ 7.6 $ 2.0

Capital and operational expenditure Total capital expenditure to the end of the construction period is forecast at $35.9 billion. Total operational expenditure net of revenue over the same period is $1.0 billion. Figure 3: Capital expenditure $35.9 billion to December 2020 Funding Funding for this important national infrastructure project will initially come from the Government, which will contribute equity of $27.5 billion. However, this will be paid back with a return over the life of the project. Other funding will come from operational earnings and private debt. From FY2015 NBN Co will begin raising funds through capital markets. NBN Co expects that it will be a top tier major Australian debt issuer and a significant proportion of funding will likely come from overseas investors. The quantum of debt to be raised from project finance or financial markets is estimated to be $13.4 billion. Together the equity and debt funding add to a total funding requirement of $40.9 billion including funding costs.

Network design and construction Over the 9.5 year construction period, NBN Co plans to build or lease 121 Points of Interconnect (PoI) and 980 Fibre Serving Areas (FSAs). The NBN will cover 13 million premises by 2021 and involve installing 181,000km of gigabit-capable Passive Optical Network (GPON) and 57,000km of transit fibre. NBN Co will also pass all greenfields developments by the end of deployment, representing some 2 million premises in the fibre footprint. Deployment of the NBN is planned to take place concurrently across multiple rollout regions. NBN Co is already constructing five First Release Sites on the mainland, and has announced the locations of 19 further Second Release Sites. Agreement with Telstra The Business Case is based on the assumption that a deal is finalised and approved between NBN Co and Telstra Corp following the signing of a Financial Heads of Agreement in June 2010. Key benefits of a binding agreement include: Progressive disconnection of copper and Hybrid-Fibre Coaxial (HFC) services and decommissioning and deactivation of Telstra s copper and HFC networks as the Fibre-to-the- Premises network is rolled out ; Utilisation of existing Telstra exchange space; Utilisation of a significant volume of Telstra s existing ducts and conduits; and Access to dark fibre and managed services for backhaul. Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

Health and safety Overview of health and safety at NBN Co NBN Co strives to ensure that health and safety is considered above all other company business considerations, recognising that good safety is good business. The importance of health and safety is recognised in the NBN Co Corporate Plan and the organisation continually identifies, assesses, evaluates and controls health and safety risks in the workplace. This includes the use of a risk management system to ensure that all applicable legislative requirements, industry standards and external accreditation obligations are met. NBN Co strives to achieve excellence in its handling and management of health and safety. Traffic management in Kiama, New South Wales, one of the First Release Sites. To achieve this NBN Co will work towards continual improvement, establishing Occupational Health and Safety (OH&S) objectives and targets aimed at effectively managing risk exposures. NBN Co is committed to: Strong leadership and accountability in setting the health and safety direction, and establishing measureable targets and objectives; Providing the required resources to support the implementation of the NBN Co Health and Safety Policy; Ensuring that systems are in place to implement risk management processes to ensure hazards are properly identified, risks assessed and effectively controlled (including a monitoring and review process); Effectively managing health and safety, including via the development and implementation of safe systems of work and ongoing supervision; and Providing all necessary training and induction, instruction and information to employees and visitors on our sites to ensure their health and safety.

