news Radio shockjock Alan Jones made a statement riddled with factual errors about the Federal Government’s National Broadband Network project on his radio program this morning, describing it as a “white elephant” and a “disaster” and inaccurately claiming that the future of telecommunications is “clearly wireless”, rather than the mainly fibre model the NBN is mainly using.
Jones’ comments this morning stemmed from a report in The Australian newspaper that negotiations had collapsed between the Labor Federal Government and the Coalition NSW State Government over access to NSW power poles to aid in NBN Co’s fibre rollout across NSW. The spat is only the latest disagreement between the Labor Federal Government and the predominantly Coalition-dominated state governments over the NBN, with Victoria having been particularly unhappy with the NBN deployment.
“Well this NBN disaster rolls on,” said Jones. “The white elephant promotes cable technology when the future is clearly wireless. And it’s hopelessly behind schedule, hopelessly over budget, hopelessly unable to capture the public’s imagination. And will be obsolete before it’s built, but polls today say it’s 50-50 [laughs]. How high would they be in the polls if they got something right? Only about 15 per cent of households have bothered to connect to it where it’s been rolled out – 15 per cent.”
“Some say we’ll eventually fork out $50 billion to build it. It’s not in the budget, and it’s hard not to see why. Consider this for example, I see the O’Farrell Government is fighting a last-ditch battle with the Commonwealth over the cost of rolling out NBN cable onto New South Wales power poles where cable can’t go underground. The Federal Government’s now threatening to use draconian laws to overrule New South Wales, a move which the State Government says will force it to increase the cost of electricity to consumers by between $5 and $7 for 20 years.”
Unfortunately, Jones’ statement this morning on air appears to contain a number of incorrect statements.
The idea that Australia’s broadband needs could be served in future by wireless technology — especially 4G mobile broadband is not a new one. It has been raised repeatedly by the Coalition over the past several years as an alternative to the fixed FTTH-style rollout which predominantly features in the NBN. The case for wireless as a future broadband replacement for fixed infrastructure has been strengthened by the huge growth in uptake of 3G and 4G mobile broadband services in Australia, with telcos like Telstra adding on more than a million new customers a year.
However, the global telecommunications industry is currently almost universally in agreement that in every country, telecommunications needs will continue to be served by a mix of fixed and wireless infrastructure.
In Australia, for example,, commentators such as Telstra CEO David Thodey have consistently stated that they expect Australians to buy both mobile and fixed broadband packages in future, as they serve differing needs; fixed broadband to supply homes with powerful connections to facilitate big downloads such as video, and mobile broadband when outside the home, for access to services which typically require lesser capacity. In addition, mobile towers typically also require their own fibre connections to funnel data back from wireless connections to the major fixed-line telecommunications networks.
Secondly, Jones’ comment that the NBN will be obsolete before it is built is also incorrect. The fibre technology while will constitute the vast majority of the NBN rollout contains the potential to be upgraded to deliver 1Gbps speeds to premises and potentially higher speeds in future; the deployment of this technology universally around Australia is expected to place Australia amongst the global leading countries when it comes to telecommunications. It is expected that this technology will be in use for multiple decades – at least between 30 to 50 years.
Jones’ statement that the NBN is “hopelessly unable to capture the public’s imagination” is also incorrect. A series of polls taken over the past several years has shown that the NBN project has continued to enjoy strong levels of popularity since the last Federal Election, even amongst Coalition voters.
In addition, Jones’ statement that the NBN should be included on the Federal Budget is also incorrect. Most of the funding for the NBN does not appear in the Budget, as, according to accounting standards, it is not an expense as generally understood, but is actually a capital investment expected to generate (according to its corporate plan) a modest return of 7.1 percent on the Government’s investment, over the period through to 2030.
According to a research note published last year by the Parliamentary Library of Australia, Labor’s budget treatment of the NBN is correct. “Australia has adopted internationally accepted accounting standards, and these are applied in the budget treatment of the NBN,” the library’s Brian Dalzell, who works in its economics division, wrote in the report. Shadow Communications Minister Malcolm Turnbull has acknowledged the accuracy of the NBN’s accounting treatment, although it is still disputed by other Coalition figures such as Opposition Leader Tony Abbott and Shadow Treasurer Joe Hockey.
In addition, Jones’ statement that only 15 percent of households have bothered to connect to the NBN where it has been rolled out is misleading. In areas where the NBN’s fibre was rolled out first, such as Kiama in NSW, take-up rates have been closed to 40 percent and growing. The closure of Telstra’s copper network, and the HFC cable networks operated by Telstra and Optus, will push this figure dramatically higher in all areas over the next several years, as the NBN becomes the monopoly provider of last-mile fixed broadband infrastructure in Australia.
Jones’ statement that the NBN is behind schedule and hopelessly over budget contains some grounding in truth. In August the company released its new corporate plan, which showed that the project was six months behind schedule and that the overall capital cost of the NBN build had increased by 3.9 percent. However, this was offset by the fact that the total capital cost for the NBN was “significantly less” than the $43 billion originally announced by the Government in April 2009, Communications Minister Stephen Conroy and Finance Minister Penny Wong, who are jointly responsible for the NBN. said at the time, and the delay was less than the nine-month delay expected to have been caused by the lengthy negotiations around the $11 billion deal NBN Co has signed with Telstra to transfer its customers onto the NBN infrastructure and gain access to Telstra’s infrastructure. The 3.9 percent increase in the NBN’s capital costs is believed to be within industry margins of error for a project of this scope.
Jones’ comments this morning reflect only the most recent occasion on which the shockjock – who has strong connections to the Liberal side of politics – has inaccuractely criticised the NBN. In May last year, for example, the radio broadcaster incorrectly stated that German researchers had demonstrated technology which would make the NBN obsolete, delivering speeds 2.6 million times faster than those possible under the Labor project, referring to so-called “lasers” used in the research. In fact, the research breakthrough demonstrated the strength of the NBN’s core fibre technology.
In addition, Jones’ inaccurate comments this morning come just several weeks after the broadcaster was ordered to undergo basic journalism training by Australia’s media regulator, the Australian Communications and Media Authority, after making an incorrect statement regarding carbon dioxide emissions in March 2011. ACMA ruled that Jones’ program would be forced to fact-check certain material before it went to air.
I think we know enough by now not to take anything Alan Jones says about the NBN seriously. I note that Jones had until the end of November this year to undertake his required basic journalism training. Perhaps the broadcaster has not yet undergone that training, and we can expect a more factual approach from him in future when it comes to the NBN. However, personally, I’m not holding my breath.