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Opinion, Telecommunications - Written by Renai LeMay on Wednesday, November 28, 2012 12:07 - 133 Comments
Turnbull’s right: ‘Under construction’ NBN stats are worthless
opinion Malcolm Turnbull is absolutely correct in his claim that NBN Co’s focus on nebulous statistics regarding the number of premises where it has commenced or completed construction are “complete nonsense”. The company should stop using this figure as a benchmark of its progress, and focus only on areas where it has actually finished building the NBN.
If you were up past most people’s bedtime last night, you would have witnessed on the ABC’s Lateline program (full transcript and video available online) a spectacle which those of us who follow events in Australia’s telecommunications industry have come to regard as a semi-regular event: Communications Minister and Stephen Conroy facing off against his opposite, Shadow Communications Minister Malcolm Turnbull.
Like most Australians, I enjoy a good tussle, and last night’s was a corker. Over the past decade I’ve come to enjoy Conroy’s performances, in parliament and out. The good Senator is peerless in Australia’s Federal Parliament when it comes to the sheer contempt with which he holds his opponents and the aggressive way in which he bites off every last insult and hurls it at whoever he’s facing. Conroy’s acerbic manner, which earned him so much enmnity when he was on the shaky ground of the Internet filter debate, serves him well now that he has Labor’s NBN project in his corner; an initiative which he knows has the support of most Australians and the unabated approval of most technologists.
But then, I’m also a fan of Malcolm Turnbull. Where the soccer-loving common man Conroy is often very little more than a blunt instrument – if a glorious one – Turnbull is always silky smooth in his debates. Sometimes you’d think butter wouldn’t melt in the Earl of Wentworth’s mouth; and I often feel as though generations of aristocrats are smiling fondly at me through Turnbull’s eyes as he gently needles his opponents. Both men can laugh, but Conroy’s laugh is more often raucous and divisive, while Turnbull likes to give little chuckles at his own superb wit. When Turnbull chuckles, you know that he’s just slid the needle in between your ribs; the joke is that you probably haven’t even felt it yet.
Last night both gentlemen were in fine form; both know the National Broadband Network debate very well by this point, and all of their arguments have become so well-polished and honed that at times, they appear to be dancing, rather than arguing. To borrow an analogy from the excellent Wheel of Time fantasy series, Conroy’s line of reasoning about the merits of fibre to the node sliced towards Turnbull, only to be deflected by the Liberal MP’s riposte about the cost of Labor’s fibre to the home-based NBN and the speed of its rollout. Details of network design were batted aside by questions about the credibility of NBN Co’s management.
At this point, we need not really detail precisely what each parliamentarian talked about; we could instead insert a set of placeholders to detail their exchanges. You know what I’m talking about here: Conroy’s argument about the technical superiority of fibre to the home could be labelled ‘Technology Template 1’, while Turnbull’s inevitable reply about the delays in Labor’s NBN implementation could be coded as ‘Arthritic Snail Template 2’. Perhaps codifying the pair’s repetitive arguments in this manner could get a little confusing for the casual onlooker, but then again it might save oxygen, which is always a valuable aim in today’s political environment.
Yes, I wax a little lyrical. Because, like many who follow the NBN debate, I tire of seeing the Government and Opposition continue to repeat the same time-worn arguments about the project. Like most, after five years of this kind of debate, I’d prefer to see them settle their differences and just focus on getting on with the job.
However, in last night’s debate there was one point which I want to examine a little more closely, and it’s one which Turnbull has been banging on for a while about: The question of how to measure NBN Co’s progress on actually rolling out its fibre, satellite and wireless network.
If you consider network deployment from the perspective of the common Australian citizen, there are probably only two real ways to measure the progress of NBN’s deployment, both fairly easily to understand. The first is how many premises NBN Co has reached with its rollout: In short, how many buildings have had the NBN infrastructure rolled to their door, and could connect to that infrastructure if they so desired? The second measure is that of how many active connections NBN Co actually has on its network. Sure, its network may run past many premises, but how many businesspeople and residents in those premises have actually chosen to start using the NBN infrastructure?
Of these two measures, the first is clearly the prime statistic which the Opposition, the media and everyday Australians should be holding NBN Co to account for. This is because this is the only measure over which NBN Co has complete control. Its primary role is to build the NBN and maintain it: And that is what we should be holding the company accountable for.
The second statistic gives a good indicator of usage of the NBN infrastructure, but ultimately it’s somewhat misleading, because it is dependent upon too many factors outside NBN Co’s control. For starters, it is retail ISPs like Telstra, Optus, TPG and iiNet that sign up real-world customers, not NBN Co. In addition, eventually most customers in its rollout zones will connect to its infrastructure anyway, as existing copper and HFC cable networks are shut down. It doesn’t really matter how many people connect to the NBN as it is rolled out; eventually, almost everyone will.
Last night, however, Turnbull and Conroy argued for much of their debate about the validity of a third statistic which NBN Co and the Government have injected into the debate over the past year: The highly nebulous number of premises where NBN Co has commenced or completed construction of its network. NBN Co chief marketing officer Kieren Cooney defined this statistic as follows, in a Senate Estimates session in October (PDF): “When we say ‘commenced’, that is exactly what we mean—that is, the first time construction crews go out into the community to begin rodding and roping and to begin the actual construction process in the community, often closing off streets as part of it.”
