analysis Liberal MP and former Optus executive Paul Fletcher’s highly critical article about the new corporate plan released last week by the National Broadband Network Company contained a number of generally factually accurate but contextually misleading statements about the project, analysis has shown.
Last week, the Federal Government published NBN Co’s latest corporate plan, covering the years up until 2015. Following the publication of this document, Liberal MP and former Optus executive Paul Fletcher published an article on his website containing a number of criticisms of the project. Fletcher’s website is currently not available, but the article is also available on the website of the Financial Review. In general, it alleged that the new corporate plan showed NBN Co had not delivered on its original promises, and that the company’s performance was not comparable with that of similar private sector projects.
Following the publication of the article, Delimiter invited readers to help fact-check Fletcher’s comments, in the interests of keeping the debate over the National Broadband Network objective and based on fact. This article is a follow-up to that article and the discussion amongst readers it created.
The first contention in Fletcher’s article is that when the current NBN project was initially announced in April 2009, that the Government promised it would be “operated on a commercial basis . . . and involve private sector investment”. This statement is true. The transcript of Prime Minister Kevin Rudd’s speech on the day can be found archived online.
Fletcher then goes on to state that in mid-2010, Communications Minister Stephen Conroy abandoned this commitment to private sector investment, after receiving advice from the NBN implementation study conducted by consulting firms McKinsey and KPMG that private investors would regard the project as too risky.
He then links this statement to a claim that NBN Co is “hopelessly behind its targets” when measured against its first corporate plan released in late 2010 (PDF), appearing to imply that perceived concerns by private sector interests that the NBN was too risky a project to go ahead with were legitimate as it had not met its targets. “If NBN were funded by private sector investors, the CEO would probably have been fired by now, and the rollout might already have been shut down or seriously scaled back,” wrote Fletcher.
However, close examination of the NBN implementation study reveals that Fletcher’s statements are misleading as they do not reflect the full context or nuance of what the McKinsey report actually found. Quoting from page 368 of the report:
“Government should retain full ownership of NBN Co until rollout is complete. Private sector investors will require a high return on their investment due to a different assessment of the risks and rewards of the NBN initiative to Government (eg different perceptions regarding Government’s commitment to completing the project and of appropriate compensation for risks). In addition, taking on private sector equity will be detrimental to the pursuit of the Government’s policy aims that include social objectives as well as achieving widespread coverage and increasing competition. These considerations relate to both traditional methods of raising equity as well as issuing equity for vended-in assets.
As a new startup with capacity to take on private sector debt at the appropriate time, NBN Co will be able to achieve some of the benefits of private sector equity. Government should restrict NBN Co’s ability to raise private sector equity before the end of rollout.”
In short, although McKinsey and KPMG did find that private sector investors would not find the NBN’s projected return on investment to be high enough due to perceived risks involved in the project, McKinsey and KPMG did not find that the project was inherently risky, as Fletcher appears to argue — but that it would make a financial return on its investment. It found only that governments have a different understanding of risk than the private sector. For example, they can control regulatory settings in their favour as the Federal Government has extensively done so with the NBN — while private sector firms cannot.
In addition, the two consulting firms found that there was no need for NBN Co to take on private sector investment in the early stages of its life, and that to do so would actually hamper the project, as private sector investors would not focus on the non-financial social policy aims which the Government aims to fulfil through the NBN project — creating “conflict”.
“The need to report to private owners and to justify actions taken to secure policy goals would distract management attention from daily operations,” McKinsey and KPMG wrote. “Minor shareholders are likely to seek rights and protections that would frustrate the achievement of these goals.” This shouldn’t come as a surprise; private sector investors are obviously fundamentally interested only in maximising their own financial self-interest — not achieving broader social policy aims. But Fletcher doesn’t mention this factor in his article.
Fletcher also appears to have taken a similar approach to NBN Co’s rollout targets. He states: “The first corporate plan promised that by June 30 this year there would be 317,000 premises passed or covered on the fibre network; the actual number is 39,000. There were supposed to be 137,000 premises with active service; the actual number is 3500.” This is correct, according to the 2010 NBN Corporate plan:
But the real issue is that in his article, Fletcher does not break down the number of fibre connections NBN Co was planning to have made by June 2012 or consider extenuating circumstances in the rollout. NBN Co was actually only slated to have built some 139,000 fibre connections itself, with the rest either being wireless connections or being built by third-party companies and then transferred into NBN Co. In addition, as Communications Minister Stephen Conroy and NBN Co CEO Mike Quigley have repeatedly emphasised, NBN Co’s greenfields project has been the subject of several policy changes as new facts have come to light about the way in which NBN Co can best interoperate with new estates developers for greenfields rollouts, and this area has also been affected by the lengthy negotiations between NBN Co and Telstra — with some responsibility transferred from NBN Co to Telstra in this area.
