Whirlpool more accurate than AFR, says Conroy

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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.

opinion/analysis
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.

149 COMMENTS

  1. Convoy is playing with tax payers money. This labor Goverment needs to go. Our children will be paying for labors wast from Rudd to Gillard.

    • @rocco – “Convoy is playing with tax payers money.”

      *palmface*

      The National Broadband Network isn’t funded by taxpayer’s money.

      You need to go have have a detailed read about a little thing called Equity Funding.

      @Renai – “and if anything, it’s only getting worse, not better.”

      …and it’s clearly, unfortunately, flowing into the general populous…

      • Don’t worry Ben, your kids will have ultra fast pr0n and warez, they’ll steal those movies in a minute or two, pitty though, if they get sick in middle of night theyll’ spend 5 or more hours in a hospital waiting room because for labor faster pr0n is more important than health system.

        • Hi Nobby6,

          Just a bit of friendly advice… Delimiter is an evidence based forum, so Jones/Bolt like factual inaccuracies are frowned upon…

          So to bring you up to speed (so as to help you avoid being banned), the NBN is off budget (remember Hockey and Co whinging about the funds being hidden)… yes, the old each way bet is alive and kickin’ in some circles.

          So the health budget will NOT be affected.

          FYI – in the same timeframe the NBN is built and will cost – $37.4B we will have spent just under $600B on health.

          But seriously Nobby6, even though the NBN is NOT being funded directly via taxation, “regardless”, since when have Australian’s been against governments spending our taxpayer money on us taxpayers anyway…?

          WTF are our taxes for if not to build stuff for us?

          • Alex writes “WTF are our taxes for if not to build stuff for us?”

            I thought it was all about tax cuts, Rolls Royce paid maternity leave, tax breaks for big business, carrot dangling at election time, middle>>>>>upper class welfare. Heaven forbid for a Government to actually build something, like derrrrrrr!!! infrastructure.

        • “Don’t worry Ben, your kids will have ultra fast pr0n and warez, they’ll steal those movies in a minute or two, pitty though, if they get sick in middle of night theyll’ spend 5 or more hours in a hospital waiting room because for labor faster pr0n is more important than health system.”

          If the Health System is important as you say it is to the LNP, why was it that TONY ABBOTT MP cut over $1 Billion dollars from the Health budget over the first term of Howard’s reign? Secondly, he did it again during the second term.

          Not only this, but if the LNP are dedicated to the health system as you say, then why – during a $200 Billion Dollar Surplus that was the ‘envy of the world’ did they spend a grand total of ZERO on boosting the health system with it?

          You give false impressions sir.

          • @Master T

            The money was removed from forward estimates of the budget due to the previous Labor government leaving a massive debt. In fact the annual budgets for health increased during the Abbot management period.

            The Howard-Costello government left a $40 billion surplus which the Rudd government effectively spent *before* the GFC hit.

            You give false impressions sir.

            Do you vote Labor / Watermelon?

          • @Fair Go: Sorry my friend but I work in the hospital and I can assure you a lot services were cut down if not cut completely.

          • @ Fair Go…

            I’m not taking sides with such political issues (I support the NBN) but as someone who voted for JW Howard, I find the pedestal of perfectness some now place him and him alone upon, somewhat strange.

            Imo, he was just another politician (but a very adept politician), like Rudd and Abbott (who while negative is also an adept politician) and Gillard. But I don’t think she has the same level of ‘political nous’ as the other 3.

            Seriously, the only people who refuse to accept that the strength of our current economy was due to both sides of politics over many years (and each side made mistakes too) are the party faithful voters from both sides… because even the (past) players themselves admit the other side had major roles…!

            _______

            http://www.smh.com.au/articles/2003/03/10/1047144917113.html

            Snippet …

            “Any fair and accurate assessment of economic reform in Australia would acknowledge that this has been a bipartisan endeavour.

            In a speech to the Liberal Party federal council on April 13 last year, Howard said he was “prepared to give credit to the former government for a number of changes that it made”. He mentioned “the deregulation of the financial system and the floating of the dollar”.

            Interviewed on Channel 10’s Meet the Press in November last year, Keating praised Costello for keeping “the tone on the economy” and for moving the budget to surplus. However, there has been opposition to economic reform – from both regulators and deregulators alike.”

            ______

            http://blogs.theaustralian.news.com.au/mumble/index.php/theaustralian/comments/labors_debt_and_deficit_problem/

            Snippet 2…

            “In 1983 the Hawke government came to office as Australia was coming out of recession and a drought was about to break. It inherited a very large deficit and made a very large fuss about it. This enabled them to trash their predecessor’s legacy and break a few campaign promises.

            In the late 1980s they started running surpluses—the first in decades, they boasted—but deficits returned with the 1990s recession and stayed until after John Howard’s 1996 victory.

            Now it was Howard and Costello’s turn to be outraged and have to make difficult decisions etc.

            But when Kevin Rudd government came to office in November 2007 he inherited a healthy surplus.

            However, if the election had been held a year later the GFC would have been getting into swing and John Howard would have bequeathed a fiscal deficit to his successor.

            So this timing made the economic story difficult for the current government.

            ______

            http://www.theage.com.au/news/National/Australian-deficit-hits-record-high/2005/03/01/1109546846166.html

            http://www.theage.com.au/articles/2004/10/20/1097951764535.html?from=moreStories

            My apologies to everyone if I have gone too far of topic.

        • Nobby6 – mate you are a champ, fast internet is bad, spam, viruses, bad contents, piracy etc despite it is much more efficient. I am sure you are still using fax rather than email, ride a bike rather than driving a car, avoiding free-ways, because those are too dangerous, not having tv’s because they can be bad influence, not using fast courier services be cause they can deliver po0n stuff really fast from our capital city, just to name a few. /s

          Did something land on Mars a few days ago, I have heard? damn how behind I am.

        • Here’s the funny part…

          If you are willing to believe that the NBN “is being paid by tax money” (just to clarify its NOT but just for the sake of argument were assuming it does). You at least have a detailed plan and costing for the whole life of the project thats obviously being updated depending on the circumstances..

          If you go Coaltion you get costings of “we’ll do it cheaper w/ subsidies” which is also paying w/ tax money. However you don’t have *ANY* concrete costing of “cheaper” and how much of a blow out this “cheaper” may entail if it doesn’t go to plan (but hey it’s Libs and they always go to plan right?).

