news Shadow Communications Minister Malcolm Turnbull has gone on the warpath regarding NBN Co’s performance in rolling out fibre to greenfields housing estates, touring a number of estates nationwide and damning what he said was NBN Co’s “extraordinary incompetence” in its greenfields rollout schedule.
In a press conference yesterday, Turnbull said that in January 2011 NBN Co had taken over responsibility for broadband rollouts in new housing estates — known as ‘greenfields’ areas as there was no existing telecommunications infrastructure in those areas.
“By June this year, they had connected less than 1000 houses. Now during that time they have received applications from developers for connections for 130,000 lots and according to the latest housing statistics available to us, there are about 74,000 homes in new estates in Australia without any fixed line communications at all.”
Turnbull said that several weeks ago he had visited a new housing estate in Petrie at Petrie, Mango Hill in Queensland where the pits and pipes had been installed eight months ago. “No sign of the NBN to put in any of the cables,” said Turnbull. “The residents have no fixed line telecommunications at all. They don’t know when the NBN Co will turn up. And one resident said that when she turned up and pleaded for a date to come, the NBN person said to here: ‘Madame, just assume that we’re not coming at all.'”
“Around Australia there are thousands of people in new housing estates who now have no telecommunications other than a mobile phone. And that is a consequence of the extraordinary incompetence of the NBN Co,” Turnbull added. “Now Senator Conroy has to take responsibility for this. The Acting Prime Minister, Mr Swan, obviously has no interest in the issue. He gave his usual non-answer to the question today and doesn’t seem to take much interest in the matter. But this is a real looming crisis for thousands of Australians who – it’s not just a matter of them not having access to optical fibre, they have no fixed line telecommunications whatsoever.”
According to the Liberal MP, the solution to the dilemma is to “not stamp out competition” from private sector suppliers of greenfields telecommunications networks.
“In fact OptiComm which is just one of the private sector private deployment companies has in fact connected thousands of residents — but of course it’s very hard for it to compete with the NBN Co. which is going out to developers and saying we’ll put the fibre in for you for nothing, for free. And of course a lot of developers sign up to that and then the NBN Co. simply doesn’t turn up,” said Turnbull.
“The better approach, which is what we proposed, is for developers to be encouraged to use the private sector suppliers and if they put in a network which fits the technical specifications of the NBN Co. the NBN Co. should acquire it. Unless the private sector deployment companies are allowed to get back into business and to compete on a level playing field, we’re going to be seeing a bigger and bigger telecommunications black-hole with no Wi-Line telecommunications in these greenfield housing estates.”
Turnbull said that over the past 18 months Telstra had connected over 35,000 homes with copper, with Opticomm and others had connected over 8,000 homes with fibre. “So the private sector is still delivering where it is permitted to operate,” he added. “Senator Conroy must explain how the $100 million contract awarded to Fujitsu in 2011 to roll out the NBN in new estates delivered value for money to taxpayers. And why the contract to Fujitsu was recently renewed.”
NBN Co did not immediately respond to a request for comment on the issue this morning, but the company told AAP that Turnbull had exaggerated the backlog situation, and that greenfields housing developers could still choose to contract private sector companies for broadband rollouts — with NBN Co being the provider of last resort.
Communications Minister Stephen Conroy strongly defended NBN Co’s performance in deploying infrastructure to greenfields estates, in a press conference in early August.
He pointed out that NBN Co had drastically changed its approach to greenfields environments over the past several years. 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.
opinion/analysis
The greenfields issue has been bumping along under the radar for several years now with respect to the National Broadband Network rollout. It’s a heated issue, because, as Turnbull has highlighted, new home buyers in these areas often have little to no visibility on when their premise is actually going to get broadband, and the creation of NBN Co has had a somewhat detrimental effect upon regulatory certainty for existing companies operating in this area.
However, the fact also remains that greenfields estates represent a tiny (and I do mean tiny) proportion of the NBN rollout as a whole, and this kind of uncertainty is nothing new for these kinds of regions, which are also often struggling to get authorities to deploy public transportion and other utilities to their areas. These are not established residential zones but completely new zones — and infrastructure is extremely slow to roll out in general.
I feel that Turnbull is perhaps exaggerating the situation with respect to greenfields estates and the NBN. It’s easy to head out there and find estates with no connections that have been waiting for a while for them. But is it the case that all greenfields estates rollouts are substantially delayed, or that there is an endemic problem in this area? I don’t quite think so — or if that is the case, then Turnbull has not met the burden of evidence yet to prove his case.
Image credit: Office of Malcolm Turnbull
The problem with greenfields is two-pronged:
(1) The developer wants to put fibre in to market their estate as “NBN ready”, even if NBN Co isn’t ready to connect the estate.
(2) Telstra see the fibre going in, so refuse (rightly) to put copper in, given it would be wasted effort and investment.
Rock and a hard place.
NBNco should be coming up with a system for installing fibre to houses that are built and providing connections for houses that aren’t built as they roll through an area. Obviously you can’t provibe fibre to a house that isn’t built, but they should be leaving a connection at the curb so that when the house is built it will just need a short connection to the house. Copper shouldn’t even be an option anymore.
It’s all about cost.
The developer builds the estate. He/she doesn’t want to do the job twice, and Telstra aren’t going to put copper in that might only be useful for a few weeks.
If the developer runs the fibre before NBN Co are ready – (and the developer WILL do it when they are ready) – then that’s hardly NBN Co’s fault. It’s just ‘circumstance’.
There is a system. If there’s a house there, the build drop is made. If there’s no house, they can’t do anything, because they can’t necessarily predict where on the block of land a house might be exactly located in the future. So they stop at the pit for those blocks.
There’s nothing wrong here.
So it’s pretty much what I thought then, they have a system in place.
Yup.
The key thing to remember is that the estate developer is pretty limited to exactly when he/she can put the infrastructure in the ground on the timeline of their project.
If NBN Co aren’t ready to connect the area, they can’t connect the estate. When they are ready would be roughly analogous with the POI build schedule.
http://www.nbnco.com.au/assets/documents/q-s/rollout-info-pois-july-2012.pdf
Having worked for a developer, the only thing that counts is cost. The cheapest solution wins. They dont care (in my experience) about “broadband enabling” they just care about how much profit they will make selling the land. A few years ago I was told that people buy land for a lot of reasons, but internet access inst a significant one. Your pillage may vary.