With respect to the fibre rollout in general, as NBN Co’s new corporate plan makes clear, this has been delayed by six months by the nine month delay in the highly complex negotiations between NBN Co and Telstra over the deal which will see Telstra migrate its customers onto the NBN infrastructure and shut down its copper network. There is an argument to be made that this delay could have been taken into account from the start. However, the process is also believed to have been one of the most complex negotiation processes in Australian telecommunications history, meaning it was difficult to predict how long it would take or if it would result in a successful outcome. If you take this delay and uncertainty into consideration, NBN Co is broadly on track with its rollout projections. This is how the network rollout has performed to date and will perform in future:
However, Fletcher acknowledges none of these factors in his article; once again focusing on headline figures but not examining the extensive background factors which have affected NBN Co’s projections over the past several years.
Fletcher also makes a number of other claims in his article which do not include context. For example, the executive points out that both Telstra and Optus deployed HFC cable networks to millions of Australians in the mid to late 1990’s. “The Optus HFC network was announced in 1994, and a rollout to more than 1.4 million households was completed by the late 1990s at a cost of about $4 billion,” he wrote. “Telstra rolled out a larger HFC network (to 2.5 million households) in roughly the same time frame. It has been more than three years since Labor announced the NBN, and we now have a grand total of 3500 premises taking a fibre service. To achieve this outcome has required taxpayers to contribute $2.8 billion of equity to NBN to date.”
However, Fletcher does not acknowledge that unlike both Telstra and Optus, NBN Co was a startup set up from scratch rather than an established telecommunications company with existing planning and managerial resources and engineering and construction staff. As Telstra and Optus did in the years before actually deploying their HFC cable networks, NBN Co has spent the majority of its first several years of life planning its network deployment. Fletcher does not mention this planning process or the fact that NBN Co has largely completed it and has signed all of its construction and equipment supply contracts; meaning that it is now in full rollout mode, with millions of Australians to receive the NBN over the next three years.
If you take into account several years of planning, the NBN will actually be delivered on a very similar time frame to the HFC networks of Optus and Telstra, to a much larger scale. Where those networks reach 1.4 million and 2.5 million premises respectively, the NBN will reach 3.5 million premises by mid-2015 — a number substantially greater than that of either Optus or Telstra. In addition, the network is much more complex than either of these two predecessors, as it will be required to provide wholesale services to retail ISPs — which neither of the HFC networks do. This aspect alone of the NBN has required a significant amount of planning. Some more detail about the history of these two networks can be found online in PDF format.
In another statement, Fletcher refers to “the collapse of Labor’s previous plan, announced in March 2007, to build a fibre-to-the-node network in a joint venture with a private-sector company, with the contribution from taxpayers to be a mere $4.7 billion”. However, Fletcher does not acknowledge that the then-Rudd Federal Government moved away from its initial $4.7 billion fibre to the node plans following an extensive and detailed recommendation (PDF) by a panel of experts at the time that the initial plan would be impossible to deploy; given that the private sector was unable to support the model proposed by the Government. It is for this reason that the Rudd Government pursued a much more ambitious, primarily Government-funded fibre to the home network.
In general, it’s hard to find direct factual errors in Fletcher’s article last week. However, it is a fact that the Liberal MP, in his article, did selectively discuss facts about the NBN rollout without giving any of the context behind those facts; as well as making links between those facts which do not appear to exist, and overly simplifying discussion one of the most complex infrastructure projects Australia has ever deployed. There are other examples we could give, but I believe the examples above are sufficient to demonstrate that Fletcher has not told the whole story about the NBN in his article last week, and has presented a limited view of the project without context or sufficient background to make his case that it is mismanaged.
From an Optus executive of Fletcher’s stature (he was the company’s regulatory chief, and dealt frequently with the Government in the lead-up to the NBN, a project which Optus strongly supports), I think the Australian public and Fletcher’s own constituency can expect more than this. More detail, more context, more understanding, and a more sophisticated argument. For a former telecommunications executive of high standing to cherry pick NBN facts out of context and use them to slam the project as a whole is, to put it bluntly, not good enough.
This whole NBN debate has been a real eye-opener for me. It is the first massive government project where I have had sufficient background and knowledge to be able to tell facts from fiction.
I am amazed at just how willing people have been to lower themselves, sometimes to the point of being outright deceitful, to further their own agendas. Not only to the point of being deceitful, but also at the cost of Australia, and the future of our country.