          So financially your options are X billion spent over X years on a plan w/ an adjusted plan for blowouts on paper and open for scrutiny and change… and on the other hand you have “we’ll just do it cheaper” with a “?” as their ballpark figure and an even bigger “?” on how much it would be if there was a cost blow out. So your arguing for a “?” plan as opposed to a real plan

          So in reality most arguments about “fiscal responsibility” is rather hypocritical to say the least. And only makes sense if you’re in two categories. The first one being your in the group that thinks the NBN is a luxury and not infrastructure (ie. the net is not important) at which case any fiscal report would still be “waste” and should Coalition not do anything its still hunky dorey because they saved us money spending on a luxury anyway…

          Or your option B – that your against it because of politics because you cannot possibly believe that the other party cannot be capable of doing anything responsible fiscally and you honestly believe that your political affiliation is more equipped hence the “blind eye” approach to the nebulous state of the “alternative” because you truly believe they will be better “anyway”.

          Either way its really “picking an argument w/ a brick wall” scenario

          • Interesting point Rock_M

            We have the people who have no obvious broadband plan, no CBA, no Corp or Biz Plan, really… they have nothing concrete that we know of at all… criticising the others daily (mostly without factual basis) who have everything (except a CBA) for not conducting a CBA? And then criticising the plan, costings, funding etc… and we are expected to vote for the one’s who offer us no detail and nothing but negativity…. and trust that everything will be ok?

        • Actually I have already spent 8 hours in a waiting room with my daughter when she was only a week old. She had a condition that my local hospital could not deal with so they shot her up to the Mater children’s hospital, in an ambulance and everything. This did happen at midnight, a Saturday night even, the time in emergency she was getting treatment, just waiting for a ward spot to be ready.

          Unlike you I can’t afford the private system. If NBN money went into “health” that’s where it would have to go. NBN will be paid for by its users (via RSPs); a public hospital can never make money like this unless it is a private hospital!

          • @Ben

            I hope she’s ok now.

            Private Health is definitely an issue. I’m not sure whether I agree with it (I don’t pay for Private cover, though I CAN afford it) or if we should get a better State model. It seems by splitting it, we are taking potential revenue, that, if used PROPERLY, could make the State system much better. But that’s only IMO.

            Ultimately, as you say, the NBN makes no difference to Public Hospital funding.

    • *rolls eyes*

      I have the voice of Maude Flanders ringing in my ears: “Won’t someone please think of the children!?!”

  2. LOL

    Conroy can have “Whirlpool” and other internet blogs.

    I’m sure Malcolm is more than content to have the rational support of reputable and serious News Corp and Fairfax publications over internet fora anyday.

    • Is it ironic to post on Delimiter about the worthlessness of internet “blogs” such as whirlpool? Im at a bit of a loss.

      I am sure that Mr Turnbull would prefer the support of MSM though as their voice does tend to be somewhat louder. Louder in the manner of that drunken uncle you just had to invite to your wedding, sure, but louder..

    • So what you are saying is Conroy can have factually correct well reasoned and rigorously debated comments by people with an interest (professional and otherwise) in technology.

      Turnbull can have incorrect, misleading, misinformed, intentionally stupid, malicious and politically biased reporting (not all at the same time, you cant be malicious and misinformed at the same time) from people that have no idea what they are talking about.

      At least, that is the gist of this article that you are commenting on. We are reading the same article right? I didn’t get some kind of different Delimiter article? Or did you get some warpo reality Delimiter where the AFR et al dont intentionally (and otherwise) mislead their readers?

    • Yeah, because truth & accuracy runs a far distant second to telling as many people as possible the “story” you want them to swallow. Especially if you know many of those people will never check the accuracy of your statements, and the mainstream media certainly doesn’t seem to be interested in doing that part of their job lately.

      • accuracy? the majority are being printed as “opinion”. you dont need facts to form an opinion, or state it, and obviously as there are no facts in these articles there is no need for due dilligence or fact checking at all.

    • This is where politicians often slip up but I think Senator Conroy and some select others have picked up on this…

      Mainstream Media outlets are written by a handful of journalists who are paid to write what they write.

      The difference is that Whirlpool and other fora are commented on by a multitude of people (voters) from all walks of life and all voting preferences who contribute on an unpaid basis – candidly – because they want to, not because they have to.

      Online fora are the same as holding a community meeting in a local hall where people stand up and speak their part amongst their peers.

      For politicians responsible for representing the PEOPLE… I think the online fora written by the PEOPLE are the better choice for gauging voter reactions than what the media reports.

    • Well, i dunno which is more tragic and pathetic:

      Craig Emerson doing a Whyalla cover of an old Skyhooks tune

      or

      Stephen Conroy relying on Cesspool for ministerial policy credibility

      Sad day for Labor.

      • It’s a shame.

        I think you lost people’s attention right after you mentioned “rational”, “reputable” and “serious” in the same sentence as the names of one or more of our mainstream media outlets.

        Sad day for the mainstream media when people started (naturally and without prompting) spending more time on social networks and online fora than reading the newspapers or even reading the online versions of news websites!

        Oh wait… that was a while ago…

        Shows how people will naturally choose their own path and no matter how much the print media companies might want to believe it and say otherwise… the path is not towards them.

        • Tell you what. . . .

          Draft two different resumes:

          Resume #1: “Journalist/Editor at News Corp/Fairfax/MSM”

          Resume #2: “l post anonymously and incessantly on Whirlpool”

          Then send out your resume for job applications, or as a self-introduction to gain interviews or meetings with VIP businessmen or politicians.

          See which resume gives you the higher response rate.

          • When applying for a job that requires accuracy regarding the NBN and a history in journalism is not a requirement, your whirlpooler will get the job well before your AFR journalist.

            When applying for a job that requires accuracy regarding the NBN and requires a history in journalism, neither will get the job.

          • @ garfield.

            Tell you what, since you know so much about why the NBN will fail (ahem).

            Why don’t you simply draft and cost one single alternative for us on behalf of the opposition (since they won’t)?

            Hmm better not eh, in case it eventually conflicts with the official one you back without question.

          • I’d bring the owner of the first resume in for a “fun with dick and jane” s-s-s-statistics” style interview, and then look into the forum guys other skills and personality before dismissing a potentially wonderful employee.

          • I actually had no prior professional experience, but I’ve had many years spent as an advisor on multiple forums. I used these experiences in my resume and managed to turn what most deem to be a negligible past time, into a positive. It’s all about how you present this information.

            And I’d dare say that more and more small to medium size IT business/enterprises are valuing the importance and validity of underground journalism, online blogs, and online forums. And in the end it comes down to the candidate to push forward the reasons why they are suited for the job.

