news Communications Minister Stephen Conroy has delivered a fiery tirade against the media for constantly repeating misconceptions about Labor’s National Broadband Network project, singling out the Financial Review newspaper for particular ridicule and recommending that those interested in accuracy read broadband forum Whirlpool.
The Labor Senator opened a press conference held in Sydney yesterday to release NBN Co’s latest corporate plan by speaking in detail about what he said were a series of “misconceptions” regularly repeated in the media with respect to the NBN.
“You often think if Malcolm Turnbull put out a press release saying “Cost blowout in the NBN due to the Earth being flat”, it’d probably lead the front page of the Fin Review lately,” Conroy told the audience, which was composed of technology journalists from mainstream publications such as The Australian, The Financial Review and technology vertical outlets such as Communications Day, ZDNet and iTNews.
“For those that are interested in a comprehensive discussion of these issues, I can recommend to you the Whirlpool website, particularly the thread entitled ‘fighting the FUD’,” Conroy added. “It is a very informative thread, and I would encourage you to take a look at it. because it does address quite a few of the issues which we debate regularly.”
The Minister proceeded to list several dozen articles predominantly published by the Financial Review and other newspapers which he said contained “misinterpretation and misrepresentation” with respect to the NBN. In one example, Conroy pointed out that some NBN commentators — notably the Opposition — had repeatedly claimed that the NBN should be included as an expense item in the Federal Budget and that because it was instead listed as an investment, that this represented a “fiddle”. “As recently as 28 June, Australia’s premier financial journal questioned the treatment of the NBN as an investment,” Conroy said, referring to the Financial Review.
However, Conroy pointed out that independent verification by the Parliamentary Library (PDF) had backed the Government’s view of the budget treatment of the NBN funds. “Let me be really clear about this: To treat it as an expense would be breaching international accounting standards,” Conroy said. “NBN Co is an investment. It is forecast to have a rate of return of 7.1%. The government’s equity investments are included on the balance sheet, consistent with the accounting statements required under the charter of budget honesty.”
In another example, Conroy referred to statements by Shadow Communications Minister Malcolm Turnbull over the past few weeks questioning whether the Government had disclosed the true cost of its NBN investment, given that it would be paying interest on the debt funding it would acquire to fund the project. Turnbull, Conroy said, had asserted that these interest costs to the Government should be included in the overall cost of the NBN.
“Not surprisingly, the AFR has chosen to again simply report the Opposition’s incorrect assertion,” he added. “But it got even better — it was an ‘explosive claim’.”
Conroy went into further detail about the way the Government accounts for the NBN funds, noting that the interest paid on its NBN borrowings was recorded as an expense on the Government’s operating account — not on NBN Co’s own books. Turnbull, said Conroy, had proposed a situation which would be like Financial Review owner Fairfax media recording interest charges on its own books which stemmed from borrowings mining magnate Gina Rinehart could make to buy Fairfax shares. “This is a nonsense and should be utterly, utterly ignored, not be an exclusive, explosive claim,” said the Labor Senator.
Conroy also gave a number of other examples where he said NBN misconceptions continued to be reported. One example the Minister was particularly scathing about was the oft-repeated claim that NBN retail broadband prices would be significantly higher — up to three times as high — as current broadband prices.
“From the very first day which we announced the NBN, analysts and commentators have misrepresented the cost of connecting to the NBN,” said Conroy, highlighting a recent example of such comments being made by Opposition Leader Tony Abbott in his budget reply speech. “It continues to not only be reported but not challenged.”
“Retail service providers have started offering services at prices equal to or better than current broadband services,” the Minister said, giving examples sourced from independent price comparison site Whistleout. “Yet reports are still happily quoting assertions about prices being more expensive on the NBN,” he added.
In a further example, Conroy said a “mini-industry” had recently developed in the media by commentators attempting to compare NBN Co’s current progress in rolling out its network to its previous corporate plan releasd in 2010. However, Conroy said, a number of factors had changed since that original plan was released — with the major hiccup being the extra nine months needed to finalise NBN Co’s $11 billion deal with Telstra, which meant that most of the data needed for NBN Co to start its volume infrastructure rollout was not available until March this year.