“I am amazed at just how willing people have been to lower themselves, sometimes to the point of being outright deceitful, to further their own agendas. Not only to the point of being deceitful, but also at the cost of Australia, and the future of our country.”
This amazes me on a daily basis when it comes to the NBN.
It’s not confined to the NBN. Extrapolate the NBN issue to the more serious question of asylum seekers where life and death is involved.
“Honourable” members and senators know both parties’ policies concerning the refusal to provide facilities for people to join a queue encourage risk taking http://goo.gl/LWBPF. Meanwhile they weep in the Big House and publicly rend their garments over the issue.
Then in moments of bi-partisan spin on programs like Q and A the likes of Pru Goward say politicians are generally “good people”.
The bar just gets lower and lower. And how is it that in the context of the alleged pain of the carbon tax, Tony Abbott has being saying nothing about the reasons for the other larger, state government induced increases in electricity prices until the PM has raised the issue for other reasons?
Sadly, Renai, it doesn’t amaze me the depths to which the Liberal Party has sunk, because it displays the same contempt for the truth in every other area.
Do yourself a favour and research the home insulation program (Pink Bats) and discover that not only did it meet its objective of reducing energy consumption but also that houses that had insulation installed under the program are actually many times less likely to catch fire than those with insulation installed before the program. Reality contradicts the beat up. But one of the first things you’ll hear from the Liberals when you mention the NBN is the presumption that this government is somehow incompetent and the batts will be trotted out.
Do yourself a favour and research the success story that is the BER. Then compare it to the Liberals’ rhetoric. Ditto.
On and on it goes. A persistent narrative trying to portray a mostly good government as hopeless, incompetent. The lie-mongering that goes on about the NBN is simply part of this picture.
+1
And Renai is creating a template for peeling back the layers of political and media bullshit that sit on top of public projects.
It is I think the way governments of any persuasion can push back against the bullshit that gets reported on any large expenditure of public monies whether it is an investment as per the NBN or a straight capital expenditure with no direct return such as roads and hospitals.
At least now we can choose whether to make an informed opinion or not.
Right on Paul…
There’s probably lots that I could say on this, but I’ll just talk about a few things.
First there are two people who can do this – Telstra or Government. Well not really, Government is full of Politicians, not engineers.
After Telecom was privatised and became Telstra it was the universal provider of last resort.
The key lies in an event that occured during Trujillo’s tenure as CEO of Telstra and its proposition to the ACCC to build the FTTN network.
Now what happened after this was unusual and a defining that changed of course broadband. The government then decided that it will take over telecommunications from Telstra. Government is run by politiicans, essentially circa 2007 was government using broad brush decision making with primiarily political agenda.
@TT Boy
Isn’t it very fortunate then that NOBODY from the government is actually having anything to do with the building of it then. NBNCo. are building it and I believe if you look at the NBNCo. board you’ll find every single one of them is qualified to be involved in building the NBN. None of them are politicians for a start, which helps.
Telstra had two chances –
1. But Telstra pulled out of FttN negotiations with the ACCC, which is widely forgotten/overlooked.
2. When given another opportunity, Telstra forwarded a non compliant RFP (and don’t forget the other “great white hope” G9/TERRiA, didn’t even bid in the end, after all the hoopla – only Optus did from the group iirc ).
3. Following the finding of a panel of comms experts set up by the government, in relation to the RFP’s, concluding that FttN was “unviable” anyway, the government had to move forward.
Doing anything else but FttP now (let alone 2013 onwards) is imo, ridiculously returning us to where we could have been circa 2005, but Telstra (Solstra) were only interested in game called Mexican stand off (pun intended)…
Seems the opposition will give Telstra another chance (3 times lucky perhaps) to regain their absolute stranglehold over our comms and I bet David Thodey isn’t egotistical enough to let it slip through his dedos.
+100
+1
I’d hate for someone to be dissappointed in me the way I am in them.
I’m most dissappointed in Turnbull for not pulling Hockey up.
Excellent work again, Renai. Your point about the time frames, and the obvious fact that Telstra and Optus both put in detailed internal planning ahead of time before their own HFC rollouts, is very well made.
One thing that Fletcher, Turnbull and the other armchair critics consistently fail to do is to point out how exactly NBNCo is said to have failed, or what Mike Quigley did (or failed to do) that reasonably could have been done differently with knowledge available at the time.
Instead, they retreat to their trenches and play the bare politics of the thing. Nothing but half-truths, misrepresentations, and a complete lack of real engagement or constructive criticism. And one need not hope for so much as a whiff of an actual, detailed proposal of their own.