A few years ago I think that would have been completely true.
Personally, internet access is one of the main things I would look into for a new home (to rent or to buy). I definitely would not move to a DSL black spot, I would likely move to an NBN-ready location price-permitting, and I would consider distance from the exchange if I decided to just go with ADSL2 until the NBN comes around.
I think a lot of people are beginning to think along the same lines. Or maybe just in my circle of friends and associates.
Still, for me, getting my own home (to buy) is at least 5 years away, so by that time (election-permitting), the NBN option will likely be standard. For rent options before then, it’s as I’ve said before.
LOL, “your pillage may vary” — either that is very witty or a very funny autocorrect error! :-)
Turnbull 23/02/2011: “Well, it’s a reason, but it seems to be lost on the global population. The internet is becoming a wireless internet.”
Turnbull 13/09/2012: “there are about 74,000 homes in new estates in Australia without any fixed line communications at all.”
Nice contradiction. Well picked up. The man is a lying hypocrite. I’ve come to seriously dislike him, solely based on his lies and misrepresentation of the NBN. Which is a shame, because I believe he is one of the few LNP members with an IQ capable of actually grasping the necessity of the NBN.
We’ve also seen Turnbull take many progressive positions in the past with the ETS, Republicanism and gay marriage. Its a shame to see him playing hard-right gutter politics, wasting his intellect and time destroying something he would have to know we need, deep down.
Turnbull understand the free market better than anyone, and to think that he’s incapable of looking 15 years ahead and envisioning a strong flourishing economy, and a world of new business opportunities only possible because of FTTH, is ridiculous. Of course he knows its the best way forward. Its just that all he cares about, like his pal Abbott, is getting into power. And like Abbott he’s proven he’ll now do or say anything, no matter how misleading, to get there.
I have a respect for Malcolm which obviously you don’t share Simon. He has been handed the poisoned chalice by the mad Abbot as punishment for defying him. After years of watching him in politics I know when his heart isn’t in something, but you have to hand it to him that he is willing to do the hard yards many refuse to do. Malcolm is now just doing his job and if the Boss says you will sell this and do it this way, if you wish to keep your job and hopefully one day through promotion outrank the fool and give him the toss, well then it’s suffer and bear it. We’ve all been there.
Malcolm does have a point about the NBN failing to keep up with Greenfield places. But till it is up and rolling correctly, it should be contracting the work out to Companies with this experience. A tender process with the Vendor with the best NBN acceptable install for the price along with backhaul rental to the company who installs till the NBN arrives. If the NBN is going to be years coming, then they at least have a chance to spin a profit whilst the back-haul is theirs. Basic they build it, NBN pays for it, installing company run it till NBN rolls around. Actually they could actually do a deal for 2 or 5 years or longer.
Win/win I recon.
“I have a respect for Malcolm which obviously you don’t share Simon”
I genuinely used to respect him, for the reasons I listed. He was a far more moderate, progressive, centre-right leader than Abbott, and it sickened me when he was overthrown by that clown. I think if he were still leading the party they’d be a good chance he would have offered some sort of bipartisan support for the NBN.
“Malcolm is now just doing his job and if the Boss says you will sell this and do it this way, if you wish to keep your job and hopefully one day through promotion outrank the fool and give him the toss, well then it’s suffer and bear it. We’ve all been there.”
Sounds about right. Hence my statement about how sad it is to see him wasting his intellect on destroying something he most likely secretly supports (just look at his investments) to get the LNP back into government. However he’s also showing a distinct lack of respect for NBN supporters, by labelling fair NBN reporting journalists as zealots and refusing to answer reasonable questions put to him by Delimiter about the Coalition’s so called alternative broadband policy.
There’s only so much respect you can show for someone when they are behaving this way, and mine is currently lost for Malcolm.
The choice of words he chooses………………interesting.
I stand in respect of your decisions and reasons. Malcolm isn’t perfect. None of us is. We all keep forgetting that uncomfortable truth of ourselves. Just keep your mind clear of a deadening drone in some of the media and let yourself affirm your choices instead of someone else telling you.
I just suggest watching MT work and do your vote strategically, at the right time, whenever that may be. When that does not work for us Australians anymore, then we really have an issue of monumental proportions in comparisons to this.
There is the practical Malcom who is a logical thinker and then there is the political Malcom who is beholden to his political party and the idiot Abbott. Don’t make the mistake of confusing the two. If he was leading his party things would be a lot different.
The “just following orders” defence didn’t work in Nuremberg. Does Malcolm aspire to lead or to follow?
There is a difference between murder and exploitation. Murder is never humane.
Would you throw away your life quickly, or play your best in the game of life, when you can win? I think that answers the question definitively with respecting it is correct to ask questions of how people play public politics. :{D
You have to make room for the possibility that he truly believes (in the literal sense) that the free market type of approach he espouses is the best way to do things.
… Just like a madman who truly believes his skin is talking to him and that his toes are plotting to strangle him in his sleep which is why they must be cut off.
This comment is not about religion… merely blind belief in general and the nature of how regardless of how smart someone is, they can be blind to things due to conviction and belief.
I think, but that is my own view, that MT is a small “l” Liberal. Menzie’s founded the principle party creed was small Government with liberal market and justice. UAP died in the ass in comparison to that. The Conservatives had made an uneasy bed with Liberals to survive becoming the big “L” of the party. They corrected that as soon as he retired out. But Menzie’s hope, was the small “l”
Blind to conviction and belief. It is hard to lie to One ’s self. Not impossible, if you’re delusional enough. But we see that enough in our Parliament without having to suffer the indignity to observe more it. It is very demeaning for us. We put them there. *very cringeworthy*
It is in fact very easy to lie to yourself when others tell others the same lies. It’s a type of confirmation bias.
The mind tricks of the Dark Side, they are!
What the Earl also fails to mention is that half of the greenfield estates from before NBNCo was created also can’t get wired broadband thanks to Telstra delivering either nothing or RIMs. Where were the complaints about Telstras incompetence?
The problem here isn’t the lack of wired broadband – it’s the lack of any wired telecommunications at all.
