Turnbull loose with facts on NBN finances

141

news Shadow Communications Minister Malcolm Turnbull has inaccurately claimed that the Federal Government is wasting tens of billions of dollars building its National Broadband Network project, despite the fact that the organisation’s business plan shows it will actually make a modest return on investment for the Government.

In an interview with ABC 702 radio this morning (the transcript is available on Turnbull’s site), Turnbull stated that the Federal Government was “spending a stupendous amount of money” on building the NBN. The NBN infrastructure will primarily be composed of fibre to the premises cables to most of the population, but a small percentage of Australians will connect using satellite or wireless solutions.

“… the subsidies there run into the tens of billions of dollars – the value of the network once completed will be a fraction of what the government is spending on it,” Turnbull told host Linda Mottram. “So they’re spending tens of billions of dollars on subsidising fixed line broadband to your home”.

The refrain that the Government is over-spending on the NBN is one that Turnbull and other members of the Opposition have made repeatedly over the past several years, with Turnbull in particular favouring a more modest network construction build based on Fibre to the Node technology, rather than the fully-fledged Fibre to the Premise model of the NBN. However, there is substantial evidence that Turnbull is incorrect in his assertion that the government is throwing money away when it comes to the NBN.

This is because the NBN project is currently projected to actually make a long-term financial return on the Government’s investment in the project over the long term through the year 2033. In its 2010 corporate plan (PDF), NBN Co forecast this amount to be between 5.3 percent and 8.8 percent — from $1.93 billion in the worst case to $3.92 billion in the best case. This means that eventually the NBN will make money for the Government rather than cost it — including returning its original investment.


In NBN Co’s most recent corporate plan released in August 2012, NBN Co firmed that figure at 7.1 percent. The project as a whole is slated to cost $37.4 billion in capital expenditure to construct, with an additional $26.4 billion to be spent on operating expenditure through to the year 2021 when the project is slated to be completed construction. However, NBN Co is also projecting revenues of $23.1 billion over that period, and through the decade after that period it is projecting that it will recoup the Government’s investment in the project and make a return on the investment of 7.1 percent.

After that period, NBN Co as a whole will also remain as a positive asset on the government’s books. It is expected that the Government will eventually sell off at least part of the company in a similar fashion as it did Telstra, which was also a former government-owned telecommunications monopoly. It’s unclear how much NBN Co would be worth at that point, but at a certain point in the next several decades, the company should have repaid its obligations to the Government and be making substantial revenues and profits of its own.

Turnbull also appeared to be somewhat misleading in another portion of the interview with the ABC, in which he stated that the Coalition would “complete the NBN” if elected, and “complete it much sooner than the Government would and at much less cost”.

Under the Coalition’s current telecommunications policy as publicised through several speeches and media releases Turnbull has made over the past several years, the Coalition would retain much of the structure of the current NBN project, but focus on using fibre to node technology rather than fibre to the premise.

Because this model differs markedly from Labor’s FTTP NBN build, there exists significant debate in the telecommunications industry as to whether the Coalition could be said to be “completing” the NBN, as it uses a completely different technology than under the Labor plan. It is possible that the Coalition’s FTTN build could be upgraded later to support FTTP infrastructure, but Turnbull has not committed to this kind of upgrade.

In addition, the Coalition has not yet released the financial details of its own rival NBN policy. An analysis by Citigroup published in November 2011 found that the Coalition’s policy would cost $16.7 billion. In addition, unlike the Government’s NBN plan, the Citigroup report didn’t mention what financial return, if any, the Coalition’s proposal was slated to bring in on its own investment, meaning that there is a possibility it may not make a profit and may instead cost the Government money.

opinion/analysis
We’ve been through this before. Current analysis shows that the NBN will not cost the Government money; it will make the Government money in the long term. Current NBN uptake shows higher than expected demand for the NBN and for higher speeds on the NBN, meaning that the NBN will very likely pay for itself sooner than expected.

In comparison, the Coalition has not released any financial details of its own proposal; not what it will cost, whether it will make a return on investment or how the Government’s current NBN project would be modified under a Coalition Government. Turnbull’s statements are just not verifiable at this point.

Malcolm Turnbull may hold the opinion that the Government’s financial analysis of NBN Co’s economics and future return on investment is flawed. He wouldn’t be the only one, although it’s not the mainstream opinion. But if so, the onus is on the Shadow Communications Minister to provide evidence that this is the case; and not just sound bites. We’re talking about a national telecommunications policy which will guide Australia’s broadband needs for the next half-century. We need more than pithy quotes from the Member for Wentworth in order to make decisions about the future of that project; we need hard data. The Government and NBN Co has provided that hard data (with a few exceptions). Let Turnbull and the Coalition do the same.

Image credit: Office of Malcolm Turnbull

141 COMMENTS

  1. Interesting that he says the NBN will be worth a “fraction” of what it will cost to build. I suppose he would wish us to believe that the NBN as it is will end up being worth EXACTLY the same amount as what he’s proposing because it’s definitely not worth less. It would be nice if he actually told us what that figure was to the nearest $10bn.

    • Technically he is correct. They are aiming for an 8% return aren’t they? 108/100 is a fraction :-)

  2. Ahhh the election is getting closer MT… I was holding some tiny bit of hope that you would finally come clean and agree with the NBN and keep it rolling if the Liberals won.
    Guess it’s too late now, dug yourself in a hole to deep to get out of.

  3. ‘The Government and NBN Co has provided that hard data (with a few exceptions).

    The sole source of the detailed ‘hard data’ is the NBN Co Business Plan published four months after the 2010 election.

    ‘Let Turnbull and the Coalition do the same.’

    They may well do.

        • The fair and impartial pro NBN pundits have made their judgement I see, you may not like being reminded of the timing of the NBN Co Business Plan release that came out after the 2010 election on which the majority of the detailed analysis of the viability of the Labor NBN could seriously start, but that’s exactly what happened.

          • @ alain.

            No one is arguing this point… we are shaking our heads in disbelief at being presented with such warped logic (comparing apples/oranges) and blind argumentative bias, over a nothing detail.

            You are clearly suggesting that because the NBNCo Corp. Plan wasn’t released until after the 2010 election that the Coalition have no need to release their broadband policies until after the next election? Then say you we don’t like being reminded of the NBNCo Corp Plan release?