Our approach to health and safety is based on a culture of open communication, fostered consultation, effective risk management and the provision of information at all levels of the organisation. Health and safety framework The nature of construction activities exposes NBN Co employees and contractors to a variety of risks, particularly across power and communications corridors for aerial deployment. Safety is also the number one priority for the Construction Group within NBN Co, with appropriate mitigation plans and a framework developed to ensure achievement of Health, Safety and Environment (HSE) Key Performance Indicators (KPIs). NBN Co will work collaboratively with utility companies and construction partners to ensure that best practice HSE policies are implemented, monitored and enforced throughout all aspects of the construction process. A manager for Construction HSE has been appointed with responsibility for establishing the HSE framework for the Construction Group by defining standards and benchmarks for internal and external HSE performance. The manager is also responsible for establishing the HSE team that will influence and drive a positive risk management culture within the Construction Group. The Construction Group framework will be fully aligned with applicable legal and regulatory requirements as well as NBN Co enterprise-wide policies, procedures and performance objectives. HSE criteria have been established and defined to guide the HSE team in the evaluation and selection of external suppliers, ensuring their proposed processes and systems are consistent with HSE performance expectations and accreditation requirements. The HSE Team typically interacts across several functions including Procurement, Government Relations and External Affairs, Chief Technical Officer, Network Operations and Construction Contractors. The Construction HSE team is involved in the development and design of NBN Co Group HSE systems to ensure that the Construction Group s requirements are considered and incorporated into the NBN Co company-wide framework. NBN Co has established a functional safety team structure to directly support the CEO, Chief Human Relations Officer and relevant Heads of Department to meet their safety accountabilities. This structure is presented overleaf in Figure 1:

Figure 1 NBN Co HSE framework Exhibit 6.4: NBN Co HSE Framework NBN Co Board Establish National HSE Policies General Manager HSE National HSE Programs Manager Establish contractors policies, procedures and reporting requirements Establish rigorous monitoring (compliance) and reporting framework Independent Audit Individual Projects Compliance Programme Visible processes Hard audit Occurrence reporting framework Contractors Sub-Contractors NBN Co Field Staff Source: NBN Co The Construction HSE team will continue to expand on its supplier / employees framework so that risks are mitigated as internal and external resources and works increase. The following principles summarise the HSE approach: HSE criteria will be given a high priority in the assessment and selection of relevant contractors; A skilled and qualified HSE Team will be built to support process compliance and risk mitigation; Engage specialist resources to input into the safety in design process so that safety requirements are factored into product definition; Develop, refine and maintain the HSE framework and standards; Monitor 10 HSE Gates prior to site construct activities being undertaken;

Coordinate HSE training and certification of NBN Co staff and contractors; Conduct regular safety / environmental audits; Establish an escalation process for HSE incidents; Risk assessments and safety audits of construction activity; Analysis and reporting for HSE performance; Coordinate the supply and deployment of Personal Protection Equipment (PPE) to NBN Co staff; and Benchmarking and best practice assessment for HSE. The key output is a safe working environment for all NBN Co construction staff and contractors with the goal of no blame. Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

Skills and training Workforce Development Strategy Overview Ensuring a suitably qualified and skilled workforce is used to construct the National Broadband Network (NBN) is critical to ensuring the quality of the network, timely achievement of milestones and to mitigate risk. NBN Co is developing a Workforce Development Strategy to address this, and is working to: Identify the national supply of appropriately skilled resources compared with the demand for these resources, and therefore what potential gaps exist that will require the training of further resources; Define the relevant training programs and qualifications required, in order to ensure the availability of trainers and funding sources to support the development of skills and capabilities; and Gain assurance that the workforce engaged on the NBN has the required skills and qualifications. The Workforce Development Strategy will place paramount importance on workplace safety and support the creation of sustainable and skilled jobs for Australia. Workforce modelling and planning The NBN will be rolled out in partnership with contractors who will be required to have detailed local industry engagement plans and programs to ensure that a suitably skilled workforce is in place to construct the NBN. NBN Co values contractors that have a demonstrated commitment to adding and / or retaining trainees and apprentices. Use of existing pit in Brunswick, Victoria, one of the First Release Sites.