We still have Universal Service Obligations enshrined in our telecommuncations regulations. How is the obligation to provide equitable access to a standard voice telephony solution being met?
The obligation rests with Telstra – but they are obliged to use the NBN owned infratsucture to deliver the service within the NBNs footprint.
Telstra are providing a ‘fixed’ interim service either via Next G or Satellite, so they are abiding by their service level agreements.
“In fact OptiComm which is just one of the private sector private deployment companies has in fact connected thousands of residents — but of course it’s very hard for it to compete with the NBN Co. which is going out to developers and saying we’ll put the fibre in for you for nothing, for free.”
btw this is an interesting statement. On the one hand Turnbull says infrastructure competition is important and the next he’s whinging when it’s put into practice and developers are lining up for NBNco fibre rather than OptiComm because they have a better price… also there seems to be much demand for fibre, perhaps OptiComm and NBNco can branch out and do brownfields, I imagine they’ll be very successful given this demand… I wonder just who will be daring enough to do such a thing…
Opticomm should stop bitching and bid for NBN construction work.
Check out Malcolm’s blog’s comment section, where I’ve been… conversing… with Stephen Davies. No disclaimer by him in the comments regarding who he is of course.
Between these statements: “NBNco is currently not making money, it LOST $323M – yes look at last years published results.”, “The belief it will eventually make money – but not until 2020 according to the corporate plan”, “If you are going to make comment at least make it based on informed facts rather than labor party and NBNco spin.”, “Excuse me! Are you just blind or what? The first three sites in Tasmania – all very marginal Labor seats.”
And the strong Malcolm Turnbull to Opticomm connection, I don’t think that that will be happening any time soon.
I didn’t say “would”, just “should”… :o)
“Opticomm should stop bitching and bid for NBN construction work.”
I thought they won the bid for the Tasmanian trial sites a couple of years ago.
Opticomm is not bitching it getting on and doing it own work and competing very sucessfully against nbnco.
It doesn’t need their business.
For a company that isn’t bitching they seem to do a lot of it on forums and in interviews.
Hubert,
If you can find a company that will install infrastructure without charging consumers please inform me. The government charges society as a while through taxation. The NBN will install the infrastructure in anticipation of making a profit in the future by charging RSP’s to sell broadband to consumers while currently it is borrowing funds from the government to get started.
A free market approach would be to have all suppliers charge the developer its true cost or charge NBN. Not have hidden implicit subsidies and companies competing with a “free” product.
“Not have hidden implicit subsidies and companies competing with a “free” product.”
Your point is ridiculous and invalid. Fact remains that developers are choosing NBNco and for what ever reason that is it makes absolutely no difference. We’ve been told constantly by the coalition that the private sector can handle this, the private sector can handle that etc, Turnbull was even gloating about an OptiComm installation in Drouin just a few weeks ago, so yes, it’s all good to espouse the benefits of the private sector when it suits these clowns and then cry foul when everyone wants NBNco to install instead… If I was a developer I’d know which one I’d prefer too and the price has little to do with it. Think about it, NBNco can guarantee that new home owners will have a wide range of ISPs to choose from, OptiComm (and others) have no such thing and if I was an ISP I’d know who I’d prefer to deal with too.
Humbert again you show ignorance of the issue. It is not whether they connect to a different fibre optic network but who connects them to THE network.
To elaborate on your point would you care who built your roads into the greenfields estate? They all have to be build to specification and connect to the main network.
The issue is allowing other companies to tendor for the construction work. If the numbers are correct there are 160 000 premises who would desire NBN connections and could be signed up to a contract immediately. However, as the NBN has not constructed the infrastructure yet, this is not possible. Why not contract it out to private companies? The NBN can continue its work elsewhere and these people can also get connected to the NBN faster.
– As an aside people seem to be unable to differentiate criticism of the NBN as an idea from criticism of how it structured from how it is being delivered. It is possible to agree with it as a whole but believe the government should change some aspects of it so people get their faster internet earlier (isnt that the whole point of it?) or believe that there are many aspects where there is room for improvement (ask anyone in the private sector; you will never have the best business model you can always do something better.)
“To elaborate on your point would you care who built your roads into the greenfields estate?”
yeah, I agree it’s stupid, no point having many different companies building roads competing with each other. Best one handle it and contract the work out, makes you wonder why opticomm insist on making life harder for themselves and everyone else. Leave it to NBNco. Glad we got that sorted. Wow, that was easy.
“As an aside people seem to be unable to differentiate criticism of the NBN as an idea from criticism of how it structured from how it is being delivered. ”
Except we already know what Turnbulls agenda on this issue is and now we know what yours is too. Thanks for stopping by.
This is becoming more characteristic of certain groups. Instead of engaging in rational debate there is a push to silence dissent. Climate change “deniers” has very ominous overtones. The morality push by refugee advocates who desire a “humane” approach and by implication all other approaches are inhumane. The push to censor what is seen and heard as it may be offensive or lead to erroneous conclusions.
Why is it that people are scared of debate? Why do people so strongly denigrate their opponents?
As far as my position on the NBN i am just assuming although your comments make yours clear. You are a die hard supporter who cannot stomach any criticism of the NBN and most likely Conroy.
Here are a few questions –
Where would a start-up company gain experience in construction work to lead a nationwide rollout?
How would a start-up company gain experience in organizing operations to move from test sites to a full operations in an environment that competes fiercely with mining for resources (skilled labour)?
Why should the company gain in depth experience in laying infrastructure in both green and brownfields sites?
Why not utilise existing providers to do it for you? If as you claim there are alternatives then why not employ them to contract for NBN Co?
To you personally,
Why do you personally think that anyone except the NBN Co who constructs fibre will not have that fibre connected to the NBN and is therefore wasting their time? (I suppose universities and institutions like the CSIRO have wasted their time installing FTTP already)
Why do you assume the criticism of the NBN Co business activities is the same as criticism the NBN as an idea?
Michael, you are correct that certain characteristics are being displayed. But generally it is being driven from one party of Interests. The other is being purely reactive to their FUD. Insulted even.