            ***Yes… the Corporate plan was released 4 months after the election***… happy?

            Now, comparing apples with apples, if elected we’ll see how long it takes the Coalition to have their “Corporate or Biz Plan” in place. Considering the CBA they said they will do is estimated to be 6 months, I’d suggest their plan will be out well after 4 months after the election.

            Also comparing apples/apples again, and what I have since explained to you is, we are talking about policies not the Corporate Plan… and the current NBN policy was released April 2009, 16 months before the 2010 election. Voters knew what was going to happen, well in advance.

            Going by your logic of comparing what the two political sides have done, would mean that to have emulated the government the Coalition should have released their policy around April 2012.

            So… you obviously do not like being reminded of the timing of the NBN announcement that came out well before the 2010 election which outlined the NBN “…

            “But that’s exactly what happened.”

          • Yes alain… that was the policy they released just before the 2010 election.

            It’s now 2013 and since then, even you, their most trusty foot soldier, admits he doesn’t know where the Coalition are currently at.

            Do I really need the permalinks again?

          • Based on the link provided by NBN Alex, the Coalition should have at least a framework of a policy up and running.

            Also take note that this was a joint media release with the PM, the treasurer, the finance minister and comms minister together. If any plan seems like it has been drawn up on the back of napkin, it currently appears to be Malcolm Turnbull’s.

            The most significant infrastructure building project in a generation, and the opposition can’t even release an official alternate policy.

            It would make me laugh if I didn’t think the coalition had a bloody good shot at winning the next election despite their lack of any real policy.

    • And the only source of ‘hard data’ to say the business plan is wrong is the opinion of some Liberal politician or his unnamed friend ‘in the industry’.

      1 piece of evidence beats 0 pieces.

      • I wasn’t referring to the content of the Business Plan as such but the timing of its release, the hard analysis of the NBN can only take place when you compare the contents of the Business Plan and its timeline predictions of costings, ROI, premises passed etc with progress reports as the roll out progresses.

        What we are asking the Coalition to do is more than we got out of Labor before the August 2010 election, that’s ok and is what SHOULD happen, but please don’t criticize the Coalition without acknowledging we want a better pre election detailed Communications policy release than what Labor gave us prior to the last election.

    • “They may well do.”

      I find this amusing; you intimate this, right after stating (earlier) that the Liberal plan is not relevant to the NBN discussion; it’s very relevant.

      If people are going to compare the NBN, and Turnbull is going to compare to his plan, then I think it’s about time he got a lot more serious about his alternative.

      Otherwise, it’s just soundbites and posturing.

      • @Brendan

        Well a lot is in the public domain already, and one independent Communications commentator doesn’t have a problem knowing what it is all about to provide his assessment.

        Renai’s comment at the end is good also.

        ‘But I guess what Budde is saying here — and I agree — is that Australia won’t be badly off if the Coalition takes power at the next election and enacts its policy. Coalition NBN policy has rapidly been approaching “viable” and “workable” over the past 12 months; and that is a very good thing for Australia indeed.’

        http://delimiter.com.au/2012/11/15/budde-praises-coalition-nbn-plan/

        We are still 7-10 months out from the next election, plenty of time for more detail.

    • The business plan may well have been released 4 months after the 2010 election… so if elected, let’s see if MT can manage a business plan for his proposal 4 months or less… following the next election?

      But the pertinent point you typically omit – the actual current NBN policy was announced some 16 months before the 2010 election.

      All we are asking for is an actual policy (not a detailed plan) to be announced by MT. So to answer Bpat… b)

        • Err…but typically, in your response to Brendan, you forgot about these comments in from Renai..

          “Of course, that doesn’t mean that the Coalition’s rival NBN plan is a better plan than Labor’s NBN vision. Right now, I think it’s clear that Labor has the better and more visionary broadband vision for Australia; and it’s certainly mapped out in far more detail and has the support of more of the technology industry than the Coalition’s plan does. Australia will be better off under Labor’s broadband vision.”

          Glad you agree with Renai…

          Nice job at trying to divert the thread from the topic though ;)

          • Nice try, we are talking about understanding what the Coalition Policy is BEFORE the election this year, that article was written in November last year when we certainly did have a hell of a lot more detail on Labor policy because the NBN Co Business Plan was published in December 2011 and dissected and analyzed to death for nearly 12 months!

            Many comments in here and tech forums like Whirlpool indicate they know exactly what the Coalition has in store for us but they are locked into a ALL FTTH outcome mindset, it would not matter how much detail and costings were provided in the coming months by the Coalition promoting speed of rollout or a more cost effective outcome to the Government, their decision has been made:

            “If it is not a ALL FTTH rollout I ain’t interested in evaluating any other alternative”.

          • ‘published in December 2011 and dissected and analyzed to death for nearly 12 months!’

            That should be 2010 and 24 months.

          • @alain

            Many comments in here and tech forums like Whirlpool indicate they know exactly what the Coalition has in store for us but they are locked into a ALL FTTH outcome mindset, it would not matter how much detail and costings were provided in the coming months by the Coalition promoting speed of rollout or a more cost effective outcome to the Government

            And?? People are entitled to the opinion that FTTN is a waste of time. And money. ESPECIALLY seeing as we’re already WELL into a rollout of FTTH only.

            “Cost effective” by the way, in the way you use it here and the way in which the Coalition use it, is only talking about TOTAL CAPEX. That is far FAR from the most important number. Until you admit that, we can’t really discuss otherwise, because you’re not seeing the project over it’s entire lifetime.

          • @seven_tech

            Thanks for re-enforcing what I said to the letter, so it doesn’t matter if the Coalition provide the best costed detailed and fleshed out Communications policy ever in the history of pre election policy announcements because your mind is closed if it contains the term FTTN anywhere.

            So why do you and others here bother to even ask for a more detailed pre election Coalition policy, are you just ‘pretending’ you will give it any consideration?

          • @alain

            Where did I say in that comment I was one of those people??? Show me and I’ll retract it, because I’m not.

            It is their opinion and right to HAVE that opinion. I never said I had that opinion.