            I’m sure any IT business that has a progressive mindset and a vested interest in an NBN (particularly the one Labor is putting forward) wouldn’t particularly value an AFR reference on face value any more than it being an indication that they are good at writing what they are told to write. No investigation, no initiative, just nitpicking what their higher ups told them to nitpick.

            In the end though it’s down to the candidate. Prior experience is next to no worth if the individual is either highly capable or highly incapable, and if they’re in the middle ground then the business will go with the person with vision that aligns with the business.

      • Personally what I think is sad is that a politician was actually able to say a Forum is more accurate than MSM – and be correct.

    • @garfiled

      I’m sure Malcolm is more than content to have the rational support of reputable and serious News Corp and Fairfax publications over internet fora anyday.

      *Laughs so hard entire body deconstructs into molecules and ceases to exist*

      Silence….

  3. I find it difficult to side with Conroy on a lot of things, mostly due to the filter nonsense, but he is correct on this, NBN Co is massively misrepresented in mainstream media. It would help if his department and the government in general were more transparent, and it would help even more if these journalists did their research instead of misleading the general population who don’t have the time or inclination to independently research these facts.

    • You’re assuming that the journos responsible are publishing these inaccurate & misleading stories out of ignorance, when there’s a significant chance it’s by design.

      • I do like to assume the best of people, but that motive is not entirely outside my scope. It disappoints me as a technology enthusiast that there is so much FUD about the NBN, I can’t wait to get 100Mb fibre to my door :D

      • “You’re assuming that the journos responsible are publishing these inaccurate & misleading stories out of ignorance, when there’s a significant chance it’s by design.”

        Agreed Bern,

        It is an established methodology with News Corp to direct the news into an agenda rather than report it accurately…a good example is Fox News from the US:

        “Former Fox News producer Charlie Reina explained, “The roots of Fox News Channel’s day-to-day on-air bias are actual and direct. They come in the form of an executive memo distributed electronically each morning, addressing what stories will be covered and, often, suggesting how they should be covered. To the newsroom personnel responsible for the channel’s daytime programming, The Memo is the Bible. If, on any given day, you notice that the Fox anchors seem to be trying to drive a particular point home, you can bet The Memo is behind it”

        http://en.wikipedia.org/wiki/Fox_News_Channel_controversies#Daily_memos

        Not really news as I grew up understanding it…

        • Indeed Chas. By definition that is not news. By definition it IS propaganda:

          Propaganda: ideas or information spread to promote or injure a cause, nation, etc.

    • More transparent?

      Wouldn’t help.

      Just today I read an article based off their recent Corporate plan that took increased operating costs due to more customers and spun that as a bad thing.

      If it is a number that refers to spending, and it ever goes up, it will get added to a grand total to represent a “cost blowout”.

      The Hun today had an article saying the NBN had a ~4.5 billion dollar “cost blowout” because of 1.5 billion dollars cost – which we know about – and 3 billion dollars extra ‘operating expenses’. – I believe the operating expenses are because of the 500,000 extra customers (read: more income) the Optus deal brings in

      • What is reported to the public directly on their website in an easy to consume format is still far too vague to easily dismiss the claims of incorrect journalism. A more informative reporting of facts on the internal operations of NBN Co and DBCDE could resolve a lot of these issues.

        • It is hard enough (I say hard giving them the benefit of the doubt) for them to read the simple numbers released by NBN Co now.

          I fail to see how more (and by its nature more complex) information is going to make the reporting more accurate. If anything they will just misinterpret (wilfully or otherwise) even more numbers. Rather than somehow come to an accurate conclusion.
          (I almost said correct conclusion – but this is interpretation of numbers, and what they mean which does have some legitimate room as to if they are positive or negative in regards to the NBN.)

          • I wish I had any more faith to give to my fellow man.

            They have thoroughly burnt it out of me over the last 6 years.
            (When I say “they” btw, I am referencing everything from both sides of politics: filter, Assange, leadership disputes – both parties, ETS, NBN everything).
            The reporting, and the reality of all of those issues and more depresses me no end.

            Context re: Assange thing: I don’t mean to imply they aren’t doing enough or claim his innocence…
            I refer specifically the comments by Julia Gillard implying his guilt – she should just say: ‘he is being treated the same as any Australian accused of crime overseas’ and move on without giving a bloody opinion!

  4. “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.”

    That is incorrect.

    What Malcolm probably means is that the 7% IRR is calculated on the basis that no “interest” accrues on initial $27bn of direct lending from the Fed Govt. during the roll-out period when NBNco’s total funding requirement is still growing. This is effectively an on-Budget subsidy of the NBN. It would be interesting to know whether this hidden subsidy has since increased given the higher Govt funding unveiled in the latest CP.

    • No, that is not what Malcolm said. And it is not what the Corporate Plan says, and it is not what the budget says.

        • I think the government constitutes professional financial accountants. (there is an awful lot of money flowing around the government) and I suspect they like their jobs and don’t get paid to come to a certain conclusion.

          I’d like to see your evidence, mine is in the format of the Corporate plan of the NBN and the Australian governments budget.

          Yours so far is in your “belief” of what Malcolm was trying to say. (I note you don’t actually claim Malcolm said this).

        • I would like to point out, that the “on budget subsidy” you refer to, is in fact already on budget.

          What Malcolm asked is to have the numbers applied to NBNCos books also.

          Which is why he is wrong.

          • Wrong. That’s not what Malcolm says.

            All he’s saying is any accurate reference to the holistic cost of the NBN should take into account all project capitalised interest, including any which have been arbitrarily shifted off NBNco’s books onto taxpayers in the form an “interest subsidy”.

          • So, the NBN should be entirely on budget, but any additional costs relating to the funding of the NBN that are already on budget should also be off budget listed against the NBN? Or listed a second time under another heading saying: “nbn costs we already told you about, but want to tell you about again”.

            Where does it say in Financial Analyst school that you should list all your costs as many times as possible?

          • If you buy an investmentproperty for $500,000, thats the capital expenditure, or CAPEX. You dont say it cost you $1,000,000 because you’re expected to pay another $500,000 over the 30 years of the loan.

            Instead, you declare each years interest as a cost, or operating expense – OPEX. When you account on a year by year basis, those operating expenses are offset by any revenue generated. Like rent. Net result is your profit or loss.

            In effect, the NBN is one massive negatively geared asset. There’s been a loan, there will be expenses, and there will be revenue. The loan is treated different to the costs and expenses, because one is CAPEX, the other is OPEX.