Other factors included the drastically changed way which NBN Co deals with greenfields environments such as new housing estates where no existing telecommunications infrastructure existed. Some estates have been handed back to Telstra to complete, while in some cases, NBN Co’s estimates of premises to be covered by fibre in these areas have not proven accurate. For example, Conroy gave the example of an estate in Western Sydney which had some 700 premises slated to be constructed, but where only 100 houses had actually been built, partially due to a substantial decline in the overall housing market.
“Is NBN Co short of its target by 600 homes … because there aren’t homes there to connect?” Conroy asked the audience with respect to the Western Sydney example.
History of inaccuracy
Conroy’s comments come after the Financial Review has recently published several highly disputed articles relating to the NBN.
In late June, for example, the newspaper published an article stating that there was “a real risk” that the NBN’s fibre infrastructure might be overtaken by technical breakthroughs in areas such as “wireless technology”. “One such breakthrough on the technological horizon is Data In Data Out wireless technology, which promises wireless speeds up to 1000 times faster than those offered today,” the newspaper claimed. However, the notion that wireless could serve as a replacement for fibre or other fixed network technologies is heavily disputed by the global technology community and is a view outside current mainstream thinking on the issue.
The AFR also reported that take-up of the NBN in the areas where it is available so far has been “minuscule”. Unfortunately, this claim is also heavily disputed. In general, Australia-wide, NBN take-up rates have been strong. In fact, in communities such as Willunga in South Australia and Kiama in New South Wales, the take-up rate in the short time the NBN has been active in those areas has been north of 30 percent. This rate is expected to accelerate as Telstra’s competing copper cable is shut down in areas where the NBN has been rolled out, forcing Australians to migrate onto the NBN fibre.
The publication of that article came a day after the AFR published another article on the NBN stating that two key NBN contractors weren’t bidding for the next round of NBN construction deals due to rollout delays in the network. However, after the publication of the article, NBN Co and the contractors publicly denied the AFR’s allegations as “patently untrue”.
Over the past several years, there have been a number of misleading articles published by various local newspapers about the NBN. In December, the Australian Press Council expressed concern about the Daily Telegraph’s coverage of the Federal Government’s National Broadband Network project, backing a local critic’s complaint that three articles in a short period of time had contained “inaccurate or misleading assertions” about the NBN. Similarly, in March this year, another News Ltd publication, The Australian, published a correction to a story after it inaccurately alleged that a school in South Australia would have to pay $200,000 to connect to the NBN; in fact, the school will receive NBN access as part of the normal rollout.
In addition, the Opposition has also made a number of inaccurate statements about the NBN over the past few years which have been picked up by various segments of the media. Several weeks ago, speaking on Channel Ten’s Meet the Press program, Nationals Leader Warren Truss made a number of major factually inaccurate statements about the project, as detailed in this article by Delimiter at the time. In addition, Truss had previously made a number of inaccurate statements about the NBN over the past several months.
In June, for example, Shadow Treasurer Joe Hockey inaccurately claimed that 4G mobile broadband had the potential to be “far superior” to the fibre technology of the NBN. In mid-May, Opposition Leader Tony Abbott misrepresented the cost of connecting to the NBN, in comments which the Government claimed represented a deliberate attempt to mislead the Australian public on the issue. Turnbull similarly made a number of factually incorrect statements on the NBN throughout March, and in January Abbott got quite a few facts about the NBN wrong in a radio interview.
Conroy himself has from time to time made inaccurate statements about other projects in his portfolio. In February, for example, the Minister appeared to consciously tell a factual inaccuracy with respect to the current implementation status of Labor’s controversial Internet filtering project, stating that Telstra and Optus had implemented the mandatory filtering system, when they have only implemented a drastically reduced voluntary version.
It’s hard to disagree with Conroy’s comments. The coverage of the NBN by Australia’s mainstream media has been appalling, right from the start of the project — and if anything, it’s only getting worse, not better.
With respect to the Financial Review specifically, as some Delimiter readers would know, I used to work for the grand old dog as a technology journalist (you can check out my work history here), and I still maintain a soft spot for the newspaper. I love its Chanticleer back page, I love its Street Talk gossip section and I love the sense of industry insider-ness it often has about it. I certainly think it’s still the best and most accurate newspaper in Australia. But I do think it has changed its tone and approach a bit recently in a way that I don’t necessarily personally approve of. It will be interesting to see how it fares in the year ahead.