NBN Co is working with the Federal and state governments and other stakeholders to forecast labour demand in connection with the rollout of the NBN and is assisting in the preparation of strategies to address those requirements. Training In addition to any occupational licences and qualifications, NBN Co intends to require individuals to undertake specific training if they are to perform work on the NBN. These skills could include additional safety training, for example fibre safety awareness, and product training, such as product installation. NBN Co is working with the Federal, state and territory governments, industry skills councils and construction contractors to identify and address the training requirements that will arise from the NBN rollout. The national scale of the project, with simultaneous demands for skilled labour across every state and territory, will require a national approach that supports targeted, local arrangements. Indigenous training and employment NBN Co will require successful contractors to have detailed indigenous employment plans and programs. NBN Co values contractors that show a commitment to promoting employment and training opportunities for indigenous Australians in regions where significant indigenous populations exist. Skills assurance NBN Co is proposing to implement a system of audits to check that individual workers hold all required licences and qualifications. Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

Local government planning Introduction The National Broadband Network (NBN) is a key priority for the Commonwealth Government. NBN Co Limited (NBN Co), the company set up to build and operate the wholesale network, is planning to facilitate the rollout of the network through positive engagement with local communities. To assist in creating a platform for the delivery of high speed broadband to families and businesses, particularly where fibre deployments are planned in rural and regional Australia, NBN Co is seeking assistance from local governments to expedite the rollout whilst protecting amenities. The Telecommunications Act 1997 and the related Telecommunications (Low-impact Facilities) Determination 1997 (LIFD 1997) establishes a broad framework for the installation, operation and maintenance of certain low impact telecommunication facilities. The legislation includes a number of powers and immunities that make a range of telecommunication facilities exempt from some local planning controls and other laws. One of the key requirements for these exemptions is that the facilities must not be located in an area of environmental significance. To fall within the exemptions, some facilities are subject to certain design and other specifications and some notification processes also need to be followed. Not all of the facilities that NBN Co will be installing are currently low impact facilities under LIFD 1997. NBN Co is also seeking the assistance of state and territory governments and local councils to facilitate the rollout in the context of Federal, state or local government requirements. A construction manager in Brunswick, Victoria, one of the First Release Sites.

Council checklist The following checklist provides a guide for local councils as to the information NBN Co and its contractors / agents may need to assist in the NBN planning process. As demonstrated by the rollout in Tasmania, and the five First Release Sites (FRS) on the mainland, NBN Co is committed to working closely with local government on the design and deployment of the NBN in their area, ensuring a lasting positive legacy for the local community. Zoning maps and planning controls 3 Identification and location of heritage conservation areas and / or heritage items (both indigenous and non-indigenous) Location of environmentally significant areas e.g. conservation / protected areas, national parks / nature reserves, wetlands, bushland, significant street trees Any specific local planning controls, policies or codes that may apply specifically to telecommunication facilities Confirmation of any local exemptions, restrictions or prohibitions for telecommunication facilities Development application requirements (if necessary), including likely timeframes, processes etc. 3 3 3 3 3 Location of Commonwealth land and education, health or government facilities 3 Location of major development proposals and areas (e.g. greenfield sites), major infrastructure locations or areas that require major upgrades to infrastructure 3 Councils may also be keen to work with NBN Co and its contractors / agents to enter agreements to rent facilities that could be used during the rollout, such as depots, warehouses, temporary site offices, shopfront information offices etc. In that case, councils could provide some indication of properties that might be useful for the above purposes.

Council collaboration NBN Co will be working very closely with local government in the communication effort in connection with the NBN. We see local government as playing a unique and critical role in both informing NBN Co about potential local issues and requirements and assisting in the development and dissemination of community education and publicity. Below is a list of some of the types of activities in relation to which NBN Co would like to involve various areas in local councils. COUNCIL STAKEHOLDER GROUP Mayor and CEO Corporate services ACTIVITY Media opportunities and communication of NBN related information, including direct communications Planning, data, infrastructure development COMMENTS Assist in identifying stakeholders, associations, community and business groups, champions etc. Provide advice on legacy issues Assist in identifying local opportunities for communication channels (events / festivals markets) Assistance with opt-in consent program (where implemented) Briefs to council Planning Development approvals Heritage, environmental, native vegetation Statutory and structure planning Greenfield developments Infrastructure projects Council civil works Forward scheduling of works Road closures and traffic management Notifications GIS Officer Access to council GIS data and overlays Economic development Table continued on the next page