No one is afraid of debate, but when the debate becomes stupid and you add a heap big gollup of nastiness, people stand back and look on in horror that some of our species are intolerably inhumane. It is a wakeup call that we should always be mindful to keep watch against the rise of Fascism and the horrors that always follow it. I think your starting to notice why the debate is now so polarised. Think now, but do realise you will have to live with the choices of your decisions. But please don’t forget all the others that may be better off, or worse off than you. This is called egalitarianism. Something we seem to have suddenly lost in our current Society which once had abundance of it. The wonderful thing about egalitarianism is it is a renewable resource. We people are its source and the amount is only limited by us.
Think you misunderstand the people who have finally dug their trench of support in the front line of this particular battle. They’ve gone through already, what you are questioning and in that journey they have been ridiculed, denigrated and had to suffer the frustration of being told, well actually almost ordered, to accept what you are told. Can you accept that 2+2=8? After all the figures are crunched through the Economist and Banks heads in optimism of a never ending happy days of growth and profit in the Market, that is what we are told to accept because they know better. Intelligent people know better, because they refuse to just accept what they are told and do question. So if they get short, remind them you too are questioning this and you will find a font of knowledge that has been shoved and prodded and peer reviewed by others who actually do work in the technology discussed and know how it works. Even then, question everything. You will find that it actually can be fun if you detach the emotion.
You list some excellent questions. But you’re failing to stand back and look and understand a bigger picture of how the forces that are polarising our Nation currently are aligned and why. This is something we all have to discover ourselves, otherwise we will not believe the breadth and the scope of it. Prepare your mind. It’s almost unbelievable. Eyes wide shut.
Your final questions show you may be close to the point of, please excuse this metaphor, choosing either the red pill or the blue pill. Do you want to wake up in the real world, or continue the blithe fantasy that has lulled so much of our Nation’s people into compliance and obedience. I derogatively call them Sheeple. I really shouldn’t. But how can one respect people who are easily herded along by promises that they will never realise and are blind to it.
Enjoy your journey and please, make sure your decisions are actually yours. You will have to live with them.
Oh, by the way, there are no easy answers. :{D
Cheers.
“Instead of engaging in rational debate there is a push to silence dissent.”
There is nothing rational about your debate. The rest of your comment confirms this. I have no interesting in debating with people like you. Find another sucker.
Sadly Michael, what the problem is, is the incessant bullshit coming from the opposition, their media mates and their mindless supporters, who repeat ad nauseum, the same contradictory lies.
When people come to forums like this with little or no idea, simply to repeat their political master’s baseless negativity, lies and rhetoric in relation to the NBN, they are treated accordingly. Of course once they receive the deserved replies, they then scream personal attack/ad hominem, also claim that NBN criticims aren’t welcome and that NBN critics are being silenced.
Criticism is welcomed Michael and this comment wasn’t aimed at you per se`, but legitimate criticism not FUD. Think CVC, where the pro-NBN input helped change the NBN for the better.
Opticomm offer a range of RSPs just like Nbnco and have been well before nbnco came along
Hi Michael,
A couple things about what you said.
“If you can find a company that will install infrastructure without charging consumers please inform me.”
Nice strawman.
I haven’t seen any of the agreements between developers and opticomm, but honestly, if the plan isn’t: Charge developer nothing, and charge consumers like a wounded bull, then they are doing it wrong, and they don’t deserve to be building fibre networks for locked-in customers.
“The government charges society as a while through taxation.”
This has nothing to do with the NBN, because the government isn’t spending tax money on the NBN
“A free market approach would be to have all suppliers charge the developer its true cost or charge NBN. Not have hidden implicit subsidies and companies competing with a “free” product.”
You’ve got it completely wrong, the product is not free. The product is paid for by the end user. If I was going to try to make money building infrastructure, I would be charging the gatekeeper (developer) as little money as possible to sign the deal.
But hey, we can just ignore reality and misrepresent the whole situation. Sounds better saying “compete with free” right? Because the NBN couldn’t possibly be offering a better product – that’s unheard of.
Back on topic;
It’d be great to know why NBNCo are (apparently) dragging their feet, and MT raises a good question here, I can’t wait for the reply.
That was probably poorly worded on my part. I agree the idea is to recover the construction costs through end users.
Construction charges wholesaler charges RSP charges household.
However companies that specialise in constructing the infrastructure (not wholesale) are unable to do this. In addition there is no incentive for developers to find the best deal when the NBN Co promises to install the cable for free. Either have the NBN tender our construction costs or allow the NBN to offer a fixed rebate for example (i.e once cabling is inspected and upto standard) but allow anyone to install it. There are multiple options and they would all allow for a faster rollout as well.
However as MT raised there are a plethora of companies with experience in laying fibre optic cable (i.e universities and other institutions which already have it) but are not able to take part in the rollout of the NBN. If it is as MT argues and the NBN is behind target then why not use these companies to speed up the rollout in greenfields estates. There is no existing infrastructure so there is no need for the telstra deal to be an issue either.
Lol. A far as I understand it, the developed pays a fair proportion, and when a customer eventually signs up, they are indeed locked in and pay off the reminder. This isn’t nice for end users. Not, at, all… Developers cosying up with fibre companies is a business agreement thst harms customers. Again, in my experience.
Except that I have a feeling that would increase the cost. The cost of the tendering process, and the cost of hiring contracted installers instead of using engineers and labourers you’ve already got on staff.
I mean, I definitely think it’s a good idea, and if there are enough fibre installers, then the free market will drive those costs down through the tendering process, minimising the impact. But there’s still going to be an associated cost.
So it comes down to: Do we meet our target faster at a higher cost and therefore reduced return on investment? Or do we sacrifice the speed of the roll-out to maintain a lower cost?
“However as MT raised there are a plethora of companies with experience in laying fibre optic cable (i.e universities and other institutions which already have it) but are not able to take part in the rollout of the NBN. If it is as MT argues and the NBN is behind target then why not use these companies to speed up the rollout in greenfields estates. There is no existing infrastructure so there is no need for the telstra deal to be an issue either.”
Probably because NBNCo has already awarded a plethora of contracts with companies that won by tender (http://delimiter.com.au/2012/06/27/youre-flat-out-wrong-nbn-co-tells-afr/). If a company didn’t win the contract, I guess they didn’t fit the bill for some reason, but I believe they were all open to any company that wanted to compete.