Coalition clowns deliberately misleading when it comes to the NBN is nothing new but Fletcher here is a special case. It’s clear that he wants Turnbull’s job since he’s just not doing a good enough job fooling us after all. I question Fletcher’s ability to fool us though. So far he’s not doing too well. I dont think he’d make a very good shadow communications minister despite his employment at Optus.
Yet another example where businessmen make for very poor politicians, I’m afraid… very few have the taste or temperament for the tedious business of government in the rel world.
I guess its quite likely that Fletcher is eyeing up the telecoms portfolio in a future Coalition government, its the policy area he knows best.
Having said that, I don’t envy the job facing any incoming Coalition communications minister – they have a very tough job on their hands in terms of stopping the current NBN deployment and then actually putting their own policy into place.
The other fly in the ointment could be the role of the Senate in this, if the balance of power is held by KAP, DLP, Greens then Christ only knows where we end up as I am guessing Abbott would need to get legislation through both houses to actually repeal current NBN legislation?
Ah, yes, this is just the sort of political stability we need for a $37 billion project…..:)
Tony
Legislation Yes
However the Comms Minister as THE SHAREHOLDER can instruct the Company NBNCo to change direction, replace the board, fire or hire executives.
His power is that of the owner of the company
Thanks Abel.
I guess the tricky thing for Turnbull – as far as I understand the Coalition policy – is that he will have NBN Co. deploying the FTTN network rather than the current FTTH network.
The problem, I suppose, is that he will need to re-structure the Telstra deal in order to buy their copper network for NBN Co. deliver FTTN rather than FTTH – would this re-structuring of the deal require parliamentary approval?
Separately, what of the Telstra/Optus HFC networks? From his comments I think Turnbull wants these networks to stay operational to provide ‘facilities based competition’ but would this mean these networks also being declared open access too? If so, how would this work?
No doubt that FTTN would be cheaper and faster to deploy than FTTH in the Aussie market, but there are still a lot of things that need to be cleared up.
Also, anything that needs Senate approval is likely to be a huge issue and I guess we should also remember that the result of the next election – despite what the so called experts say – remains very much in doubt.
From a QLD perspective I can tell you that Campbell Newman is doing an unbelievably good job of trashing the LNP brand already and possibly poisoning the federal electoral well for Tony Abbott.
The QLD parlament is special(being a central QLD resident my self) due to QLD not having an upper house. The LNP can do what ever the F they like :) Thank QLD’s past for that one, IDIOTS, dosent matter what side of politics ^_^
Its for the above reasons that Turnbull is very unlikely to be want to be seen in charge of any such changes.
It will be far easier for the Liberals politically to simply use their power as shareholder of NBNco to direct it to sell itself off – which essentially means transferring control to Telstra.
The Liberals certainly don’t want to “own” the mess that will result if NBNco were to actually engage in redesign.
It suits the Liberals down to the ground to sell off NBNco. It marries with their ideology and it gets the whole problem out of their hands.
And what happens then? Well Telstra will then own (indirectly) NBNco and this new subsidiary won’t be constrained by the terms of the Telstra sale act. Telstra will have itself a brand new monopoly and as such will have no constraints in continuing with the basically fibre design.
The future? A privately owned, fibre based monopoly. And instead of paying (say) $59.95 for access, it’ll cost you more like $99.95.
You were warned.
Hey everyone, please note I’ve made an update to this article to reflect the fact that Fletcher was actually correct in his citing of NBN’s projected rollout figures from the 2010 corporate plan.
An honest journalist. We should have you stuffed and mounted so future generations will know what one looks like ;)
Future generations will not know what the term “journalist” means ;)
So they will be just like a significant number of current journalist.
>The first corporate plan promised…
I *strongly* disagree with Fletcher’s assertion that a projection is a promise.
NBNCo calls them “targets” and provides a disclaimer:
>These targets are indicative as the rollout is dependent on:
> The availability of exchange facilities for the location of the semi-distributed PoIs;
> Negotiations yet to finalise on commercially attractive terms the procurement of Greenfields Build-Operate-Transfer (BOT); and
> Securing contracts with suppliers and construction contractors on competitive terms and conditions.
+1
Nice job Renai. I’m afraid Fletcher is likely to pay little attention. But it is good to lay out the balance regardless.
Moving on and finding a way through the sewerage….
Article summation:
Liberal MP excels at strawmanning.
Extra Extra! Sky blue, Earth not flat!
If we don’t call them out on it, who will?
But the sky is still falling, and that wolf is still attacking the sheep, right?
If Telstra and Optus HFC installation was “better”, perhaps it was because they could choose the parts of the country that suited them. Presumably the NBN could also look better if it did the same thing.
The revenue would probably start to flow sooner too.