Table continued from the previous page COUNCIL STAKEHOLDER GROUP Corporate services Media and communications Library ACTIVITY Planning, data, infrastructure development Media and marketing opportunities Collateral and venue hire COMMENTS Local opportunities (events / festivals markets) Speaking and promotional opportunities Opt-in consent program (where implemented) Databases Rates database (property owners) Stakeholders and business groups contacts Health, education and emergency services contacts Media releases Photo opportunities Information flow (internal council and community) Media channels Legacy issues (previous infrastructure projects) Local media opportunities (events / festivals markets) Opt in consent program (where implemented) Translation and storyboarding assistance Storyboards and static displays Community information sessions / briefings Community health (aged care) As above Translation and storyboarding assistance Effective engagement strategies Storyboards and displays Community information sessions Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

Pre-planning and design Introduction NBN Co intends to offer Layer 2 bitstream products on an open access wholesale basis in order to create the opportunity for access seekers to sell wholesale services to other Retail Service Providers and retail services directly to consumers. Points of Interconnect Following a recommendation in late 2010 by the Australian Competition and Consumer Commission (ACCC), the Federal Government indicated that it expects that NBN Co will ensure that its Points of Interconnect (Pols) are located in accordance with the competition criteria formulated by the ACCC. There will be 121 PoIs for Access Seekers to connect to the NBN Co wholesale network in order to provide retail services. A PoI is a location where traffic can be exchanged between one network and another. In the copper based network, local exchanges in each Exchange Service Area (ESA) operate as potential locations for Access Seekers to install their own equipment to provide retail services. Currently, around 550 exchanges operate as service delivery points for Access Seekers. In the National Broadband Network (NBN) context, copper ESAs will be replaced by Fibre Serving Areas (FSAs). There will be significantly fewer FSAs (700-1,000) than ESAs (5,000). This is driven both by technology differences (greater fibre length for GPON network) and the fact that NBN Co s fibre network will cover 93 percent of premises, which overlays approximately 1,900 of today s ESAs. Hauling fibre in Brunswick, Victoria, one of the First Release Sites.

Figure 1 Pols End-User Premises Hub Point of Interconnect NTV FIBRE NTV SATELLITE ACCESS SEEKER BACKHAUL ACCESS SEEKER POP NTV WIRELESS Network architecture The NBN will be built in a modular arrangement. This model as shown in figure below is then effectively replicated across the entire network as seen below. Figure 2 Network modular design Overview of network elements The figure below provides an illustrative representation of the typical network elements included in the network design. Note final design is still subject to amendment.

DWDM NATIONAL BROADBAND NETWORK Service Provider backhaul fibre is connected to an Aggregation Node (AN) facility, which connects via the Transit Network to all of the Fibre Access Nodes (FANs) in its Access Aggregation Region. A FSA is the area that can be serviced by a FAN. Within a FSA there will be a number of Fibre Serving Area Modules (FSAM). For the purpose of an individual FSAM, a summary of the relationship between the various network elements can be described as follows: The FAN connects to a series of Fibre Distribution Hubs (FDH) via a network of distribution fibre; Each FDH can service up to 200 premises, which are connected to the FDH using a network of local fibre from an internal or external Network Termination Device (NTD) fitted to each premises; and For multi dwelling units multiple fibres are provided to a central point on the building. From this point connections to individual units within a building will be completed by fitting the building with internal fibre. Figure 3 Physical infrastructure representation NBNCo Level 1 Projects Schematic 5 Customer Active Equipment & MDUs 4 Lead-Ins 3 Local Network 2 Distribution Network 1 Transition Network RSPs Premises NTD Aerial Lead-in (LI) FlexNAP Underground Distribution Point Aerial Fibre Network (FDH) Fibre Distribution Hub (FAN) Fibre Access Node OLT DWDM (AN) Aggregation Node Ducted Fibre Ducted Fibre Ducted Fibre Ducted & Buried Network Termination Device (NTD) Underground Lead-in Underground Local Fibre Network Pit Pit Manholes Fibre Level 1 Projects Customer Connections Volume Access Network Build Transit Network Build Network Node Build Network elements Aerial cabling (colocated) NBN Co will install underground cabling wherever useable existing ducting is located. However, we expect some 25 percent of the NBN fibre to be rolled out above ground (aerial). Where aerial cabling is required, it is planned that the cabling will be strung from existing electricity infrastructure poles. No new poles will be installed by NBN Co as part of the rollout project. The cable is a passive fibre optic cable that does not conduct any form of electrical current or emit any electromagnetic radiation. The cable is black finish and only slightly larger in diameter than the existing low voltage electricity cable that can be seen in the streets.