“The government is not spending taxpayer money on the NBN”
While that may be true in the pure sense if you accept that the NBN is off budget and that it will achieve a “commercial” RoI. This is only achieved by utilising the borrowing power of Australia as a whole (i.e the taxpayer) so that both borrowing costs are lowered to the bond rate and therefore the benchmark for a commercial return.
I know it is a small point but I personally believe that the emphasis on making the NBN commercially viable will hurt us in the long run through higher prices. If as many people have argued there are so many benefits from FTTP to residential premises, then put the NBN back on budget and concentrate on delivering the project so it benefits that nation fully (i.e construct early in deadzones not for maximum profit). However I digress, but either way it is still taxpayer funds that make this possible and it is disingenuous to overlook or deny that fact just because it may earn 7.2% RoI.
I hate to tell you this but it is very hard to follow your logic (if any). Are you suggesting that NBN should not make a return and be a cost to taxpayers?
I suppose this way, it would help the coalition argument that the money would be better spent elsewhere.
Observer –
Just commenting on two competing objectives which are being pushed for the NBN.
1. Delivering a commercial RoI to the government.
2. Delivering benefits to the community by making FTTP more widely available at a uniform price.
My point was that since taxpayers are all quasi shareholders (i.e. using taxpayer funds / borrowing power) would it not be possible to drop the price of services and have a public subsidy to make up the shortfall. This would ensure greater public scrutiny on the the funding and deliver broadband at a lower price to everyone. This could be targeted specifically at the rural cross subsidy which implicitly raises prices for everyone.
But your argument can be just as easily applied to electricity and water companies around Aus. Should they not be entitled to make a return on their cash? Why do people complain about price rises from them so much when the funds go back to the govt?
There is no real issue with NBNco making a return as as long as it is not unreasonable. The point you seem to be missing is that ultimately the cost to the taxpayer is minimal and is mostly covered by users.
In the end, someone has to pay. So what is better, for every taxpayer (whether they use broadband or not) to contribute more or for users to pay a little more?
As for other utilities not making a return, the electricity providers already do where I live in South Australia.
They are not competing objectives though. 2 is the (long-term) objective, and 1 is the best means by which you get there.
If we don’t go with 1, and we go with a purely taxpayer-funded endeavour, then you get a situation like Observer describes:
You have a network that is potentially free (for argument’s sake) to the RSP.
The RSP is able to (though not obliged to, except through competition) charge a very low price that is paid by the end-user.
The end-user benefits from better internet access, and at a very low price.
The end-user didn’t pay for the network.
The RSPs didn’t pay for the network.
So who paid for the network? The tax-payer pays for the network, whether or not they are gaining any direct benefit.
So, in summary:
The current approach:
+The cost of the network is repaid by its users.
+The price of access is uniform, thanks to cross-subsidy.
-Rollouts to dead zones are slower.
The approach you propose:
+Rollouts to dead zones are faster.
+The price of access is essentially free (therefore uniform).
+End-users get cheaper prices.
-Taxpayers are directly burdened with the cost of the network which they may or may not benefit from.
Also, the thing is, in either approach, they are both limited by the best, or optimum (from both a cost and technological perspective) roll-out. I honestly don’t think the actual roll-out would change very much when you consider it that way, unless we drive the cost even higher, or extend the time-frame of completion, to use an inefficient roll-out just to satisfy those dead zones.
In the end, what matters more? The short-term satisfaction of those in dead zones, or the long-term completion of a national objective at the lowest possible cost and shortest total time-frame?
Really, the ONLY problem with NBNCo’s (or Labor’s) practices are its marketing. The NBN is selling on a big promise. The reason that people are complaining about the speed it’s taking to roll out to their area proves that the NBN is something that people want, because they want it now. Of course, it hadn’t promised something big, then this project would never have gotten off the ground in the first place.
Look back over the years long since gone and you will find the Market still is really yet to deliver on its promises. Lots of glossy FUD and rich Public Relations Specialists, but cheaper, that’s funny!
Keep asking. Keep questioning. Yes!
I love the way the nay-sayers have morphed from ‘my taxes’ (income/general taxation) to the borrowing power of Australia (the taxpayer) – gold.
So yes it is debt and no, the NBN is NOT taxpayer funded, as we have been saying all along.
They don’t have to go with NBN if they don’t want to they can go with someone else
the only issue is that the other company can say no, if they can’t make any money from the estate then can turn them down
NBN Co can’t do that, they have to say yes.
Turnbull can’t solve this issue.
Simon Says…. “They don’t have to go with NBN if they don’t want to they can go with someone else
the only issue is that the other company can say no, if they can’t make any money from the estate then can turn them down ”
Actually it has so far been the other way around. NBNco have been “cherry picking” estates they want to do. I know of Opticomm having picked up an number of small estates and several regional estates because NBNco knocked them back.
Correct me if I’m wrong here, but don’t the estates choose who they give the comms contract to? So if they ask NBNco to do it and NBNco say “Sure, 18 month lead time” who’s fault is it when it takes 20 months to do it? They could have got Telstra or Opticomm to fibre it up if they wanted to.
Yes!
Exactly. Blame the developer for keeping direct monetary costs down. Or blame the (potential) home-buyer for accepting the cheaper prices that come with that.
thats the way i see it. The overall cost of the new home for the want-to-be NBN user was lower because the developer took a shortcut by selecting the installer of last resort… the NBN. They could have paid for the roll out in the green field estate and passed the costs on to the buyers as part of the lan/property prices.
Question: Does anything stop the owners in the greenfield estates from sharing the cost of the installation by collectively engaging a contractor to complete the works and to “split the bill” amongst themselves(admittedly a nice idea in theory but not a solution likely to work in the real world)?
Also, once they have their fiber to the home, how does this help them in areas where the NBN are not already established? Is this the real issue here, that there is no long term incentive (revenue) for Telstra to provide the copper line and no NBN established in these areas to connect the green fields estates to? Will these greenfields need to wait until the roll out reaches their area before they have any access?
Why does every Australian politician who leaves the capital cities have to don an Akubra? Is the only reason the company is still in business because it gets sales to political tourists?
I have to say that is quite like the fluro vest and hard hat market…
Do MP’s from the outback don sailor hats if they happen to visit places like Vaulcuse?
Turnbull constantly bangs on about the private sector not being “permitted” to roll out fibre in new estates, but this is just a straight-out lie. Any developer is free to get any private company to install fibre in their estate. NBN Co is, in fact, only the “provider of last resort”.