Actually, Labor’s puppet, the NeverBuiltNetwork, has a pretty good excuse for its failure to hit any targets because Labor keeps moving the targets to try to cover up the continual failure of yet another one of its many failed projects.
The Coalition’s main concern after 2013 is how are they going to find the money to pay for the enormous amount of BORROWED money that Labor has squandered on the NeverBuiltNetwork without achieving virtually anything.
Don’t overlook the FACT that Telstra had to meet the requirements of the Government Universal Service Obligation which meant Telstra had to provide a phone to everybody who requested one. This resulted in many very uneconomical projects for Telstra which meant it could cost up to $40,000 just to supply a single channel radio link to just one customer.
And before the impractical NbN dreamers rush in and screech SATELLITE SATELITE!!!!! it may come as a shock that customers strongly dislike satellite because of the very irritating DELAY on a voice phone call.
Telstra used the single channel radios because even though the customer may have been only say 40km away from an exchange the terrain (hilly mountainous deep ravine etc) made anything other than a VHF or UHF radio solution enormously expensive – and the slippery NeverBuiltNetwork is changing its targets to conveniently avoid these difficult very expensive situations = corruption.
@NeverBuilt
Well done in confirming you don’t know about the NBN. Those being passed with fibre will get a USO telephone service through the NBN. Those on NBN satellite or wireless have the option of the USO telephone via Telstra copper, which won’t be decommissioned in those areas for exactly the reason you’ve given- it is currently too expensive to provide fibre to all those premises in the 7% with fibre straight away. As it was for Telecom Australia.
Do some history reading on the copper network rollout. It tok 35 years to get above the 90th percentile. We’re more urbanised than then, hence the 10 years for 93%.
@ NeverBuiltNetwork
“Actually, Labor’s puppet, the NeverBuiltNetwork, has a pretty good excuse for its failure to hit any targets because Labor keeps moving the targets to try to cover up the continual failure of yet another one of its many failed projects.”
*** Sounds like something Tony Abbott would say :/ Did he?
“The Coalition’s main concern after 2013 is how are they going to find the money to pay for the enormous amount of BORROWED money that Labor has squandered on the NeverBuiltNetwork without achieving virtually anything.”
*** But you’ve all been telling us that taxpayer money has been directly funding the NBN build. So that claim was wrong after all then – thank you! It is debt, as we said all along not taxpayer funded… so enter new FUD about debt instead of taxpayer.
*sigh*
Was going to continue but why? It’s all been said and even pretty accurately prophesied what the response would be to the new NBN report, a few days prior.
http://delimiter.com.au/2012/08/03/delimiters-curious-response-to-uk-superfast-report/#comment-485099
“Sigh” indeed Alex.
I’ll bet London to a brick that you could trace this ideologue misinformer back to an LNP office somewhere…
Thing is, why bother using a forum such as this to sprout crap and lies – almost everybody here knows it’s total bollocks…
Frankly Markie, I think they do it simply to piss us off… there can be no other reason.
Otherwise, when asked to substantiate their claims they would at least try.., but they don’t, because they can’t, so they disappear and reappear stating the same bullshit again at the next thread, even under new names :/
Oh.. maybe.. but usually Liberal Party staffers are a bit more coherent in their english style.
This one feels like an Andrew Bolt denizen. You get similar sounding rants on his blog.
You also see it in the climate denial blogs.
One of the philosophies of Tai Chi is to “…take an inward back, and let the arrows pass harmlessly by…”
I get a lot of practice… :-)
You only have to look at *every* ADSL rollout undertaken in this country to realise that no private enterprise has any interest whatsoever in any kind of “social policy” outcome, and so it is absolutely valid that NBN should not seek private funding before the rollout is complete.
I am not aware of how many areas of Australia have no broadband whatsoever, but there is certainly already a gap in terms of economic pricing between residents who are stuck with Telstra’s ADSL infrastructure (or an ISP reselling same) and other commercial competitors who have installed their own ADSL infrastructure.
Using the ADSL rollouts which have been undertaken by the main industry ISPs, the closest you seem to get to worthwhile social outcomes are those where the company made a profit *and* provided a benefit to consumers. For example (and not to single them out, only because it is a convenient example) I remain wholly unconvinced that Internode’s rollout into the Koorong area of SA was motivated by anything but profit, and the social outcome was more by chance than by design.
So history shows us that the Liberal governments belief in the market supplying services also shows that these same commercial operators will only do so where it is profitable to them. I have no idea whether anything above and beyond that was ever expected, but none of them has ever committed themselves to get maximal coverage of an area with profitable areas subsidising unprofitable ones (as NBN is effectively going to do, to yield a cost-average price for all of Australia).