It is also this figure which the Government and NBN Co have set themselves as a key performance indicator for the network’s progress in being rolled out this year. In August this year, Communications Minister Stephen Conroy published NBN Co’s latest corporate report and pledged that the company would have commenced or completed construction at 758,000 premises around Australia by the end of 2012.
Last night, as he has done consistently since NBN Co first introduced this new statistic, Turnbull heavily questioned its use as a public benchmark of NBN Co’s progress. “I have never taken seriously his figure of “premises where construction has commenced or been completed”,” Turnbull told Lateline host Emma Alberici. “It is a complete nonsense, so what he put to you at the outset, those figures – that 758,000 figure – is nonsense. It is designed to mislead people into thinking the NBN is making progress when it is not … The confusion is that he uses this figure of 758,000 premises “under construction” which means … well who knows what that means …”
Turnbull’s contention – and it’s a valid one – is that the Government and NBN Co cooked up the figure of “premises commenced or completed construction” as an alternative to its existing premises completed and active connections statistics to change the nature of the debate over the company’s progress – to, as Turnbull put it last night, “create the impression that is there is real progress being made”. “It’s a nonsense figure and it’s calculated to mislead people,” Turnbull said last night.
I wholeheartedly agree. The problem with this statistic is that while it gives some ‘flavour’ of what level of activity is going on in NBN Co’s deployment, its definition is nebulous enough that NBN Co and the Government can include almost anything within its bounds.
Last night, for example Conroy himself attempted to define what the statistic means, and his definition differed markedly from that of Cooney’s given at Senate Estimates last month. Like Cooney, Conroy described the figure as referring to premises where NBN Co contractors were out in the streets working, but also included in his definition the number of “construction contracts issued by NBN Co”, leaving out of his definition any explanation of whether he was referring to the multi-billion dollar construction contracts signed by NBN Co or just the concrete construction orders it gives its contractors.
Then, too, neither Conroy’s definition nor Cooney’s definition accurately represents NBN Co’s construction process, which is believed to actually start with a request to Telstra for the telco to get its ducts – used for NBN Co’s fibre under the pair’s $11 billion contract – in certain areas in order. NBN Co then does more detailed design work, including mapping geographical address data to the actual physical layout on the ground, and only then hands off physical work to subcontractors.
What this means is that when NBN Co starts focusing on a certain area for construction is that the time when physical work on that area may commence can actually be markedly different from the time when it’s actually marked as technically being under construction. In short, if you surveyed all of the areas which NBN Co currently has marked ‘under construction’, it would become clear that not all have construction crews actually laying fibre.
To my mind, the fact that NBN Co says it has certain areas ‘under construction’ may mean at times very little more than that it has started actively planning to roll out fibre in that area, and that it has started talking to Telstra and its construction contractors about it – not that there are workmen with big boots getting muddy as they pull fibre through Telstra’s ducts and lay it on power poles and to houses and business premises.
Now, it is true that this statistic is an important one. Australians have a right to know how frenzied NBN Co’s activity is at any given time, and it is very important for the NBN debate that we know how many areas NBN Co is actively working on at any given time. This directly plays into the Coalition’s ability to substantially change the NBN project, say to a fibre to the node model, as it should not simply halt construction in areas where it has begun, should a Coalition Government take power. But equally, we should not allow this kind of nebulous statistic – which can so easily be abused to paint NBN Co’s rollout and adoption progress in whatever light NBN Co and the Government wishes to paint it – to become the dominant statistic which we rely on in judging that progress.
The statistic that the NBN debate must rely on is the premises passed statistic – this is where NBN Co has actually finished deploying its network in a certain area. NBN Co’s targets on this statistic are as below (from its latest corporate plan in PDF format).
The secondary statistic which the NBN debate must rely on is the premises with active service statistic. This is where customers have actually started using an NBN service. NBN Co’s targets on this statistic are as follows:
The only time when the nebulous ‘premises completed or commenced’ statistic should be used is when commentators on the NBN are trying to show overall activity which the company is carrying out. But at all times such commentators must remember that this is not a concrete measure with a hard definition which we can benchmark NBN Co on. It’s a soft statistic – and it can be prone to manipulation.
From today, on Delimiter, we will be using this approach: Primarily, we will benchmark NBN Co’s progress against its targets on the premises passed statistic. In all normal articles, we will use only this statistic to hold NBN Co accountable. When we’re discussing retail ISPs and their interaction with NBN Co, or if there is some other overriding reason why another statistic may be useful, we will use the secondary ‘premises with active service’ statistic as a complement to the premises passed statistic.
At all times we will avoid using the premises completed or commenced statistic, as we consider it misleading and open to manipulation. As an alternative, we will ask NBN Co to give more regular updates on how many premises it has passed (completed), as we consider this the prime benchmark by how the company’s progress should be judged. On the first of each calendar month, starting this Saturday 1st December, Delimiter will query NBN Co’s public relations spokespeople or management and ask for an updated figure for this statistic. Taken over time, this should be the best way to judge NBN Co’s rollout speed; after 3-4 months, it should be easy to see the company’s rollout ramping up on this benchmark.
If NBN Co declines to provide this figure on a monthly basis, that will only give credence to Malcolm Turnbull’s argument that the company has the transparency of “the Kremlin”. Fair?
Image credit: Office of Malcolm Turnbull
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