The figure below illustrates a typical connection method for aerial cabling and its location on the pole within the low and high voltage power corridor. Figure 4 Location of local optic-fibre connection on existing poles Hybrid fibre-coaxial The rollout of Pay TV hybrid fibre-coaxial (HFC) in the mid 1990 s occurred throughout Australian mainland capital cities. NBN Co understands that the rollout of the optic fibre network has been compared to the rollout of HFC, which in some areas of Australia was viewed unfavourably. To avoid confusion with the HFC rollout the following information is provided.

Network technology services and performance aside, the main differences between HFC and NBN Co fibre network include: Cable thickness - the HFC bundle is approximately 100 mm in diameter compared to the NBN Co fibre which is less than 30 mm in diameter (the diameter of the NBN Co fibre will vary according to the technical requirements for the release area however, the fibre will be less in diameter than a HFC bundle); The HFC cable requires a metallic support cable called a catenary, while the NBN Co fibre is selfsupporting. Additionally, the HFC cable has conductive components while the NBN Co fibre is nonconductive and insulated. This means NBN Co can safely install the fibre closer to the electricity cables in the low and high voltage electricity corridor, to assist in reducing visual impacts; and The HFC network requires large pieces of equipment (e.g. a power supply) to be installed adjacent to the poles. It also requires amplifiers to be mounted on the strand. NBN Co fibre only requires a multiport terminal (a multiport terminal is a compact, non-conductive block that will be mounted onto utility poles that will permit the aerial cabling to be attached into the terminal). Premises connection The connection to an end-user is achieved with a single fibre drop cable pre-terminated on one end with an environmentally hardened connector installed between the multiport (located in a pit, generally in the footpath near the property) and the end-user premises. For aerial installation the drop cable will usually be installed in the same manner as the existing AC power services. Underground installation will use a conduit that extends from the pit to the premises. Depending on the type of installation the drop cable is either connected directly into the NTD or, if the NTD is not installed at the same time, a Premises Connection Device (PCD) will be located on the outside of the premises and the cable left coiled within it. Where there is a PCD and the NTD is to be installed internally, there will be a fibre cable installed between the internal NTD location and the PCD. Fibre access node A FAN is an above ground structure that houses the active equipment to provide services to the FSA. Due to the size of the building and availability of land for placement the installation of a FAN is likely to be located on existing infrastructure sites such as Telstra exchanges, or within the Telstra exchange.

Where a FAN facility cannot be located within an existing Telstra exchange a new FAN facility would be required. The figure below shows a possible FAN facility design. The FAN facility outlined in the figure would require a land size of approximately 16 metres by 17 metres including a generator and cooling system. A FAN is capable of servicing up to 36,000 premises, depending on the population density. Figure 5 Potential design of a FAN facility Mix of technologies The NBN will comprise three major technologies: Fibre (approximately 93 percent coverage); and Fixed wireless and satellite (approximately seven percent coverage). Fibre The bulk of the fibre rollout is expected to be underground utilising Telstra ducts and pits provided agreement can be reached with Telstra. It is hoped that negotiations about this can to be finalised and approved by Telstra shareholders during 2011. The remainder of the fibre rollout will be achieved via aerial cabling, colocated with existing electricity distribution networks.