            What I said- ME- was YOU (and the Coalition) are only comparing the CAPEX, NOT the total project cost when you say most “cost effective”. And I won’t argue with you about FTTN or FTTH if you won’t admit the CAPEX of a project is NOT the only or most important detail of spending on a projects entire lifetime.

          • Sorry I don’t know where you are going with this CAPEX vs total project cost thing at all, unless you want another lengthy FTTN vs FTTH debate all over again which has been flogged to death in Delimiter and other forums over and over before.

            So correct me if I am wrong, you are saying you are currently on the fence re FTTH vs FTTN and have not made up your mind already that the Labor FTTH rollout is the best solution?

          • @alain

            It’s not complicated. CAPEX for FTTH is MORE than FTTN. Total project cost, over the lifetime of the project, is LESS on FTTH than FTTN. End of story.

            And I’m interested in seeing Malcolm’s claim that he can rollout FTTN “faster” and “cheaper” than the NBN. If he can show me figures that say it will be at LEAST 3 years faster than the NBN (anything less is pointless), GUARANTEED (ie, he has figures from REAL WORLD tests from Telstra, cause they’re the only ones who’ve done this before), it will have the same or better coverage of the FTTH footprint (and at least as good in the wireless/satellite footprint) and it WILL cost only 1/3 of the $37.4 Billion total CAPEX of the NBN, then I’ll be seriously interested.

            I am, however, fairly sure I won’t need to worry about any of that….because that’s not going to happen.

          • @seven_tech

            ‘It’s not complicated. CAPEX for FTTH is MORE than FTTN. Total project cost, over the lifetime of the project, is LESS on FTTH than FTTN. End of story.’

            So you DO want to debate FTTN Vs FTTH all over except you have opened the debate answered it yourself and then shut it down.

            ‘If he can show me figures that say it will be at LEAST 3 years faster than the NBN (anything less is pointless),’

            Who says it is pointless if it’s more than that?

            ‘ GUARANTEED (ie, he has figures from REAL WORLD tests from Telstra, cause they’re the only ones who’ve done this before), it will have the same or better coverage of the FTTH footprint (and at least as good in the wireless/satellite footprint) and it WILL cost only 1/3 of the $37.4 Billion total CAPEX of the NBN, then I’ll be seriously interested.’

            Wow you set the conditions arbitrarily based on what? 1/3 is the cut off point, where does that come from? – and if they are not met then the Labor FTTH must naturally be a better solution.

            ‘I am, however, fairly sure I won’t need to worry about any of that….because that’s not going to happen.’

            That was easy, you have convinced me, Labor FTTH it is then.

          • @alain

            So you DO want to debate FTTN Vs FTTH all over except you have opened the debate answered it yourself and then shut it down.

            This is exactly what we’ve discussed thousands of times. If you want to show me evidence that FTTN costs less than FTTH over their respective lifetimes, I’m all ears. You never have though.

            Who says it is pointless if it’s more than that?

            Because you have to have a cut off point- FTTH IS technically better than FTTN and FTTH IS the end goal of FTTN so unless you save a substantial portion of time and money only going to FTTN, it’s pointless. MT said it might take 1/3 the time. That’s 3 years (assuming total of 9 years of construction and that’s being generous, seeing as we’re already nearly 2 years into that) and I’m giving him 6. I don’t think that unreasonable.

            Wow you set the conditions arbitrarily based on what? 1/3 is the cut off point, where does that come from? – and if they are not met then the Labor FTTH must naturally be a better solution.

            http://www.malcolmturnbull.com.au/blogs/malcolms-blog/why-the-coalitions-nbn-plan-is-superior-and-why-it-will-be-better-for-the-bush-too/

            3. Why can we do it cheaper? Fibre to the node, around the world, costs between 1/4 and 1/3 of fibre to the premises. That is the experience in North America and Europe. And in Australia with very high labor costs the differential would likely be even more.

            So he’s actually saying it’s likely to cost LESS than 1/3….

            And yes, if the Coalition can’t even meet their own targets of 1/3 the time and 1/3 the cost, while NBNCo. are currently AHEAD of theirs (and NBNCo’s are actually documented) then, yes, Labor’s policy IS better. I don’t see that as unreasonable?

          • Just to ease your mind Seven_tech, you are righ,. you have had this exact discussion over and over with alain. It must be a short term memory loss thing.

          • @seven_tech

            ‘,And yes, if the Coalition can’t even meet their own targets of 1/3 the time and 1/3 the cost, while NBNCo. are currently AHEAD of theirs (and NBNCo’s are actually documented) then, yes, Labor’s policy IS better. I don’t see that as unreasonable?’

            But that’s like a dog chasing its tail scenario, because we will never know if it IS actually 1/3 the time or cost until the Coalition gain power and their version of the rollout is completed, similarly Labor has been timelined out until around 2021 or whatever the latest completion figure is for the NBN Co FTTH, in the meantime we have a 2013 election (maybe a change of policy) a 2016 election (maybe another change of policy) and a 2019 election (change policy again?)

            We will ever get to see one policy without change through from the beginning to the end to determine if any one political party was right with all their original predictions on cost, connected premises and ROI etc?

            :)

          • @alain

            NBNCo. produced a Corporate Plan in 2010. It shows how they will make their targets. It was update in 2012. And will be updated again this year.

            IF NBNCo. reach their targets as laid out in the Corporate Plan, then that is VERY good evidence they can bring the NBN to completion for what they said it would cost and for how long it was planned to take and for how much they will make off it.

            Labor had a costed policy they had no detail on in 2007, while the Coalition had a FULLY costed policy WITH detail (supposedly) ready to go. And yet Labor won.

            The Coalition then tried again in 2010, with Labor now having a fully costed AND detailed policy (no CP yet) and they STILL beat the Coalition. (yes, I’m aware there are many other factors than comms in an election, but these points remain)

            The Coalition now have NO costings NO detail and Labor have not only fully costed, fully detailed (to the point where it’s TOO much detail) and complete business plan but ACTUAL WORK already occurring AS SCHEDULED on their policy.

            Basing your argument around the idea that Labor policy wasn’t as good as the Coalition’s in 2007 makes the NBN bad AND the fact that we’re in the same position now, but flipped (except we’re not) doesn’t work. Labor are delivering what they promised- actually, on the ground delivering. The Coalition didn’t even deliver what they supposedly had completely organised and was supposed to begin BEFORE the election, but didn’t.