And from my experience you won’t see many individuals putting their hands up to pay more so that everyone may receive an equivalent experience. You only have to look at Whirlpool for evidence of that.
Which simply goes to reinforce the fact that the NBN needs to put the social policies of the NBN ahead of the profit expectations of shareholders in rolling out this network, if it is to have any hope of achieving a level playing field for mostly everyone.
But the NBN is also a double-edged sword – if it does not complete its rollout to the expected 93% of Australia it will have a detrimental rather than positive effect by virtue of of increasing the gap between the different types of broadband available to different customers and localities.
Interestingly,despite the stated NBN objectives of bringing broadband to areas which most need it, the reality is that the rollout is far from altruistic in this sense. The example near to me is Preston VIC, already serviced by approximately six non-Telstra ADSL suppliers, and yet is it targeted to receive the NBN rollout in the next 3 year period.
Clearly Preston is viewed as a highly profitable exchange to commit to and given that there is already ample competition amongst the six or so ADSL suppliers, it hardly seems to fall into the “most needed” category by my reckoning. In that regard NBN is still failing somewhat.
:…there is certainly already a gap in terms of economic pricing between residents who are stuck with Telstra’s ADSL infrastructure (or an ISP reselling same) and other commercial competitors who have installed their own ADSL infrastructure…”
I’m stuck with ADSL+1 because Telstra won’t let my ISP into the local exchange to install their own infrastructure. Oh, I can have ADSL+2 if I go over to BigPond or deal with someone who wholesales from Telstra…
So, as far we’re concerned FTTP NBN can’t come quick enough!
All the indignant schoolmasterly protestations at the very idea that the dreamtime NeverBuiltNetwork won’t ever be built because there will actually be a real competent government in Australia after 2013 sound a lot like the ALP not answering questions.
The FACT is that the NeverBuiltNetwork is a dream child of the soon to be past tense Labor Party and, as such, it is totally dependent on the ALP actually retaining power and everyone knows Labor will lose the election in 2013. The Australian public are well aware of this and will be most reluctant to be sucked into the NeverBuiltNetwork until after the election next year. A criticism of the NeverBuiltNetwork scheme is that it totally ignores the much greater growth occurring in mobile services as it is pretty difficult to drag a fiber optic cable along as one walks along the footpath or is in one’s car.
Once the Coalition take over they will be faced with repaying the enormous debt incurred by Labor and the NeverBuiltNetwork represents a massive squandering of BORROWED money which, believe it or not, has to be paid back. The NeverBuiltNetwork is racking up massive cost blowouts and achieving very little and Labor is now changing the moving targets yet again and directing the NeverBuiltNetwork to ignore needy customers and only go for the MONEY – just like Telstra etc.
As is well known the Coalition has a different concept of a universal broadband network which is not quite so heavenly glorious but is aimed at both fixed AND mobile needs and is achievable this century and at a reasonable cost. Fairly obviously Labor’s inefficient and hugely expensive public service style NeverBuiltNetwork bloated bureaucracy will be replaced with the vastly more competent, efficient, and experienced Telstra which has a vast amount of proven inhouse expertise in fiber optic cable networking.
This arrangement is much better as Telstra, with Coalition financial assistance can concentrate on providing improved service to those needy customers, as Telstra already provides high capacity service to Business customers and does not need to madly try to chase customers like the hopelessly deep in debt over its ears with BORROWED money NeverBuiltNetwork. As Telstra already gets revenue from copper customers it can much better coordinate the changeover from copper to fiber optic cable giving preference to those customers with poor service now – how unlike the money grubbing NeverBuiltNetwork.
Looking at the larger picture Australia has lots of urgent infrastructure projects like roads and railways which cost a lot. While one can order physical goods over a 100Mb/s network the actual goods cannot be delivered over the 100Mb/s network – they must be transported by road, rail, or air and these modes of transport need infrastructure. Thus the Coalition must balance the available funds amongst ALL the infrastructure projects and not concentrate on just one. Just like NSW the Liberal Government will have to cope with the enormous debt incurred by the spendthrift irresponsible Labor Government and will have to curtail unrealistic huge expenditure on just one item like the NeverBuiltNetwork.
You REALLY don’t know what you’re talking about do you NeverWhoEverYouAre do you?
Monies for infrastructure (which the Howard Gubment shamefully ran down) comes from the annual Budget.
Funds for the NBN come from Govt equity bonds – not the annual Budget, so putting the razor to one thing won’t free up funds for another.
Understand these basics and you might, just might be taken seriously. Thus far you’re marked down with a capital F…
What a load of turgid, self contradictory rubbish.