The uncomfortable thing that isn’t politically convenient for Turnbull to talk about is that private companies can’t do it as cheaply as a government-owned natural monopoly that’s not out to make big profits. It doesn’t support his argument that the private sector is always the most cost efficient way to do anything.
What you are talking about is Market Distortion. We painfully hear, ad-nauseam, from Market Activists like the IPA about poor private companies operating in the Market can’t compete because they have to create huge sums of profit in order to create any interest to Investors in luring them into parting with their money. Basically they are screaming for us to sympathise for the poor rich kid. BAH! That’s what you get for forgetting the Market demands exponential growth, or your Investors will dump you and you take the fall for the failure. I call it legalised extortion. Banks love it and have orgasm over it.
The Market could operate in all of this if it wasn’t such a greedy machine. Telstra is a classic example of why the Market dug its own grave. So spare yourself the cost of the pity on the Market. It would slide a knife in between your ribs if there was money in it.
That is why the NBN was created in the first place. To halt the extortion happening to the Australian people created by incompetent telecommunications policy handling and a blind trust in the Market to do the right thing. For decencies sake, someone had to do it. Liberals foisted it on us and Labor delivered us from it. That is the fact and don’t take it that anyone can stereotype me by calling me a Commie for saying it. Water off a ducks back and I can call people Capitalists with as much distain as I would a Communist. Both systems are inhumane.
But if the Market is willing to play a fairer game, then actually a mutually profitable alliance could be created which shares the risk and profit. There would be then less Market distortion.
Won’t happen though. Why? The Market wants it all!
Communism: This is the only life we can afford to give you, and we’ll expect you to give back.
Capitalism: You only deserve to live if you can afford it, and whether you can afford it depends on how much you have to give.
Clearly, there’s something wrong with both of these ideologies. Instead, we need to pick and choose, as appropriate. “Everything in moderation”, as the saying goes.
Isn’t it amazing how clear the view of reality becomes, when one uses your own mind instead of just following other people’s “truths” (or lack of them).
Nice one Harimau.
Gee, what was Malcolm doing two weeks ago? Thats right, launching a greenfield estate with private sector FTTH!
http://www.malcolmturnbull.com.au/media/transcripts/transcript-doorstop-interview-launch-of-opticomm-network/
The NBNco is the provider of last resort, should the developer no be able provide their own.. The developer in this case chose Opticom.. This is precisely how the Greenfields rollout is supposed to work..
(see NBNco Website)
Nothing to see here but Fud.. Moving along now..
Good to see that some of the private sector are doing their job. It’s a shame Turnbull hasn’t read the read the NBN documents properly and acknowledged NBNCo is the provider of last resort and that short fall in green fields is a massive failing of developers and his much vaunted private enterprise.
NBNaccuracy writes “NBNCo is the provider of last resort and that short fall in green fields is a massive failing of developers and his much vaunted private enterprise.”
Its a pitty you dont live up to your name, because this statement is grousely inaccurate! Malcolm Turnbull is talking about the homes which NBNco were CONTRACTED to deliver services and have failed to deliver services.
This is not a failing of developers. Across the country developers have signed agreements with NBNco and nbnco have simply not delivered on those contracts. There may be cable in the ground but is not connected to anything and residents cannot get services. I know of one estate in NSW where people have been moving in for 8 months. They wanted to be released from their NBNco contract to go with an alternative provider who could offer services, but NBNco has refused to do so – Why?
So get your FACTS right before espousing Labor doctrine and NBNco spin!
You don’t seem to have understood anything that has been written. They are provider of last resort, yet the developers are contracting them anyway. How is that not the developers’ failure? NBN Co are obliged to take any contract, they don’t have a choice in the matter, so they take all these contracts and fulfil them when they can.
“Across the country developers have signed agreements with NBNco and nbnco have simply not delivered on those contracts.” Yet.
“They wanted to be released from their NBNco contract to go with an alternative provider who could offer services, but NBNco has refused to do so – Why?” Because it’s in NBN Co’s best interests to hold them to the contract? NBN Co is a government owned company, not a charity. The developer signed a contract and NBN Co made plans and/or started building based on that contract, to let the developer out of the contract because they changed their minds would be pure suicide, both financially and politically.
“Its a pitty you dont live up to your name, because this statement is grousely inaccurate! Malcolm Turnbull is talking about the homes which NBNco were CONTRACTED to deliver services and have failed to deliver services.”
And you ignored what I said.
“NBNCo is the provider of last resort and that short fall in green fields”
They are contracted because they didn’t or couldn’t get private enterprise to do the work. They have to now line up with everyone else.
“I know of one estate in NSW where people have been moving in for 8 months. They wanted to be released from their NBNco contract to go with an alternative provider who could offer services, but NBNco has refused to do so – Why?”
How the hell would I know? You provide not links, no information about who your talking about. You may as well say I know people who think the earth is flat.
“So get your FACTS right before espousing Labor doctrine and NBNco spin!”
I don’t even vote Labor. I can however read and make up my own mind. Not put the Coalition twisting of facts. How about you try the same?
As an aside, you just have to love the powerful combination of hand on the hips (commonly known as the washing machine pose) and the Akubra. A mincing version of Brokeback Mountain.
If you are a top gear viewer you will know that pose. Jeremy Clarkson said that Audi A4 was using it to look bigger just like George W Bush does. I don’t know how tall Turnbull is but apparently it’s a small man trying to look big pose.
Gotta love YouTube. See this video at about the 1 minute mark.
http://www.youtube.com/watch?v=BjaTCMJ8YKg
Senator Conroy has answered Mr Turnbull this afternoon:
http://www.minister.dbcde.gov.au/media/media_releases/2012/145
And show me what positives the Libs did for Australia’s Internet access in all those years?
A friend of mine has just built a new house in a new estate.
They ONLY allowed “e-Wire” HFC to be allowed to be use in the estate, no copper nothing. The price, quota and bandwidth/reliability of e-wire is well documented to be utter shite.
It also happens that he’s not in range of Vivid 4G (WA _very_ northern suburb).
Personally I think this is fraudulent and a shining example of why the NBN is totally necessary.