            I’m gonna side with the party that has delivered and continues to deliver and is SHOWING us, month by month and quarter by quarter, they are delivering. If the Coalition cannot produce CONCRETE plans showing how much/long, why and how they would change NBNCo. to FTTN, it is completely rational to go with the party that has.

            Why on EARTH would you change a decision made upon evidence presented to you that it was correct, just because a second party says they can do it better with nothing to back it up???

          • “But that’s like a dog chasing its tail scenario, because we will never know if it IS actually 1/3 the time or cost until the Coalition gain power and their version of the rollout is completed”

            No, you are completely wrong. We know now they cannot complete the NBN for 1/3rd the cost. Most of the wireless will be complete by the election and if not Turnbull said he’d complete that and the satilite part of the NBN. That combined with the POI and backhaul already far exceeds 1/3rd the cost. Someone would have to pay the government about $10B and roll it out for free for their NBN to be 1/3rd the cost. Haven’t you even looked at the cost of various parts of the NBN? FTTH is only a fraction of the cost. Before commenting of what is cheaper and by how much you’d think you’d do at least that research alain.

            Labor would have to win the next election to see if their costs are correct. I already know that NBN using FTTN cannot come in at 1/3rd the cost (of 37 odd billion) as the cost of FTTH is not a large enough part of the cost. If they save 8b in the short term I’d be surprised. Then comes on top of that the subsequent rollout of FTTH, in a way short time the Turnbull wants people to believe. He said in 20 years time. He’d be extremely lucky if FTTN is sufficient for even 10. But of course they would have to get in to prove that they will not roll it out for 1/3rd the cost. But then I’d expect you to make excuses, say you didn’t mean 1/3rd, that it was only the FTTH part that was the 1/3 of the cost, blame Labor for FTTN cost blowouts, the poor condition of the copper. It was their fault Telstra stopped maintaining it because they anounced FTTH. Of course you have to then ignore that they severely cut maintenance when privatised and said the copper had no useful life thenm years before the NBN was anounced. But then you don’t seem to have trouble with being a hypocrit.

          • alain.
            With respect, you indicate the expectation of changes in plan and implementation with each 3 year election cycle as if that will provide an optimal solution.
            Once the FTTH GBE NBN is dismantled which the Coalition can achieve in their next term and the Nations communications infrastructure is committed to the private sector with eternal growing taxpayer subsidies and incentives the egg will be scrambled and the opportunity for a ubiquitous National infrastructure at reasonable cost to the end user with true retail competition will be lost for ever , the omellette cannot be unscrambled
            Sure the greenfields builders can provide in larger estates and developments something vaguely approaching the NBN as we know it.
            The brownfields will always be second class citizens.
            Telstra with their News Ltd. partners will have a stranglehold on Australia in every sense of the word.

            Consider the Velocity estates and Brisbane South – that will be Australia’s future. For competition a critical mass is needed

            Look to the services available and the pricing and regulation on the Brisbane South Telstra product.
            That is what we can anticipate, very limited or even negligible retail and service competition

          • @seven_tech

            The point remains, any predictions of 1/3 costs less for a Coalition rollout, 70% take up rate on the current NBN, 7.1% ROI, all debt paid off by 2033 etc etc are fine to make where we sit now in 2013 but we won’t actually know those targets have been reached until we reach or get near the targeted years, assuming no change of Government in the duration.

            Of course a change of Government this year is the game changer, if Labor get in again the next election in 2016 will have minimal effect on BB policy if the Government changes to Coalition because the FTTH rollout will be too entrenched to try and change anything, Telstra exchanges will have shut down and many massed migrations have taken place.

            What is a interesting scenario is if the Coalition win this year and Labor come back in 2016, but I digress. :)

            Also what makes predictions even more of a moving target is that we have had Business Plan Mk2 for 2012-2015 released by the NBN Co last year with changes to the original 2010 Business Plan, one of the major changes is that ARPU’s have revised downward and revenue targets are not as predicted in 2010, with a prediction this will be offset as ARPU’s will be higher later?, but that’s ok all you do is provide a amended business plan stating the new ARPU figures and revenue predictions and every one is happy.

            If Labor get in this year I assume we can expect yet another Business Plan covering 2016-2019 amending targets that have not been met in the 2012-2015 Plan or maybe even a amendment to the 2012-2015 Plan and everyone is happy again.

            On that basis if the Coalition get in this year and in their version of the business plan (released after the election) the cost is predicted to be 1/3 less than the Labor plan with ARPU figures of $xx and it looks like as we head into the 2016 election year targets are slipping you produce a amended business plan from your 2013-2014 plan stating what the new figures are and everyone is happy.

          • @Alain

            So because we can never know if NBNCo. will get to those forecast figures, we should assume they won’t and scrap it….? Yes, I’m very glad you’re not in government.

            NBNCo, from currently available evidence, are slightly exceeding their own targets. If they make their June target, will you be saying then they still deserve to be stopped ad they’re obviously wasting time and money?

            The 2012 CP changed from the 2010 CP because of scope change and once off delays from Telstra. You know that. I know that. Can we PLEASE just let that lie?? The next CP will no doubt be subtly different to this one. In which directions, I don’t know. Are you suggesting they shouldn’t change their business case and targets one way or the other if new information comes to light?? I believe if they were a publicly listed company that would constitute shareholder fraud.

            NBNCo. have NOT revised ARPU down, they revised the acceleration of ARPU down for these first years as a result of the Telatra delay. Go have a look at there 2012 corporate plan- it shows there, in black and white (well, blue and orange actually) ARPU raises ABOVE the 2010 plan in about 2015.

            If you’re going to argue at least argue with the data available.

          • @seven_tech

            Yes I am aware of all that, and the changes from one Business Plan to the next but the point is which you are aware of but you are skirting around the issue is that if the NBN Co amends the Business plan to accommodate missed targets and ‘scope changes’ as you put it what is the point of making predictions based on any Business Plan, the 2010 Plan is in effect now redundant.