            From a government budget perspective, because its CAPEX, with a clear objective to turn a profit, it doesnt get put on budget. Likewise, because its an asset, its costs and revenue are balanced in-house, just like a tax return with negative gearing. And like investment properties, at some point it becomes positively geared.

        • Yes experts in their field have crunched the numbers and as a consequence, FttN was found to be unviable…

          This is why the rest of Australia (apart from the opposition and their faithful followers) have rightly moved out of the last century, nay, millennium!

          But there is still hope, just like when the then Rudd opposition were proposing FttN and the deputy PM (if iirc) referred to FttN as fraudband… perhaps within the next five years they will again “catch-up” ;-)

        • These professionals number crunchers perhaps garfield…?

          http://www.smh.com.au/opinion/politics/blogs/the-dreyfus-files/coalition-should-have-red-faces-over-costings-20111207-1oigi.html

          http://www.abc.net.au/news/2010-09-01/treasury-finds-black-hole-in-coalition-costings/2245360

          Here’s two gems from within for you…

          * More than a year ago The Australian Financial Review’s political editor, Laura Tingle, wrote that there were ”two possible explanations” for the opposition ending up with an $11 billion hole in the cost of their election commitments: ”One is that they are liars, the other is that they are clunkheads.” She went on: ”Actually, there is a third explanation: they are liars and clunkheads. But whatever the combination, they are not fit to govern.”

          And

          * “The Tribunal’s findings confirmed that the Coalition’s private ”audit” was not an ”audit” at all, and that they’d sought to conceal their true costings from the Australian public, refusing to have them properly costed by the Departments of Finance and Treasury.”

        • And you simply believe what Mr Turnbull and Mr. Abbott have to say on the matter, because neither has been caught out before with being less than honest and both are always 100% truthful.

          By the way, I have a lovely piece of land in a swamp that you can buy. It’s perfect for building that family home you’ve always dreamed about.

  5. It is a shame though that “just” an Internet forum is more accurate than a “Professional” news organisation. I’m just glad we haven’t quite hit fox news level of “professionalism” in Australia. Of course AC and TT have had plenty of moments.

  6. I’ve always found how news agencies that “pride themselves on neutrality” can show such hypocrisy by publishing so many obviously biased stories. Yesterday’s NBN account on the SMH being yet another example. This after – only a month ago – they blocked a major shareholder from joining their board for failing to swear their so-called “Oath of Editorial Independence”.

    I don’t unswervingly praise the current government; they certainly have had their share of debacles (as had their predecessors and every preceding government) but we have a media presence so firmly married to the opposition that it’s virtually impossible to get political commentary without this spin put upon it.

    The facts of the NBN have been compiled with all their raw figures open to review, analysis and dissent yet popular media is not availing themselves to any of that; instead opting to promote and support politically biased rhetoric that could be easily reviewed and refuted. In short, they are reporting lies in order to denigrate the current government and aid the opposition.

    I read Delimiter daily as one of the few sources of balanced information; I just wish more sites would try to maintain as equal a stance in their reporting.

  7. “The coverage of the NBN by Australia’s mainstream media has been appalling right from the start of the project”. It’s actually been appallingly *wrong*.

  8. I think the thing most people slamming the Fin Review and the mainstream media are missing is, this isn’t their first rodeo. These publications have seen the big giant projects go pear shaped before and all the spin in the world by either side of the political dial isn’t going to change that.

    I think if you put politics and your own “beliefs” aside for a second, you’d have to say that government’s aren’t really great at spending our money on mega-projects. They almost never come in on budget or on time.

    Now, on paper, at this current juncture in time, the NBN is behind it’s own schedule in just about every single progress indicator that they themselves projected back in 2010.

    Look at it through that prism – governments aren’t good at this historically and here’s another MASSIVE projects that’s behind.

    If it looks like a duck, walks like a duck and sounds like a duck, it probably isn’t a french poodle.

    What’s clouding the situation is the customer acquisition model and the cost of support and transitioning those users. And while I think there is absolutely no doubt that the government has overestimated the revenue and customer numbers while underestimating the costs, that’s an opinion, so let’s just take a wait and see approach.

    The bigger issue is, looking back on the progeny of this project, it is abundantly clear that Conroy and Quigley back in 2010 had absolutely no idea what they were doing, the plan really was Kevin Rudd and Conroy on a cocktail napkin in a plane. The numbers for things like premise passed with fibre are out by 75%. More importantly, the government’s projections are now based on deals with Telstra and Optus that weren’t factored into the original planning which again, shows how badly this thing was thought out BEFORE they started.

    If you were a pessimist you’d throw out the old axiom, “Failure to plan is planning to fail.” If you’re an optimist, you’d probably call this a “pivot”.

    • It is called a plan and not gospel for a reason you know. Things can change. What you predict can change.

      A 3% adjustment to the cost of a plan and a 5% adjustment to the duration of a plan after 2 years (of experience) when starting from a position of 100% conjecture, shows some pretty bloody good forecasts to me.

    • @Balanced

      These publications have seen the big giant projects go pear shaped before and all the spin in the world by either side of the political dial isn’t going to change that.

      Really?

      I wasn’t aware any of these editors/journalists were around when PMG started rolling out our Copper….

      Sounds disingenuous, but then so is assuming ALL government projects end up over budget and over time. Exhibit A- Snowy Mountains Scheme. Same Scale as NBN (in cost an bigger in timeframe)- On-budget, on time. No thanks to successive Coalition governments.

      Now, on paper, at this current juncture in time, the NBN is behind it’s own schedule in just about every single progress indicator that they themselves projected back in 2010.

      This has been explained over and over. The SCOPE of the NBN has changed. Another 500 000 customers are being PAID FOR onto the NBN. Greenfields now MUST be done by NBNCo. over 100 premises, REGARDLESS of if they are on transit, meaning some extra 15% fibre has to be run to accommodate them. You cannot expect a projects who’s variables change (scope) for its’ dependents to stay the same (budget).

      And while I think there is absolutely no doubt that the government has overestimated the revenue and customer numbers while underestimating the costs, that’s an opinion, so let’s just take a wait and see approach.

      Yes. It is an opinion. My opinion is they have UNDERestimated the revenue, spot on for the customer numbers (and actually, I don’t know how you can think otherwise….if you want a fixed line connection in 2022 onwards….you MUST use the NBN….) and possibly slightly underestimated the total cost.

      it is abundantly clear that Conroy and Quigley back in 2010 had absolutely no idea what they were doing

      I object to that. Where is your factual evidence to say Mike Quigley has no idea what he was doing? No, Corporate Plan projections that are all of 3-5% out on cashflow do NOT count wen scope changes. ALL the network design, ALL the business setup and B2B IT has been independently analysed and found to be well done. Don’t spout fallacies.