Marcus,
But that is the Wonderful example of private sector competition in essential infrastructure. The current and future residents can sleep soundly with that woderfull warm fuzzy knowledge they weren’t forced to use that nasty NBN fibre, they have chosen an alternative infrastructure. Malcolm and the anti NBN will be pleased.
Being HFC I am sure Pay TV will be offered , I wonder what the choices there will be ?
Why haven’t NBN Co released the figures for what their greenfields back log is? It would either confirm or completely scuttle the claims by Mr Turnbull. They must know what the figures are and I can think of no reason for them to be considered commercial in confidence. The only way the NBN Co could be hurt by releasing this information is if Turnbull is right.
You might like to ask them what the actual figure are Renai.
Very good point Bob. The whole arguement could be debunked by nbnco and Conjob by stating the backlog numbers.
The fact they are not wanting to state numbers goes a long way to say something.
Not really, NBN co are too busy taking names for people they are going to sue once they become profitable. (Just kidding)
That simplistic result would suit your prejudices, wouldnt it. If NBNCo is the provider of last resort, then its pretty obvious to those with a brain that given the huge build process there will be some estates built sooner than others. Had a developer chosen the last resort option before, they would have gotten Telstra. I know a few developers who elected to save $1500 per block on $100,000 blocks to install fibre. Instead, that estate has rimmed copper, as that was the required minimum. This problem is not new under the sun, its just different, due to the fact that NBNCo are unlikely to be able to deploy to all estates under construction at the same time. The only reason this would be necessary is because the developer will not reduce profits. MT is right to say these people could have no wireline communications for an indeterminate time. The problem is real, but i think solved by maKing it a requirement that the developer cable the estate ready for purchase or blocks cant be sold until done. Then the estate can plan ahead and give NbnCo more time to plan and engage, or if they are ramping fast, they can pay a commercial mob and lose a bit of cash off the sale price. Require an approval to be able to skip wireline install, and mandate blocks sold be advertised as to their connectivity options, so then its buyer beware, if the developed has obtained approval to skip cable deployment
I believe the numbers your after are here: http://www.minister.dbcde.gov.au/media/media_releases/2012/145
This whole debate has become a debacle from all sides! It’s a debate being run by idiots with no real outcomes!
There is little point discussing something that we have little control over unless someone on these fourums has the power to effect change!
Every time I here the words ‘put the NBN back on budget’ it makes my blood boil! That argument was put to bed after the first corporate plan was released!
Renai, how about deleteing comments that are factully incorrect?,or emailing people who post deliberatly missleading comments?, this is your baby isn’t it?
I read these articles to improve my knowledge of the IT sector. I stopped reading news papers because of the endless drivlley bullshit they keep sprouting! It just seems to flow on to the internet as well.
Renai, how about deleteing comments that are factully incorrect?,or emailing people who post deliberatly missleading comments?
+1
And what then, would we have to laugh at?
Honestly Tech, I don’t find it funny. When the Liberal party wins the next election Billions of dollars will be wasted and the efforts of decent hard working people will be for nought! Not to mention the mass layoffs in the fibre manufacture sector. The result will be that the Australians screaming for a reliable fixed line internet connection will have to wait at least another 4 years while the rest of the country enjoys what you and I take for granted.
And if Australian’s do vote in the Coalition who support this anti-progressive FUD machine propaganda, then don’t we deserve the punishment we will get. There is a beautiful irony in all of it in a horrible way. I am in Brisbane in Queensland where people of this State are reaping what they have sown. See what happens if you let someone do your thinking for you.
PS: Don’t believe everything the media tells you. But understand you are actually hearing their hearts desires for the world as they wish it. Knowing that, you see “news” in a whole new light.
I’m not sure I undersand the context of the comments, “See what happens if you let someone do your thinking for you” and “But understand you are actually hearing their hearts desires for the world as they wish it. Knowing that, you see “news” in a whole new light”
Many people in Australia consider people from Queensland ” a little backward” not me, but many people I speak to. I consider what has happend in Queensland to be a major step forward for the state as a whole. I don’t believe that Labor did the best they could have for Queensland but, when the benefits start to roll out throughout the state they will realize what they could have missed out on had Labor done nothing like the Liberal party will.
More recently, I think that people just don’t believe that labor can deliver what they say anymore.
I also can’t believe that the Liberal party is being so Bi partisan, instead of using there position to insure accountability and efficiency in the rollout. I find myself very disillusioned and that’s why I take this sort of thing seriously.
Your too close to the subject. Stand back a step and understand the ground it is standing on. Then understanding that, move into the subject knowing the power structures (political),the influences (profit/Market/Vested Interests), desires (good old plain greed), the goals (Wealth & the protection of it) and how to get them without having to deal with resistance (Upset Community).
Your feeling of disillusionment is normal in this. That is a point when you are very easy to heard around. But it is a point when you can also choose not to be herded around and inspect and question all information and think for yourself. The Mind is an amazing thing. Use it.
Malcolm Turnbull speaks of ‘extraordinary incompetence’ – implying that NBNCo is not merely incompetent in what it is doing, but that its incompetence is more than usually severe – that no other company, for example, could possibly match it. Now, I am not sure if incompetence comes in shades of grey, or, like death or pregnancy, is all or nothing, but it seems obvious to me that Mr Turnbull has never seen Telstra at work in a greenfield site. I live in one of their sites, and my experience suggests that NBNCo may have a definite rival in the incompetency stakes. I suspect that if NBNCo is indeed incompetent, then it is by no means extraordinary; rather, it is a stupefyingly ordinary kind of incompetence.
But perhaps Mr Turnbull is not really aiming his criticism at NBNCo. Perhaps his real target is the Government’s incompetence in encouraging national population growth without first putting in place the necessary infrastructure. Now, that is incompetence on a grand scale – but hardly unusual. Malcolm’s side of politics does it all the time.
A key difference between government companies and private sector is that in the private sector if you stuff up badly enough you go broke. In the public sector you ask your boss for more cash and complain that xxxxx jobs will vanish if you dont get it.
Governments are entitled to attempt to pick winners as long as they let people fail.
Big private sector companies do that to.
Just look at our car industry.