            How many amendments to the Business Plan are you prepared to accept over the lifetime of this project – or does it not matter, if for example they revised the 70% uptake figure at some point is it all ok because it is stated in a amended Business Plan?

          • @alain

            As long as the business plan shows achievable targets and those targets will lead to a profit, does it matter how it changes?

            Let’s say it changes to say only 65% of people takeup landlines. But instead of 50% on 12/1, we only get 40%. That would mean the projected revenues are still valid. And from the small amount of evidence we have so far, that is EXACTLY along the lines of what is happening.

            Business plans change. Scope changes. Finances shift. You see NBNCo’s ONLY possible success as it MUST make 7%. Why? It provides communications for the ENTIRE country. As long as it isn’t run at a large loss, why should it matter how much money it makes?? It is serving its’ purpose and doing it well.

            You cannot see that NBNCo’s ONLY measure of success isn’t how much money it will make.

          • I would just like to understand what MT is planning to do about the copper CAN ownership.

            The examples he gives for FTTN being cheaper and faster and done elsewhere are for service providers that already own the copper CAN.

            Trying to compulsorily acquire it from Telstra at an estimated $20b and years of legal negotiations wont’ make it faster or cheaper, and subsidising Telstra to do it will lead to a poor regulatory and competitive outcome.

            My theory is this is why he went from ‘fully costed, ready to go’ to ‘it’s not ready’, is because he had everything priced except for CAN acquisition, or knew he would get torn to shreds if it was proposed that he would subsidise Telstra.

          • Seriously… “you” produce an article and when I run with it and embarrass you you then say nice try and bag the article “you you linked to” as being old :/

            Anyway, if there is all this info about the Coalition’s policy…

            … how come “you”. the one here claiming the info is there, doesn’t even know what the Coalition are planning…

            http://delimiter.com.au/2013/01/22/coalition-must-support-ftth-says-oakeshott/#comment-566869

            http://delimiter.com.au/2013/01/22/coalition-must-support-ftth-says-oakeshott/#comment-567000

            *shakes head*

  4. Why is the NBNCo repaying the government stake? Can the government have a zero equity stake in a GBE?

    The NBNCo will not break even until FY2022 at which point it will owe the government $17.6bn in missed dividends (at 7%). Does the NBNCo intend to pay the government that money? aiui it has to for the funding to be considered an investment. Is that wrong?

    If the NBNCo repays government funding linearly from FY2023 to FY2028 then it will have to pay $10bn in dividends over those six years.

    If the NBNCo pays the missed dividends, pays normal dividends from FY2023 to FY2028 (at 7%) and repays the forecast amount of government funding it will give the government $38.7bn over six years from FY2023 to FY2028. That’s $6.46bn per year.

    If the NBNCo skips the missed dividends, pays normal dividends from FY2023 to FY2028 (at 7%) and repays the forecast amount of government funding it will give the government $21.1bn over six years from FY2023 to FY2028. That’s $3.52bn per year.

    The free cash flow in FY2028 is $3.91bn. It’s not enough for either scenario is it. What have I got wrong here.

  5. “Turnbull’s statements are just not verifiable at this point.”

    This, in a nutshell, describes the entire situation with both the Liberal statements on the NBN, and on their own off/ on/ in/ out deployment plan.

    It’s typical political posturing. Slag off the opponents solution, lest your own be exposed for what it is.

  6. I continue to be amazed that a man of Turnbull’s obvious intelligence would continue to spout this nonsense – and with a straight face.

    This ‘they’re for it so we’re against it’ bollocks has to stop.

    It’s the low level that the Rabbit has dragged politics down to in this country.
    It’s juvenile, puerile and quite frankly bloody boring.

    Kinder gentler polity indeed, we’ll have to see about that later this year…

  7. “So they’re spending tens of billions of dollars on subsidising fixed line broadband to your home”.

    Actually Mr Turnbull, that’s what you’re suggesting in your policy…..

    Maybe that’s why this is the first time we’ve heard him call it like this, because he wants to make it seem like the NBN is along the the same lines as the Coalition plan in terms of funding, whereas, at the moment, we have no detail about how the LNP’s will be funded. They want to level the playing field for the funding of the NBN and their “policy” so that the average punter will go (for example) “$20 Billion from the LNP < $37.4 Billion from Labor….hmm, Coalition must be better then".

    Keep trying Mr Turnbull….you're tying yourself in tighter knots….

    • “Actually Mr Turnbull, that’s what you’re suggesting in your policy…”

      Exactly….you think he would be more careful about what he says.

  8. “a small percentage of Australians will connect using satellite or wireless solutions.

    … the subsidies there run into the tens of billions of dollars”

    So, under a coalition government we can safely assume that the country roll-out will be immediately halted since it could never ever get past a cost benefit analysis?

  9. The problem is that you reports keep publishing this FUD that Turnbull spins and no real questions are asked and answered.
    Maybe stop publishing his FUD and tell him we want answers to the questions before he will be published.

  10. The assertion that the NBN “will make a modest return” is only able to be made by excluding from the cost of the project the interest the government has had to pay to borrow the money to fund it. On one hand the government hands money to NBNCo which it calls an investment rather than an expenditure, on the other hand it borrows money that it wouldn’t have had to borrow if it wasn’t, but taxpayers get the bill for the interest on those borrowings not NBNCo.

    Even excluding that clear example of how the NBNCo business case is false and deceptive, the whole business case is based on assumption after assumption after assumption. Like you can ask ten economists and get 10 different answers about the future, you can get accounting firms who’ll sign off anything. How much they charge indicates how much work they had to do to make what you want to do seem like a good idea. And it cost the government $12M, wasn’t it, to buy the answer it wanted that a FTTH national broadband network would eventually make even the smallest profit.

    • @Gordon

      That’s a lovely story. However untrue.

      The total payment for the government for equity and interest is approximately $40 billion as at 2022. After that, every billion NBNCo. makes in profit (at $3-4 Billion a year) pays that off. Or alternatively they can sell NBNCo. And are you SERIOUSLY suggesting they won’t make $40 billion off that?? A company that is scheduled to make at LEAST $3-4 billion a year and RISING from 2022??? That’d be the bargain of the century….

      The charges NBNCo. are using are designed to provide a decent return while ensuring low retail prices. Which is EXACTLY what has happened.