You acknowledge the money for the NBN is being borrowed. Yet in another sentence you point to urgent infrastructure, not realising that if you borrow money to build the NBN, then the money needed to build roads is still there in the form of ordinary tax revenue.
Then you suggest the Liberals should cancel the NBN, thus cancelling the revenue stream that the NBN will create. Now what you’re saying is they should scrap the NBN, use money that would have been used to pay for roads to pay back what was borrowed, and then let Telstra make the billions of dollars that would have been made by NBNco.
Epic fail! :)
The unbelievable impracticality, lying, corruption, and deliberate avoidance of providing a business case that has riddled the NeverBuiltNetwork from the beginning is quite eloquently explained in:-
http://www.gizmodo.com.au/2012/08/beyond-the-nbn-business-model/
Perhaps the very rubbery way the NeverBuiltNetwork was originally proposed was to allow targets to be freely moved about to allow failures to be conveniently disguised.
The very dubious deliberately misleading way the massive expense of the NeverBuiltNetwork has been disguised as an “ASSET” to avoid it appearing as an massive expense on the budget it done simply to prop up the very unstable “Budget” of the ALP. Expenditure on other assets such as railroads and highways are little different and the money from equity can be diverted to these.
In any case the Coalition will not keep the massively overstated NeverBuiltNetwork as a fictitious “ASSET” as it will simply transfer it to Telstra as payment for Telstra to proceed with the Coalition’s much more practical scheme.
I know it is most annoying when it is pointed out but when poster 2 makes disparaging personal comments about poster 1 because Poster 2 does not have any believable factual evidence to refute Poster 1’s post then Poster 2 is really saying he/she agrees with Poster 1 but is knocked off his/her bike and expresses his/her frustration by launching into some rather defeatist pointless personal attack which simply proves the above. So Poster 1 can take it as a compliment.
Piling on the adjectives really doesn’t help your case.
Let me help you out.
If you borrow money to build something – say a house – then that house is an asset right?
Yep, thought so.
Mr/Ms Ungulate,
If one purchases a house with borrowed money that house does not really become an asset until it is paid for. In accounting terms it will be called an asset.
Now if that house was built by a ex-unionist Labor builder who forgot to put those metal covers on the house foundations and the house then fills up with white ants the house becomes a liability.
This is very much the case with the NeverBuiltNetwork which is very much a liability as it is costing huge amounts and there is very little to show for it. Honest accounting (totally unknown to Labor) would also show the operating costs as liabilities.
I am sure even Miss Gillard would be amazed at your acrobatic discursive dexterity.
“You acknowledge the money for the NBN is being borrowed. Yet in another sentence you point to urgent infrastructure, not realising that if you borrow money to build the NBN, then the money needed to build roads is still there in the form of ordinary tax revenue.”
Your statement is so Laborlike. Labor has wasted so much taxpayers money that there is no taxpayers money left and they are trying to increase their borrowing limit. So the Coalition will start in 2013 with no taxpayers funds and some $200bn borrowings to start to pay back. So to fund government asset projects the Coalition will either have to borrow more money or reallocate existing borrowed funds in a more responsible way – hence bye bye nBn.
“Then you suggest the Liberals should cancel the NBN, thus cancelling the revenue stream that the NBN will create. Now what you’re saying is they should scrap the NBN, use money that would have been used to pay for roads to pay back what was borrowed, and then let Telstra make the billions of dollars that would have been made by NBNco.”
You surely jest when you talk about the revenue from the NeverBuiltNetwork which has achieved nothing but to be a massive liability and will stay that way certainly until the election.
The Coalition will alter the NeverBuiltNetwork to their much cheaper and much quicker to achieve practical version. By building a much cheaper network the borrowed money saved can be diverted to much more urgent government asset projects.
Taxpayers money is the only way to pay back borrowed money+interest unless the borrowed money+interest is handed back. The other way is to devalue the currency like USA but this option is not all that suitable for Australia. Unfortunately the Coalition will start with no taxpayers funds courtesy of the profligate ALP.
The Coalition is substituting the much more experienced and efficient Telstra for the woefully incompetent NeverBuiltNetwork bloated bureaucracy and their multiplicity of rapacious consultants. The benefits to Telstra will be passed onto the Coalition as increased taxation revenue.
To restore taxation revenue the Coalition has to restore business confidence to get people off welfare and back to work. There will be a massive reduction in government waste such as the asylum problem and a return of the tax system to a sensible affordable arrangement.
So you are opposed to absolutely everything Labor does…
Which doesn’t make the NBN a bad thing, it’s just built by the wrong party, so….
Got it.
In accounting terms, an asset is an unexpired expense. It has nothing to do with how the expense is financed. As long as a “thing” has a function, it continues to be an asset. Its annual cost then becomes its annual depreciation. In this case the initial investment divided by say 50 years.