      • +1
        and as @Balanced posted
        “Now, on paper, at this current juncture in time, the NBN is behind it’s own schedule in just about every single progress indicator that they themselves projected back in 2010.”
        The scope of the NBN project changed from 2010 to 2012. Please, add a bit more balance.

    • I think the thing most people slamming the Fin Review and the mainstream media are missing is, this isn’t their first rodeo.

      So inaccurate reporting, misrepresentation, lies — these are all OK because “they’ve seen it all before”?

    • “…the plan really was Kevin Rudd and Conroy on a cocktail napkin in a plane…” Not bad for a couple of amateurs that, over a couple of drinks during a flight, they could come up with a solution that had eluded the LNP’s best and brightest (although I an being charitable including Alston in that mob) for more than a decade.

      Its not a good look for the LNP is it? It appears that lack of intellectual rigour is still manifest within the LNP ranks.

    • @Balanced you’d have to say that government’s aren’t really great at spending our money on mega-projects.

      True. But in this case they aren’t spending “our money” if by “our” you mean the tax payers. The NBN will ultimately be paid for by it users, and the people lending the money to build it until that happens expect to make a profit on their investment. So far it looks like they will.

      And when it comes to spending to spending money in general you have to compare the governments record against private enterprises record. To pick a recent example – take the $250 million Guns just wrote off, or the $8 Billion Microsoft just wrote off, or the god knows how much was spend on the Clem Jones tunnel in Brisbane. You will probably argue that wasn’t “our money”, but in broader terms the money wasted on the Clem Jones tunnel could have been expended more usefully elsewhere. In the end the money that funded the Clem Jones tunnel came from Australian’s savings – superannuation mostly, and it now can’t be spent to develop assets that will be used.

      In general the “private enterprise is a better manager of money than governments” meme the liberals trumpet is rubbish. Both are capable of making appalling mistakes, and recent history has demonstrated repeatedly with the privately created GFC or the government created melt down in Europe. The thing that makes the system work is not private ownership, it’s competition. Where there is competition, like say there is for Australia posts parcel delivery business, both private enterprise and government run Australia Post do equally well.

      Telstra currently has a monopoly on the local loop, the exchanges and equipment in them except where they were forced to yield control, and most of the backhaul coming out of the exchanges. The NBN will trim that back to is essential to drive the local loop, giving a a net increase in the market place competition we have now. The sad thing is you would think it would be the liberals who be delivering fundamental market place reform, but no, it’s Labor. Funnily enough, it took Labor to do it with electricity as well. To their credit the Liberals did it with water.

  9. I just can’t believe in a modern mainstream culture as we have in this country that media can report lies as the truth. Misrepresent anything they like. Completely pull the wool over the eyes of the Australian people. If the NBN gets canned the buck stops with News Ltd. I am astounded they are allowed to get away with heavily biased reporting of this nature. Free speech rights are a joke when all you print about the greatest infrastructure project this country has ever seen is misleading trash. Journalists you should be ashamed.

    • In a democracy like our’s we get the EXACT government we deserve. If the next government cans the NBN, then it is because the people of Australia put them there.

      The only difference is, when a person running for office says, “I will not institute a Carbon Tax” and then a week after “winning” decides to do the opposite, that is just outright lying and shouldn’t be tolerated or accepted.

      But if Abbott wins and is on record as saying the NBN is doneski, then we get what we deserve.

      • The only difference is, when a person running for office says, “I will not institute a Carbon Tax” and then a week after “winning” decides to do the opposite, that is just outright lying and shouldn’t be tolerated or accepted.

        She didn’t win. so she didn’t lie..
        The greens won, they decided what policy regarding the carbon tax should be.

        Also it isn’t a carbon tax, its a carbon trading scheme, but that’s just me being peda^h^h^h^h accurate, and not swallowing the main stream media misreporting of this fact too like I am supposed to.

        • She did say before they election she wanted to institute a carbon trading scheme. As it happen having it taxed for a few years to get a price on carbon was the only way to introduce the scheme. Best laid plans sometimes have to be compromised to reach your end goal.

      • It seems a bit strange that people harp on about Gillard’s so-called “lie”, but conveniently forget about Howard and his “non-core promises”.

      • “In a democracy like our’s we get the EXACT government we deserve. If the next government cans the NBN, then it is because the people of Australia put them there”

        So you are of the opinion that anyone who desires the completion of the NBN should not vote Liberal in the next election…we agree.

    • Kevin writes “I just can’t believe in a modern mainstream culture as we have in this country that media can report lies as the truth. Misrepresent anything they like. Completely pull the wool over the eyes of the Australian people. If the NBN gets canned the buck stops with News Ltd. I am astounded they are allowed to get away with heavily biased reporting of this nature. Free speech rights are a joke when all you print about the greatest infrastructure project this country has ever seen is misleading trash. Journalists you should be ashamed.”

      Have to agree 1000% here, On Sunrise this morning all they reported on the NBN was “NBN cost blowout by the billions and delayed by 6 months” and of course as predictable their guest shock jocks “RUBBISHED” the NBN to the nth degree.

      Not one positive thing was said during the whole program about the NBN. It was all about billion dollar blowouts, higher operating costs, delayed finishing date and low take up rates. Nothing mentioned about the very long/time wise and complex negotiations with Telstra or the 121 POI’s up from 14 POI’s.

      If the NBN gets canned it won’t be about the voting public deciding wisely at the next election. It will be a purely and 100% biased mainstream media (and that includes Sunrise Channel 7) basically brainwashing the vast majority of the electorate into “THINKING” that Labor’s NBN is BAD and that the Liberal’s NBN (whatever that is?????) is GOOD

      It REALLY makes me sick to the stomach that it’s all allowed to happen and apart from a few sites like Delimiter/Whirlpool it looks like this great visionary infrastructure project will go the way of the DODO even before it gets the chance to prove itself.

      For all of my voting life I didn’t take much notice in politics and would vote at election time (both Federal and State) depending on how I felt at the time either Labor, Liberal, Greens, Democrats or the Tooth Fairy (blank plus others). I am really passionate about Labor’s NBN for a lot of reasons, but if it “DIES” at the next election then democracy here in Australia has lost me forever. I will not trust anyone ever again, it will be dog eat dog/every man for himself.

      If the guy up the road is is danger or someone is being robbed/violated and I don’t know them, then I won’t get involved. I’ll just turn a blind eye and walk away because frankly Australia deserves what’s coming to itself.