Fixed wireless and satellite Approximately seven percent of premises will be serviced by a fixed wireless or satellite solution. NBN Co is presently considering options in terms of frequencies and infrastructure. Fixed wireless If you receive a fixed wireless service via the NBN, transmission will be provided wirelessly from a wireless base station. NBN Co s wireless solution will not be designed to allow users to continue to use the service while moving from one wireless base station to another (that is, the service will not include inter-cell handoff). It does not mean you will receive services over mobile broadband. Fixed wireless broadband delivers services to a specific location such as a home or business, rather than to a device that moves from place to place. In contrast, mobile broadband solutions generally deliver services to devices as they move from one base station to another. Unlike mobile broadband, the NBN Co fixed wireless solution is not impacted by a variable number of users on the network. Fixed wireless networks are engineered to meet the speed and service requirements for a known number of users in the coverage area, which means that the bandwidth per head and speed experienced can be much more consistent and stable, even in peak times of use. Mobile wireless networks are engineered for a larger number of users who move around. The available bandwidth must be shared between the variable number of users served by a tower at a particular time, which means speeds will vary based on a number of factors, including distance and the number of people using the service at the same time. The result is a less consistent broadband service, especially in times of peak use. Satellite NBN Co is planning to launch two 80 gigabits per second next-generation Ka band satellites. The broadband access services available over satellite are designed to provide peak download speeds of 12 megabits per second - similar to those that many city people currently experience. However, the speeds that end-users will experience will depend on a number of factors including the plan they choose, their equipment and their in-premises connection. NBN Co s next-generation satellites will be purpose-built to provide high speed broadband for the Australian population, and not splitting capacity between a number of other tasks like satellite phones and broadcast television, nor focused on providing services in other countries. The NBN Co satellites will have multiple focussed high capacity beams that are designed to maximise spectral efficiency. NBN Co will also use currently leading edge

ground equipment and acceleration techniques to maximise performance. NBN Co s satellite network will require about 10 gateway sites across Australia, likely to be located in remote areas of WA, SA, VIC and / or NSW to avoid areas of high population density and heavy rainfall in NT, QLD, TAS. Their exact location will be determined by the capability of the vendors equipment and NBN Co planning and design. Contact Phone 1800 881 816 Website www.nbnco.com.au Email info@nbnco.com.au

Construction Construction of the National Broadband Network (NBN) involves both construction of the network in public streets and work to connect individual premises (and related private land) to make those premises NBN ready. In public streets, works include all activities required to install optical fibre cables and related equipment (either underground or overhead). To minimise the need for any trenching or other digging in streets, NBN Co plans to use existing ducts and power poles wherever practical. To connect individual premises, construction work includes the installation of optical fibre cables (either underground or overhead) from the street to equipment fixed on the outside of the premises. NBN Co strives to minimise construction impacts on the community and will have visibility of contractor on-site activities to make sure construction impacts are minimised and local communities are kept properly informed for the duration of the rollout. Every effort will be made to notify residents and other stakeholders in advance of all scheduled construction works. This will include holding community information sessions, where appropriate, prior to the commencement of construction to provide specific details about the local rollout. We will also provide information to local residents about the method of construction (underground or overhead) prior to starting work. Quick construction facts Rollout over approximately 9.5 years Fibre expected to pass 12 million premises when the rollout is complete Almost 6,000 premises forecast to be passed per day during peak rollout Projected contracted construction workforce of 15,000 to 20,000 Full Time Equivalents (FTEs) at the peak of construction Construction will be rolled out simultaneously in metropolitan, regional and rural areas It will be Australia s first national wholesale-only, open access broadband network