      Are you going to tell me you think NBNCo. won’t make their return? Even based on the fact that their take up rates for tiers, even accounting for early adopters are WAY higher than predicted. And their total take up is guaranteed because of the Telstra deal. AND they are AHEAD on construction by 6 FSAMS???

    • Your actually incorrect on all levels and haven’t actually stated any factual evidence (other than FUD) to support your evidence (or lack of – not even evidence to support your FUD).

    • At current interest rates, now is the time to borrow money for a long term investment.

  11. Forecasts are not facts.

    Forecast –

    “a statement of what is judged likely to happen in the future, especially in connection with a particular situation, or the expected weather conditions”

    Fact –

    “something which is known to have happened or to exist, especially something for which proof exists, or about which there is information”

    http://dictionary.cambridge.org/

    In other words, facts are known things that have happened in the past, where as forecasts are predictions of what will likely happen in the future. A forecast only becomes a fact when the forecast event occurs. If the forecast event doesn’t occur, it was a forecast, and still can be referred to as a forecast, but is is not and will never be a fact.

    The NBN hasn’t yet made the long term returns forecast, so you cannot use those forecasts as though they were facts to justify your argument.

      • Tomorrow probably will be Sunday. It won’t be a fact that tomorrow is Sunday until it actually *is* Sunday. If the Sun explodes at 8pm tonight, then there won’t be a tomorrow to be a Sunday, and therefore the forecast won’t become a fact. If the Sun explodes tonight, that might instead turn today into Sunday.

        • But it is only in an extremely unlikely set of circumstances that tomorrow won’t be Sunday.

          My point is this. That while something in the future might not technically be a “fact”, that does not necessarily make it “untrue”.

          There are many people who frequent the Delimiter forums and comment threads who have been working in telecommunications for a long time, and like it is “pretty bloody likely” that tomorrow will be Sunday, these people are using the breadth of their experience to project “pretty bloody likely” outcomes towards the NBN.

          You might be quite correct to stickle over the dictionary definition of fact, but many things can be postulated with very high degrees of confidence.

        • All infrastructure builds are estimated and as such, I find it laughable that some single out the NBN.

          Of course no one (except blind, moronic critics) would expect every estimation to be exact… but they are a guide as to what we can expect…

      • Actually, speaking of Sunday, it just occurred to me that people who believe forecasts are facts are usually members of a religion, and depending on how vehemently they react to people questioning those apparent ‘facts’ is an indication of how blinded by the beliefs of the religion they are.

    • @Mark S

      Of course forecasts aren’t facts. Those who believe they are should be taking a course in basic English.

      However, when evidence becomes available that supports said forecasts, such as targets being met or exceeded then those forecasts become fact for the timeframe of the target AND it lends heavy weight that the following forecasts will be correct.

      For example, NBNCo. are ahead of scheduled FSAM deployment. I’m not talking about the ‘commenced or completed’ here, which you’ll undoubtedly say is a useless metric. I’m talking about FSAMs ACTUALLY FINISHED. According to their own predictions, they are 6 FSAMs ahead. This is easily seen by looking at Sept through Jan Monthly RFS reports. That lends weight to, but does not guarantee, NBNCo. meeting their June 2013 goal of 286 000 premises passed. If they meet THAT goal it lends VERY large weight to them meting the following years a targets of over 1 million passed. And so on.

      Forecasts increase in probability of being right to the point of being a practical certainty. That might not make them facts, but they might as well be.

      By the way, as Michael said, tomorrow is Sunday. That is fact. That is not a forecast. Whether tomorrow ITSELF will come, is a forecast. I’d say the odds of it coming are so close to 1:1 that whatever decimal place you used would essentially make it 1:1 anyway, so it may as well be fact, even if it isn’t. But it IS fact that tomorrow, IF it comes, is a Sunday.

      • Arguments over such semantics are intellectually dishonest. Yes, the words mean different things, so what? Very few things can ever be held to actually be ‘fact’ anyway. Even events that occurred in the past are not fact – they are held to be reasonable reports of those events consumate with the reliabile reputation of the reporting entity. Perception is fallible, memory even more so. Recording of events is only as good as the observational perspective, assumptions held and the lengths gone to to attempt to make the recordings both accurate and representative of the events independant of prejudice, perspective or observational error.

        All we can ever do is attempt to observe events as accurately as possible, attempt to repeat the observation for the same or similar situations, and then develop predictive models that attempt to explain the phenomenon. This is called science. You can’t dismiss the scientific method because of the possibility of inaccuracy – that is already built into the model, because all science accepts that every model can be broken if it fails to accurately predict outcomes for which it was designed (within the defined margin of error). This is precisely what helps science evolve and improve, and gives us the certainty for everything from scientific theory like quantum mechanics (which is moving further out of theory into observational science every day) to the engineering that the world’s development and infrastructure depend upon to operate.

        Again, attempting to assert that predictive models are equivalent to religious arguments is intellectually dishonest, and demonstrates your fundamental misunderstanding of the scientific process. In fact, not being able to accurately predict future events within a range of certainty through the use of models would throw us back into the dark ages, where no one but the clergy were allowed to claim the ability to predict future events and scientists and mathematicians who attempted to assert that the world existed within the framework of predictable, immutable laws were tortured and excommunicated or executed.

          • @Mark S

            Evidence such as they are currently meeting or exceeding their targets?

            And if they meet their June 2013 target? Is that evidence?

            Perhaps it is not us who are worshipping….

          • @seven_tech

            ‘Evidence such as they are currently meeting or exceeding their targets?

            And if they meet their June 2013 target? Is that evidence?’

            … and previous evidence of missed targets is ignored as being evidence at all, and if they miss the June 2013 target you will say that’s ok because they have said they will make it up in the next reporting period.

            So there never is ‘evidence’ at any point of time that is a constant.

          • @alain

            and previous evidence of missed targets is ignored as being evidence at all

            What evidence? Oh, that’s right, you’re talking about THE OLD CORPORATE PLAN. It is not valid. Why? Because the GOVERNMENT changed what NBNCo. had to do. You cannot fairly measure a companies success if someone ELSE changes the goal posts. No significant changes have been made since the last CP, so no significant adjustments should be made at the next one, only what NBNCo. learn through the rollout.

            and if they miss the June 2013 target you will say that’s ok because they have said they will make it up in the next reporting period.