Can this futile part of the discussion now be put to bed?
Unlikely Richard… as it seems to be an ongoing FUD topic perpetrated by one person under dozens of different pen names.
Without wishing the wrath of you know who… I find it despeartely pathetic.
Alex, You mean the person who thinks “guvmint” is a clever word?
:-)
If government spending is so ipso facto “inefficient” or “bad”, let’s close the schools, hospitals, Medicare, retirement homes and wind up the defence forces.
Why do you bother? Why not post this somewhere you may have a chance of fooling someone?
It’s obvious this person with an agenda has no respect for the business case NBNco has laid out. I’m sure they think the proposed 7.1% ROI is a lie designed to fool and appease the public. Have they even looked at the corporate plan detailing all the aspects of the project?
Seriously the disrespect they show to the talented people running NBNco sets my blood boiling, especially when they bring up shysters like Telstra which have done all they can in the past 20 years to hold Australia to ransom and let us become a communications backwater, then propose that we send taxpayer money to them to develop an inferior network with no guarantee that we’ll be any better off than the direction we are heading in now?
It’s baffling, infuriating and downright sad that these people cannot see or show willingness to understand the positive impacts of the NBN just because it was devised by “the other party”. Sorry for the rant, I’m sure these things have been said a million times..
I agree the concept of a universal broadband network is nice and it would be great if it could be achieved particularly for those Australians who currently only have a poor quality internet service.
But reality may not be like this. Consider the questions:-
Is the nBn essentially an invention of the Labor Party ?
Is the Labor Party the only party that is actively supporting the nBn ?
Is the nBn being used as a political “football ie is the nBn very much dependent on the political fortunes of the Labor Party ?
Will the Labor Party win the lower house election in 2013 (or will it lose so badly it may even be replaced by the Greens as the 2nd party in Australia) ?
Is it realistic to say that if the ALP goes then so does the nBn ?
Is it advantageous or detrimental to the nBn that it totally ignores the major growth in communications – the mobile market ?
It is all very well to wax lyrical about the many imagined wonderful things that might be possible with an all powerful broadband system but if the political winds are not blowing in the right direction then it is all to no avail as favorable political intent is essential to get the necessary funds allocated.
At NeverBuilt
So wait. You’re saying the reason the NBN won’t succeed is politics, because if it was irrelevant as to whether Labor wins or not, it’d get built? And the Liberals will build it better by giving it to Telstra?
I enjoy your trolling. Please continue. It’s entertaining. Seriously, that’s brilliant.
Oh by the way, Labor aren’t building the NBN. NBNCo are. And their board isn’t at all politically motivated. Please, find my some evidence otherwise.
Meanwhile, I’m gonna go read the Telegraph. It’s slightly less biased than yourself. Cheers.
+1 seven_tech…. nearly spat my coffee over the monitor!!
+100 7T
Was going to complain about NeverBuiltNetwork, but realised he/she is just too much value to let it go to waste.
Comedy gold.
Not only gold, but while (s)he is spending time trolling to an informed audience, (s)he is not further misinforming an uniformed one.
But reality may not be like this. Consider the questions:-
Is the nBn essentially an invention of the Labor Party ? YES
Is the Labor Party the only party that is actively supporting the nBn ? YES
Is the nBn being used as a political “football ie is the nBn very much dependent on the political fortunes of the Labor Party ? UNLIKELY
Will the Labor Party win the lower house election in 2013 UNLIKELY
(or will it lose so badly it may even be replaced by the Greens as the 2nd party in Australia) ? NO
Is it realistic to say that if the ALP goes then so does the nBn ? NO
Is it advantageous or detrimental to the nBn that it totally ignores the major growth in communications – the mobile market ? ADVANTAGEOUS. FIXED BROADBAND IS GROWING FASTER.
It is all very well to wax lyrical about the many imagined wonderful things that might be possible with an all powerful broadband system but if the political winds are not blowing in the right direction then it is all to no avail as favorable political intent is essential to get the necessary funds allocated. YOUR POLITICAL WIND IS MORE OF A MILD BREEZE SINCE SINCE ONLY 6% OF ALL VOTERS STRONGLY OPPOSE IT AND NEARLY HALF OF ALL COALITION VOTERS SUPPORT IT EVEN WHEN IT’S BUILT UNDER LABOR. THAT MEANS YOU’RE IN THE CAMP OF RUSTED ON CRAZIES THAT EVEN THE COALITION DON’T CARE WHAT YOU THINK.
Come back in 2014 and tell us all about how it worked out exactly as you brilliantly forecast…
Comments are closed.