The reason why the private sector is more efficient is because it is accountable when it doesn’t meet deadlines. The suggestion, earlier, that NBN hadn’t fulfilled its contractual obligations “yet” is a perfect example of what’s wrong with a big government owned monopoly that isn’t accountable. If this was Telstra withholding fixed line connections for months on end, there’d be riots in the street and indignation in the media. But because it’s the NBN, apparently it deserves special treatment because….fibre? What a joke. Some people here ought to grow up.
They aren’t withholding any connections. It is up to the developer to organise the connections. If no private company will do it NBNCo is the privider of last resort and they get put in the queue. They are not the ones meant to be rolling out all the greenfields but a fall back safety net if that doesn’t happen. It comes down to developers trying to saved a grand or so a property. Why you would buy a property off a developer who has made no provision for fixed line I don’t understand. Maybe people are being caught out because it is all to new.
Maybe the NBN does deserve special treatment. It has to build a whole new network because the Market failed to do so and instead played a game of extortion. So before you pick on the NBN, you better get your responses nutted out in your PR Firm to explain why you’re wonderful Market failed to deliver what the NBN is going to deliver. Good luck and we eagerly await your answer. By the way, skip on the promises as we know how rare they are ever fulfilled if the public is the benefactor.
” If this was Telstra withholding fixed line connections for months on end, there’d be riots in the street and indignation in the media.”
Sorry to tell you but this statement is complete and utter rubbish.
Telstra quite frequently take months on end to install fixed line connections. One of my friends moved into a greenfield site and had to wait 4 months for his telephone connection due to Telstra delays.
Another friend is STILL waiting for a fixed line connection after a month with no ETA other than “maybe December”
It’s one thing to say stuff like “Telstra would never do that” but some facts would be nice.
@Brendon, I’m sorry to tell you this but Telstra don’t install copper to Greenfields anymore. And it only installs fibre when there is somewhere to connect it to. Many new estates are too far from the exchange so it quite often falls to NBNco or a private contractor to install all the infrastructure. For some early Greenfields estates people could be without fixedline for anywhere up to 4 years.
Generic person ( A truly appropriate name.)
” the private sector is more efficient is because it is accountable when it doesn’t meet deadlines.”
And I am a wonderful person because people criticise me when I am not.
“If this was Telstra withholding fixed line connections for months on end, there’d be riots in the street and indignation in the media.’
I don’t recall riots in the street.
And you are telling us to grow up!!!
The NBN gets special treatment because it doesn’t have unlimited funds or personnel to roll out infrastructure to the whole country in one day! This is NBNco doing the best they can for the best value for money. Remember, Rome wasn’t built in a day.
The greenfield sites that are being built by NBNco were applied for by developers who believed that they could make more money by letting NBNco do it. They would have got it done sooner by a private company but it would have cost a lot more to both install and then the home owner would have had to pay more to the few ISP’s that would be servicing the private sector fibre untill NBNco eventually took managment of it.
What the home owners weren’t told was NBNco would do that area when it got to it, not shortly after the application which is how the private sector do it.
The _only_ thing the private sector is accountable to is shareholders (and only the major ones), private companies miss deadlines all the time, but they don’t end up in the “bad books” unless they have profit downgrades.
In fact the CEO and management teams of almost all companies have at some stage, after telling shareholders how they missed their profit forecasts miserably, then had the audacity to ask for and accept huge salary increases and adopt easily met incentive targets, which included huge increases to their own personal share holdings in the company.
As someone living in a slightly older greenfield estate (5 years old), we have copper (yay)…however Telstra only deigned to put us in on some form of RIM. so ADSL 1 FTW.
Whilst this IS better than nothing, I dont think you can say “look, its NBN’s fault”. NO ONE is putting decent infrastructure into new estates. Why should the NBN be any different?
“Around Australia there are thousands of people in new housing estates who now have no telecommunications other than a mobile phone.”
…from the guy that says that mobile wireless is the only thing that people want and need?
‘Madame, just assume that we’re not coming at all.’
I have a feeling this quote was taken out of context. It sounds like something I might say, one rational human being to another. If you haven’t got something yet, then you should operate under the assumption it is not available and plan your life around that rather than just stand still, waiting for it. If it comes (as it will, eventually), then it gives you a new, better option. If it doesn’t (however unlikely), then your life is no worse for it.
Your conclusion on new zones being uncertain zones is spot-on there, Renai. Lack of infrastructure is just a part of moving to a new zone, and people should plan around that, and I’m sure that most people do.
NBN originally wast a first resort provider? but because complaints from Industry (the same ones that Turnbull has been at opening launches like OptiComm) didn’t want that to happen.
So none can really complain on NBNCo for any faults regarding to greenfield estates.
And because of that argument – Now NBNCo is last resort provider.
Yet Turnbull is complaining that NBNCo isn’t doing enough, perhaps he should put his investments into greenfield estates where NBNCo could rollout, like he’s been investing no tomorrow in overseas investments.
Turnbull is complaining because he can’t complain about nothing else.
So, to recap for those late to the story, Malcolm Turnbull is upset that the NBNCo he doesn’t want isn’t being rolled out fast enough….
That about sums it up! :)
I couldn’t have put it better myself. But it does raise the question of why a supposedly intelligent man would keep announcing plainly ridiculous contradictory statements.
Maybe he is being tongue in cheek in a way some of the less intelligent in his party cannot figure out and thus cannot hammer him for? If that is the case, I think it’s the funniest thing, politically, this year!
I love a good laugh so I might actually waltz blindly down that path for the giggles I can get. Please don’t burst the bubble Malcolm. :{D
I thought the whole issue with Opticomm was that the fibre they installed wasnt compliant with the NBN Co , thus isolating that estate from the rest of the network..
Having the NBN Co as the provider of last resort makes little sense until the area is already NBN enabled / installed.. Otherwise were do the optic fibres run too? do they have to setup hundreds of temporary POI’s for greenfields to enable a telephone to work until the rest of the network comes to an area?
Other than that , I was under the impression that developers could go with any fibre installer they liked , but if you want to connect ot the NBN you had to use a compliant design and pits/pipes …
I’m impressed, I have to admit. Rarely do I encounter a blog that’s equally educative and entertaining,
and let me tell you, you’ve hit the nail on the head. The issue is something which not enough men and women are speaking intelligently about. I am very happy I found this during my hunt for something relating to this.
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