      • Well no shock about Sunrise or the Print Media’s coverage. It’s all self-defence really, isn’t it? The NBN means that we won’t be locked into Australian physical or TV media for our coverage. While we might live a long way away from the alternate media sources which were difficult and expensive to get via satellite, all that is sorted under high speed internet. These sources are available to some Australians today and these organisations just aren’t adapting. Imagine when these sources are available to greater than 93% of the Australian population. How does one sell adverts on a medium that the public don’t use anymore?

        • Its true that traditional media is afraid of emerging technologies but that is mostly because these are mature businesses and so resist change. Koshie does not understand the internet and I don’t think he ever will interestingly in the piece you mention he gave no opinion. His commentators are from radio who are talking all day to people who likely do not read delimiter.
          If we want those perspectives to change, we would have to use the phone and ring up the talkback radios to give our perspective.
          Just because we are more likely to notice something on twitter than radio doesn’t mean that its the only form of communication and that people who still rely on radio should get with the times.
          Essentially we are ignoring the crowd who have kept with traditional media and then complaining that they don’t pay attention to the facts when those facts are on a medium they don’t know how to properly use.

          • @Matthew

            That is no excuse for the mainstream media reporting FUD. Using the idea that their “readers, listeners or viewers simply expect us to produce news they are accustomed to” is breaking journalistic and ethical standards. And this is the excuse they use, instead of rebutting what callers say with facts to inform them politely, they take it and run with the FUD that is called in with, because it suits their audience.

            This is not journalism. It is tabloid reporting.

          • I admit that I do not listen to radio. I cant write code while listening to radio as it is too much of a distraction.
            So I wouldn’t know if they are receiving the information or not.
            Which is why I raised the point that we should have a voice through traditional outlets.
            If the voice is already there and its being ignored then that is blatant politics.
            Sadly the older I have become the more I have realised that integrity is not an ideal people often aspire to. They would rather have influence. I guess others come to the same conclusion and so discard their ideals.

          • @Matthew

            Integrity in mainstream radio and TV is almost non-existant. They pander to their audience. Ironically, the only “integrity” comes from “shock-jocks” like Kyle Sandilands (NOT that I like him OR am advocating people listen), but that is ONLY because he says what he feels regardless of the consequences. However, sometimes I’d say he does this for the very shock of it rather than any integrity he may or may not have.

            Fact is, many politicians ring in quite regularly to radio like ABC Talkback, but would never bother with mainstream radio because the DJ’s would act very polite, make some jokes etc. and then turn around and bag and shoot down the very thing the politician had been trying to correct facts on.

            Mainstream radio and TV is all about popularity. It is rarely, if ever, constrained by facts if this popularity isn’t met.

          • I feel like a cynical old guy which is probably a more intelligent place to be :).
            That is why they keep Sandilands around – sensationalism. If he wasnt as hated as he is then he would have been ignored a long time ago.

  10. but whingepool forums, much this blog site, are only full of conroys fan boys, who all can getz their 1337 wAreZ and pr0n faster *sigh*

      • “I wish there were a “Like” button for that comment, not so much because I agree, but because it made me laugh! Hahaha!”

        I can’t imagine why; it didn’t strike me as witty, clever, humorous, original or even rational, just a bovine base comment intended to inflame.

    • Where as the Financial Review reader are all highly paid corperate types who want their tax lowered by Abbott by spending nothing on the average Australian, reforms that allow them to more fully exploit their workforce.

    • I’m insulted at being labelled a Conroy fanboy – I am an NBN fanboy. If it was Turnbull’s project not Conroy’s then I’d still be all for it. Pretty sure almost everyone else who wants the NBN to happen is of the same opinion!

      • I’d just like to add, as someone living within 300m of my exchange, I’ll be getting my l33t w4r3z and pr0n at atleast 80 megabits per second under both schemes.

        The difference is everyone else will be getting their pr0n at the same speed as me under an FTTP scheme, instead of only a select few.

        I give a crap about other people’s internet access, not just my own.

        • +1

          To be perfectly honest I am in the same boat. My area is in the 3 year plan for fiber. so I’m guaranteed to have great net speed. That being said after living in a RIM Hell area which is literally across the road from the Optus HFC which they never bothered to connect I can sympathise as to *WHY* it’s essential the NBN continue at it’s current for to allow ubiquitous online connection for THE WHOLE POPULATION because of the many headaches I encountered when Dial-Up internet simply was not good enough anymore..

          In my darker moments though I do occasionally wish the Coalition *would* win an election and mess w/ the NBN. Just to see the fall out on the shortcomings of the “cheaper” version whilst I enjoy my fiber connection… just a typical “be careful what you wish for” moment =P

    • @Nobby6

      I find I am starting to use the pithy saying:

      “Its best to keep your mouth shut and be thought a fool than open it and remove all doubt”

      More and more and your contributions whilst amusing in a pre-pubescent manner, are written proof of that saying. Keep it up, you are making dedicated LNP supporters look like intelligent posters.

  11. and I vote Delimiter more accurate then Whirlpool :)
    Where would we be without these 2 web sites keeping us up to date on both sides of the story with the NBN, thank you!

  12. Like a good Labor Party Minister Senator Conroy engages in petty name calling instead of debate. It seems now Fairfax is part of the “hate media”, which is anyone in the media that does not do the bidding of this bully or his party.

    Not long to the next election now Senator, not long for the voters to pass judgment.

    • Thats right because “Juliar” is such a well thought out and balanced description of the PM

      No below the belt name calling from opposition! Especially not from Abbot himself! No sirree! =P

      • I foresee, next year, after the holiday period, the return of “Mr. Rabbit”, one of the PM’s best lines. She might even blame the Diggers for her astonishing accent.

  13. Thanks for the laughs Delimiter, you guys sure drink a lot of Koolaid. The NBN’s OWN documents show it to be:
    1. over budget
    2. behind on its rollout schedule; and
    3. far behind the sign up rates they themselves forecast.

    The blatantly obvious escapes you because you have a sense of entitlement to the NBN, paid for by the taxpayer.

  14. lol.

    Yep and the public can also see the “truth” about the data retention and censorship laws there too ;)

    Conroy… Love the WP reference but don’t direct to many people there they may find out more of your lies.

    • Kane writes “Yep and the public can also see the “truth” about the data retention and censorship laws there too ;)”

      Which BTW The Coalition supports as well, just that they are not “saying it” at this moment. You’d be very ignorant if you think that the Liberals won’t introduce something similar if/when they get to govern.

      • Yes I certainly tend to agree Avid Gamer… as this is happening world wide with both right and left leaning governments.