            Did I say that? No. You are putting words in my mouth. NBNCo. are VERY much on track to reach their June 2013 goal and as long as they pass it or get VERY close to it, I see no reason to believe they won’t continue doing so.

            So there never is ‘evidence’ at any point of time that is a constant.

            If you respond to nothing else, respond to this- WHAT evidence would YOU consider acceptable? You talk of moving goal posts and changing numbers but you’ve NEVER stated what YOU think is acceptable. What IS acceptable alain?

          • Not only did the government change what Nbnco had to do but the striking of the Telstra and Optus deals also moved the goalposts, necessitating further design time and build time for the extra connections. That old corporate plan is a superseded document – the latest CP and the next ones deal with the network as it stands now, after those deals, and are the appropriate comparison to use, not the initial Plan.

          • I find it most ironic (I won’t say hypocritical) that a couple of dooms-dayers here, will argue that the NBN estimations are not factual and should basically be ignored…

            Yet, they expect NBNCo to nail their own estimated targets… or else?

          • Going by that logic nothing would ever be estimated and/or built.

            The evidence via analysis at hand suggests the NBN will be a success.

            The fact that you have absolutely no basis, estimations, projections and rely on some gut feeling/intuition/bias/voodoo or whatever it is for suggesting otherwise, is most telling, IMO, Mark S…

          • ‘The evidence via analysis at hand suggests the NBN will be a success.’

            The evidence in hand tells us nothing of the sort, taxpayer funding and NBN Co is predicted to be all paid back by 2033, the households passed and tardy active connection rate and lower than expected ARPU indicates success this far out?

            I am glad you are not my sharebroker.

          • Sharebroker…LOL

            This is an infrastructure build for Australians, not an out and out investment, purely to make money.

            The evidence via analysis at hand suggests the NBN will be a success.

            “The evidence in hand tells us nothing of the sort, taxpayer funding and NBN Co is predicted to be all paid back by 2033.”

            And that’s not successful…. LOL 2. Compare that to other government departments, areas, infrastructure.

            A state of the art network which will help all Aussies, fully repaid, making a modest return and a valuable asset for possible sale.

            Explain how this isn’t successful ;)

          • Taxpayer funding and debt is predicted to be paid back by 2033, which is interesting, how do you know you can pay it back by 2033 if you have not even negotiated any loans yet with known interest rates and payback terms and don’t intend to do so until 2015, and the regulatory framework changes to accommodate investor confidence in the network have not been approved yet?

            ‘NBN Co has stated plans to raise up to $13.4 billion of funding from debt markets over the next decade, lobbying for a lengthy regulatory framework in order to improve investor confidence in the network.’

            However, it has also said it plans to completely rely on government funding until at least 2015,’

            http://www.itnews.com.au/News/306316,nbn-committee-eyes-sooner-debt-funding.aspx

          • And again…

            A state of the art network which will help all Aussies, fully repaid, making a modest return and a valuable asset for possible sale.

            Explain how this isn’t successful ;)

          • Yes I thought you would avoid the direct question and go off on the let’s keep it generic and spout no meaning vague stuff like State of Art but you left out Nation Building and Bold and Visionary, they are always good fallbacks when the awkward questions are brought up.

      • Right, so in fact, the article should be titled, “Turnbull loose with forecasts on NBN finances”, but that would be much less controversial. These articles are always like this, treat forecasts as though they are facts, and then attack the target of the article as though they were disagreeing with hard facts. This is not truthful or accurate journalism.

        btw, why do you think you need to use CAPS to emphasis your points? Do you think I’m going to say “well I didn’t agree with what he said, but since he used CAPS, well, I must be wrong!”

        • @Mark S

          I use caps to emphasise for context. It’s easier than bolding all the time. I find the context of a sentence changes in text very much without emphasis. So I use caps to emphasise to add context. Sorry if it offends you, that’s just how I work. It has nothing to do with whether or not someone is wrong. I use it when agreeing with people too.

          The title of the article is correct- the “fact” in question is the idea that NBNCo. are receiving subsidies. It is a FACT that they are not. A GBE does not receive subsidies, because it is off-budget. Therefore, Mr Turnbull is incorrect or “lose with his facts” claiming they are getting subsidies.

          A GBE, contrary to popular opinion, does not have to make money to be off-budget. It would be stupid not to of course, but that doesn’t make it incorrect- as long as NBNCo. make SOME money (7% or otherwise) it is quite reasonable, responsible and normal to consider it off-budget. Off-budget is a non-technical accounting term that simply means it doesn’t show up under the general budget, but under the separate GBE budget. ALL monies are still accounted for.

  12. I honestly can’t get my head around what must be required for someone to be swallowing (even defending!) the Coalition’s position on this, particularly when they seem to have actually been following the subject fairly closely. The mental gymnasics involved are mind-boggling…

    As for the Turnbull’s statements, a huge part of this problem continues to be the quality of journalism – why are journalists with apparently little to no knowledge of the subject allowed to report on it? The only possible outcome is further confusion and misinformation to the general lay public. If Turnbull was held to account every time he made one of his false or misleading statements instead of further muddying the waters the public would see with increasing clarity the folly of allowing a dishonest LNP government to come to power.

    • Associating with good journalists tends to be like kryptonite to a politicians career.

      It easier to lie and bend the truth around those who you know are unlikely to question or point out said lies.

      • To ‘good’ journalists (however many of those there are left in Australia), it doesn’t matter whether a politician likes you or not. You are going to keep on reporting on them and holding them accountable, no matter what they do, no matter whether they talk to you or not, no matter what other journalists report. If I could sum up what I want politicians to think of me personally, I would want them to know that they can’t escape me, no matter what.

        Most other journalists seem to think political reporting is all about ‘access’. That is, you get in good with particular politicians or staffers so that they will give you info other journalists don’t get. This isn’t the way I see it. Having politicians think well of you can be useful, but in my experience politicians will love you as a journalist when you write nice things about you, and then damn you to hell when you write bad things and hold them to account (sometimes both in the same week). I’ve received annoyed calls from *all* sides of politics over the years — and I’ve received insider tip-offs from all sides of politics over the years. The only way to play this game is to remain impartial and consistent — no matter what the politicians do or say.