The image below provides an overview of the typical network equipment used in the rollout of the NBN. Please note that final network architecture is subject to design changes. What will the Figure network 1: What will the look network look like? 1 INDIVIDUAL PROPERTIES CONNECT TO A GRID NETWORK Residential homes The Optical Network Termination (ONT) on each individual property can be connected to the network in two ways: Multi dwelling units Each apartment will connect via a fibre connection to a Optical Network Termination (ONT) situated in each apartment. Key Overhead option Underground option RSP BACKHAUL Example of an overhead cable. Example of an overhead cable. 5 ONT Example of an underground cable. Fibre Distribution Cabinet 4 Once properties are connected to the network, information travels through various distribution hubs. 2 3 FIBRE DISTRIBUTION HUB FIBRE ACCESS NODE About the size of a standard substation, it is situated away from housing areas and can service up to 78,500 premises. Cables travel overhead or underground along the network until it reaches a local connection point. MULTIPORT Around 1m in height, this third distribution point services up to 200 properties at a time. Positioned on top of a telephone pole or in a pit, this connection services around 5 houses. There can be several multiports located along each street. NOTÊTOÊSCALE 09062v_14

Construction sequence The following images show the sequence of the typical construction of the NBN from a single street point of view using both underground and overhead techniques. Note the final design is subject to revision. NBN Co expects that at the height of construction there will be multiple sites being constructed simultaneously using the modular design process as articulated in the pre-planning and design section. Figure 2: Overhead construction techniques

Figure 3: Underground construction techniques Premises connection The connection to an end-user is achieved with a single fibre drop cable installed between the multiport (located in a pit, generally in the footpath near the property, or on a pole in the street) and the end-user s premises. For aerial installations the drop cable is likely to be installed in the same manner as the existing electricity or phone services, where practical, taking the same path to the premises as other drop cables. A Premises Connection Device (PCD) will be installed on the outside of the premises and the cable left coiled within it to be connected to a Network Termination Device (NTD) at a later date. Or, if the NTD is installed at the same time, the drop cable will be connected immediately. Where there is a PCD and an NTD, there will be a fibre cable installed between the NTD location and the PCD.

See below for an illustration of the premises infrastructure, but note this is still subject to final design specifications. Figure 4: Premises infrastructure required to connect to the NBN PCD Premises Connection Device PCD Premises Connection Device NTD Network Termination Device PSU Power Supply Unit NTD Network Termination Device PSU Power Supply Unit PCD Premises Connection Device NTD PCD Network Termination Device Premises Connection Device PSU Power Supply Unit NTD Network Termination Device PSU Power Supply Unit

It is the responsibility of the Service Provider to assist NBN Co in determining what type of installation is required at a particular premises by providing all required information during the ordering and appointment processes. NBN Co is in the process of determining which types of installation will be considered standard and which types will be non-standard. For NBN Co s initial customer trial to be held in First Release Sites, an internally installed NTD will be a standard installation. NBN Co will seek to place the NTD in a preferred location indicated by the owner of the premises, as long as that is consistent with NBN Co s safety and other requirements and regulations, and can be achieved using NBN Co s standard installation methods. There are technical and operational considerations as well as safety requirements which affect where NBN equipment and cables can be attached to a property, just as there are when connecting other services such as electricity, gas or water. These requirements ensure that the installation is done as safely as possible, and that the equipment will be both protected from accidental damage and easily accessible. Outside PCD connection The best position for the PCD will be different for each premises and will be determined by taking into account a range of factors including NBN Co s guidelines for installation. The PCD: Will be attached to the side of the building closest to the pit or pole in the street to which the drop cable is connected; and Must be more than one metre from the point at which the electricity utility s mains power supply cable is attached to the premises. NTD and power supply The standard installation of an NTD will be inside the premises, and on the inside of an external premises wall. The Power Supply Unit (PSU) will also usually be installed inside the premises on the inside of an external wall within three metres cable length from the NTD. If the NTD is located: Outside it will need to be near the electricity meter for the premises; or Inside a small hole will need to be drilled to connect the fibre cable from the PCD to the NTD. The best location for the NTD is generally one that is: Near a dedicated powerpoint (within 1.5 metres from the PSU); Near any existing telephone or data cables; Cool and well ventilated; Away from water, damp and steam; Away from busy areas and protected from damage; and Easy for the end-user to check the indicator lights.