        However, Delimiter is an evidence based forum… so at this point in time I believe the Coalition are opposing such moves.

        So we can only gauge what we now know. We can’t deride the anti-NBNers for baselessly saying “the monopoly NBN will go broke” :/ but then make assumptions about censorship ourselves…

  15. “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….”

    Do the maths.

    Cumulative equity injection (2010-21): $30,400m

    Cum. equity injection + 7% capitalised interest (2021): $46,847m

    Debt balance (2021): $13,653m

    Gross funding (2021): $60,500m

    Annual interest charge at 7% on $60,500mn: $4,235m

    Levered free cash flow: -$1,391m in 2021 rising to $3,911m in 2028

    Even at 2028 LFCF run rate of ~$4b, NBNco would barely be able to service the interest charge, let alone pay down the debt.

    There’s clearly an interest subsidy on the Govt’s equity funding amounting to billions of dollars.

    Conroy should start telling the truth.

    • Cum. equity injection + 7% capitalised interest (2021): $46,847m

      7%??? The bond rate is 3.5%? TOTAL interest to 2021 is around $8 Billion. Not $16 Billion. NBNCo. do NOT have to pay back interest at a rate of 7%. They pay DIVIDENDS to government, lump sums. Where and how the government fund their own money is THE GOVERNMENTS concern, not NBNCo’s.

      Gross funding (2021): $60,500m

      Adjusted to $52 500m for your “capitalised” interest rate being incorrect.

      Annual interest charge at 7% on $60,500mn: $4,235m

      You just DOUBLE charged the interest right there.

      garfield, you are treating the Government as the SAME COMPANY as NBNCo. THEY ARE NOT. NBNCo. receives its’ equity from the government. It is NOT their responsibility OR requirement by ANY accounting practice to annualise and pay the interest ON that equity. It IS their responsibility to pay dividends to the government AFTER 2023 when cashflow goes +. Whatever costs the government incurs from funding that equity is THEIRS. NBNCo WILL pay that cost through dividends, BUT it is not their cost ON THEIR BOOKS.

        • @garfield

          LOLOLOLOLOLOLOL!!

          You just pointed out your own false workings RIGHT there

          IRR= INTERNAL rate of return. ie NBNCo’s OWN return, NOT the return to the government including interest annualised. Oh and NBNCo pay tax too, some $1 Billion by 2040….

        • Sorry, couldn’t let that one go through.

          You seem to be comparing the capital cost of the NBN as equity as oposed to the actual cash flows required under an IRR calculation.
          You seem to be running some sort of NPV calculation at the IRR rate rather than the WACC of the entity.
          This would give you non meaningful results given that the NPV using the IRR rate would equal zero.
          The appropriate discount rate would be closer to the 10 year bond rate which is currently 4.1% (per SFE) with a small margin say 1% given the regulated nature of the business.

          Using the 5.1% discount rate as shown above would result in leveraged free cash flow being able to offset your exuberantly interest rininvested capital cost at a free cash flow of aprox $3billion. The NBN plan exceeds $3billion in free cash flow by about 2024 according to the graph on Pg 73.

          You really should have deflated future cash flows rather than inflate past cash flows. Well according to wiki anyway.
          http://en.wikipedia.org/wiki/Net_present_value

    • Can you please just stop repeating the same junk over and over? It’s getting quite tiring, you’re not adding anything at all to the conversation.

          • @garfield

            You haven’t responded to my argument except by criticising randomly with no opposing information. What can you expect when you are adding nothing else to debate?

          • “You know you’ve won the argument when they whip out the comments policy.”

            Hey Garfield,

            we haven’t met previously, but I am the administrator of that comments policy. Just as an FYI, you are now banned for the next two weeks for repeat spamming the same post on the site, sledging other readers and posting irrational comments. Some of your comments have had merit over the past day since you’ve started posting, but you descended rapidly into rank insults towards the end.

            Go find your own patch of sun — this one’s taken.

            Cheers,

            Renai
            Delimiter Ubermind

  16. Renai, you can add to you list of bad NBN journalism the story of the “NBN hacker” who merely hacked into an ISP that would LATER sign up to provide services OVER the NBN. At the time of the hacking the ISP had no relationship to the NBN and was only providing services over OTHER links (eg Telstra). It was no more a case of hacking into an “NBN provider than a bank robber holding up a bank that would LATER agree to provide internet banking over TELSTRA lines be an attack on a Telstra provider. Or even a pizza store that would later offer phone orders over a Telstra phone. Yet the “NBN hacked” headlines still live on in Google and none of the Mainstream Media ever corrected their headlines.

  17. The converted, you are preaching to.

    Of course, Rupert Murdoch papers are all taking the line that the NBN will be bad because Rupe’s companies (including 20th Century Fox) are all stuck in last century. The NBN may actually assist people to fix flawed business models and improve content delivery.

    I was amused by the suggestion that a coalition government would spend any money on public health rather than infrastructure – John Howard’s main focus in the “health” area was to do as much as possible to destroy Medicare. How will Abbott be different?

  18. I just wanted to post a general note of thank you to this thread for clarifying to those of us (such as myself) who are – in accounting terms – financially illiterate. The points and calculations that posters like Lachlan and Seven have posted provide an excellent precis of the calculations involved without my (and others) requiring the necessary financial education.

    IMHO, the NBN will not earn as much direct revenue and the financial optimists are calculating. The indirect revenue and profit (through improved education, business, health, etc.) will however far exceed those same expectations. This is (as they used to call in Russia) a “Hero Project” that will provide the overwhelming majority of 2-3 generations vast benefits (just as the copper network did last century) and it deserves backing and respect.

    • @Michael

      While I personally disagree it won’t make it’s monetary return, I DO agree that regardless, its’ INDIRECT return will be many times that of the total cost to build and operate it.

      Yet this seems completely lost on most conservative ideological types :(

    • Look at it a different way Michael. Consider the NBN to be a massive negatively geared property. Theres a loan, interest repayments, and revenue being created. At some point, the revenue becomes more than the interest payments, and it starts reducing the loan.

      Until that point, financially naive people will think it an expensive waste of money, but after that, its a valuable asset thats worth the cost.

      Yup, the NBN is just one giant investment property for communications.

      • @michael Real world analogy – the NBN is like Road Infrastructure, like a toll road (run by Govt.) that bypasses several Kms worth of city streets (please god can we have one in Adelaide).

        Large capital outlay, with a return from the tolls, but there is a further economic benefit that extends to users of the road much in excess of the individual toll paid by users in the decrease fuel costs, decreased pollution, increased throughput allow more business to use the road because it is faster and interruption free.

        “Introducing toll roads to improve the transport system is right for the time. While toll roads represent a financial and social cost, they also bring significant benefits.

        “A survey of the Sydney toll road system by accounting firm Ernst and Young found toll roads have delivered a $22.7 billion economic benefit to NSW and broader Australia. They increased NSW’s gross state product by $1.9 billion in 2008, rising to an estimated $3.4 billion by 2020. The economic contribution of toll roads is the equivalent of the economic impact made by the Port Botany container terminal; they help reduce environmental emissions by an economic benefit of $1.1 billion; and provide direct advantages such as travel time savings, vehicle operating cost savings, and have reduced accidents and vehicle emissions.”
        http://www.adelaidenow.com.au/news/opinion/introducing-toll-roads-is-a-political-tar-baby-but-it-is-critical-to-fund-intrastructure/story-e6freagu-1226420422331

        • Sorry, but I can’t let the “toll road” analogy go without argument.

          Australian governments have made a decision that, instead of going into debt for a short period of time to build necessary infrastructure, they will instead “outsource” it.

          What this means is that the taxpayer ends up paying for the road several times over, at many times the price that would have been paid for public works. I’ve seen a paper about this, but can’t recall where – regardless, what you’re referring to is a beneficiary of this change preaching the benefits of them getting more money.

          If the NBN were managed as a “toll road”, it would cost five times as much, serve only 20% of the population, and take 100 years to be returned to public ownership.

        • @Brucie

          I’m afraid I have to disagree with the entire analogy of toll roads being like the NBN Brucie Boy. The idea is similar, but has an important difference. It’s a difference governments don’t seem to be able to comprehend and allow for on toll roads, even though it gets consistently proved. Unless the toll road is cheap as chips and cuts an hour off your drive (think M5 when it was originally built) motorists WON’T simply use it without thought. The average spend on tolls in Sydney is ludicrous, something like $120 a month….AVERAGE! Governments don’t seem to understand that people would rather sit for 30 mins in traffic than pay $8 overall EVERY day. Hence toll roads, particularly in Sydney, end up making regularly 30-50% less money for a number of years than predicted as people have a choice and choose the cheaper option.

          On the NBN side of things, in 80% (or more) of cases the NBN will be CHEAPER and FASTER to use than what people have. AND after 18 months they MUST use the NBN if they want a fixed line broadband connection. The takeup rate, give or take a few stubborn points of percent who refuse to use it and swap to mobile because of political bias, is almost GUARANTEED. Unlike a toll road.

          • “Hence toll roads, particularly in Sydney, end up making regularly 30-50% less money for a number of years than predicted as people have a choice and choose the cheaper option.”

            Ditto the Clem7 Tunnel in Brisbane:
            “Patronage of the tunnel decreased by more than 65% in the week following the introduction of a reduced toll period, and remains considerably lower than the predicted traffic volumes.[8] Despite being completed on-time and on-budget, the Tunnel has been an economic failure due to incorrect predictions of traffic volume. RiverCity Motorway has been unable to collect enough tolls to pay the interest on its $1.3 billion debt and went into receivership.[9] With no hope of profit, and therefore no dividend, RiverCity Motorways shares are now worthless, costing investors millions.[10]”

            http://en.wikipedia.org/wiki/Clem_Jones_Tunnel

            Stand by for news of the Airport Link Tunnel :-)

  19. Renai,

    Delighted to see you take action against garfield, it’s rare to see an admin take action on idiotic commenters like that. I also totally agree that online sites like this provide far higher quality coverage of important issues than the mainstream media, especially tv. Not so much printed media though. One can go on about the inflammatory nature of The Australian and the like all they want, but I understand that such papers have fairly low readership now, is that true? Also considering that the online version of the Oz now has a paywall in place.

    • @Daniel

      Unfortunately, while the readership may be dwindling, the tabloid nature of the newspapers currently, means people are likely to just glance at it for “entertainment” as much as they used to read it. But what they don’t usually realise is that the idea seats itself IF they agree with the bias of the article, which, of course is why the newspapers tailor their article viewpoints to their readers.

      While newspapers still print biased rubbish, many millions will still read or hear about it and assume it is factual. After all, it’s printed in a newspaper….why wouldn’t it be….

  20. Couldn’t agree more with this article – mainstream media is corrupting the minds of fellow Australians.

    I have a website http://www.nbnfacts.net.au (hope this isn’t considered spamming) that I direct anyone to that is misinformed about the NBN.

    Some people still do not understand but I find the more people I educate the better it is for everyone.

    Good work Delimiter.

  21. @seven_tech

    Having worked some twenty years ago for News Ltd, I could not agree more about the bias, word context twisting, and selective quotations of the print (and in the latter, electronic as well) media to sensationalise, make something out of nothing, just to sell their rubbish.

    However, Delimiter is also full of bias. The article ceases to be professionally informational and becomes just another personal blog the moment the publisher inserts their view – which introduces a bias. So in the end they are no different really.

    • Im sorry Nobby6 but I disagree on Delimiter.

      Renai very carefully separates HIS opinion from the actual news. He is nothing but factual and balanced in the ‘news’ section, clearly differentiating it from his opinion.

      This is ow newspapers used to work- news articles with clearly defined analysis or opinion pieces separate. Now, the bias of the journalist is clearly inserted in the article.

      There is nothing wrong with opinion. But it is not fact. Fact and opinion should ALWAYS be separated, as Renai does.

  22. “There is nothing wrong with opinion. But it is not fact. Fact and opinion should ALWAYS be separated, as Renai does.

    Of course not, everyone has one, but the moment you introduce it in your story, it is a bias, there is no escaping that.

    How about all journo’s do it, can you image the outcry and switchboard flooding, if your nightly 6pm news broadcasters or the story presenters inserted their opinions into their stories… christ, the sky would probably cave in!

    By the way, if you have so much certainty about the author, you would surely know Renai is actually a “she” not a he :)

    • The difference being Nobby6…

      Renai, endeavours to be factual as much as is humanly possible… whereas it is obvious mainstream media see the NBN as a threat to their rags and are also aligned to conservative interests/politics and report according to these interests NOT the (if any) facts.

    • By the way, if you have so much certainty about the author, you would surely know Renai is actually a “she” not a he :)

      Wat

  23. …and in other breaking news, the sun came up this morning.

    Excellent article, but I can’t help feeling that the horse is so dead, it’s starting to smell. It’s *us* that’s protected by the AFR paywall.

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