        • Is there pressure applied to journalists by editors and management to perform in this manner? Or is it just convenient for the reporters to be lazy? I take it most of them would be able to think of a few good questions if they tried.

          It helps show the value of sites such as delimiter, where tricky questions are asked, even if they aren’t often answered.

          It would be interesting to see if someone could establish a network/community of different news blogs which are known for their accuracy and integrity.

  13. Second rate electronic communications means more spent on roads and public transport which will always require a bottomless pit of subsidies. For example, CityRail’s farebox contributes 20% of the running costs of the network.

    It is far cheaper to move data closer to where people live than to move people. London is paying the price http://goo.gl/jW8tm. Australia is lucky to have the technology arrive at the right time to reduce the need for similar amounts of investment in expensive commuter infrastructure.

    It is disappointing Malcolm and his colleagues do not share the vision.

    • That’s fine Richard if you have firm evidence that is what actually taking place , the NBN Co type of FTTH rollout is not new either here or overseas, we don’t have to wait for NBN completion in 2025 to see if what you say is true.

      Have you any evidence that Greenfield estate residents or transACT cable residents in Canberra commute less than residents that are on ADSL2+ or HFC?

      • Alain

        Thanks for the Dorothy Dixer. I hoped it was obvious I was not talking about what IS taking place, but what can happen when the bandwidth limitations (up and down) on really exploiting the Cloud are removed. For example, remember when the stock exchange was based on open outcry requiring stock brokers to locate near the stock exchanges? Remember when poste restante was an important service at the Sydney GPO now no longer occupying much of 1 Martin Place? You may not have spent much time as an articled clerk searching documents at the Companies Office, the Land Titles Office and the Courts and the DX. This resulted in legal offices clustering nearby; the need is passing. Have you noticed the difference the internet is making to the retail scene?

        “Teleworking” and thinking about teleworking are in their infancy. The need for people to cluster together in the confines of a crowded CBD are becoming less as communications improve and the digitisation revolution progresses. As I wrote, it just needs some vision.

        • Oh so it’s something that might happen as distinct from it will happen, I remember having similar discussions when NBN FTTH was announced originally with all the pie in the sky predictions on what it would do for a small business like Digital Photo Labs operated from home, I asked the same question then, about evidence of all the Digital Photo Labs springing up all over in Greenfield estates in residents garages that have had FTTH for years, once again it is something that is always ‘coming’, it’s like the pot of gold at the end of the rainbow, it’s always there but you never get to it.

          ‘Have you noticed the difference the internet is making to the retail scene?’

          If you mean on-line shopping is causing shop front retailers grief, yes I have noticed that, but then a 3G connection on my iPad or a Samsung S3 (just to keep the iOS vs Android balance) is a major cause of that.

          • And you are saying the changes we have seen over the last ten years to banking, stockbroking, media, education, retailing, call centres etc., are now at an end and ubiquitous reliable high speed bandwidth will make no difference to how the country functions during the expected life of the NBN?

            Why do you limit the discussion to “Digital photo labs”? Do they comprise the whole economy?

          • The changes we have seen that you have mentioned have nothing to do with the residential NBN rollout as such, you are referring to corporate and business grade fibre connections based on extensive high speed and high capacity fibre loops in commercial CBD centres of our biggest cities which are still being extended and enhanced from a number of private firms providing those services, which may also include server capacity in secure environments.

            There is also third party fibre backhaul capacity to Telstra exchanges which most ISP’s that have their own exchange based DSLAM’s make use of and of course the ever increasing need for extra fibre connection to wireless towers of the three private providers, all of the above is in place NOW it is not waiting for the NBN Co to provide it.

            Digital Photo labs is just one example which was not my example in the first instance anyway, it was promoted as a benefit of FTTH, if you have other examples that proves that FTTH benefits small business in terms of promoting decentralisation in the economy or curtails the masses from commuting into the CBD everyday both of which are large enough to be statistically significant I for one would be glad to see it.

            What also would be interesting to know is why FTTN will not be suitable in providing those benefits if and when they come.

          • As Australian internet speeds fall to 40th place globally http://goo.gl/jB79R, you assure us our infrastructure is just fine. So why are you even assuming FTTN should remain on the table? Why bother doing anything especially since nearly everyone here (except you) sees FTTN costing more in the long run.

            As to Digital Photo Labs being the only or preferred use for a fibre network, wouldn’t ubiquitous fibre mean freedom from the lunacy that require rail and road infrastructure to be designed and staffed around peak hour use. You insist we should know NOW how the network can be used over the next 50+ years. Did you predict the success of the iPad, for example? Did you foresee 640K RAM was not enough? And when it would cease being enough? Should the RMIT research http://goo.gl/s5Ifn be taken further or is that a waste of money too?

            Would the ideal not be for office workers to move seamlessly from their homes to their offices and having virtually all the same resources at both ends of their journey so they can move from one to the other at any time of the day? Or not at all? Digital Photo labs might even be a reduced force in the land by then; photo albums are so heavy, amongst their other shortcomings.

          • ‘As Australian internet speeds fall to 40th place globally http://goo.gl/jB79R, you assure us our infrastructure is just fine.’

            The fact we are 40th means what exactly? -our economy is in worst shape than the 39 countries above us, is there some sort of direct relationship between BB speed and the health of the economy, standard of living, unemployment rates, health care and average income for example?

            ‘As to Digital Photo Labs being the only or preferred use for a fibre network, wouldn’t ubiquitous fibre mean freedom from the lunacy that require rail and road infrastructure to be designed and staffed around peak hour use.’

            Yes but I asked you this question before, what evidence is there that FTTH, or even ADSL2+ or FTTN or HFC for that matter has any effect whatever upon rail and road infrastructure use, was it statistically significant in the move from Dial-up internet to ADSL1 and ADSL2+? – and how do you measure this and categorically say that’s because xx country has a high percentage of FTTH.

            ‘Would the ideal not be for office workers to move seamlessly from their homes to their offices and having virtually all the same resources at both ends of their journey so they can move from one to the other at any time of the day?’

            Well they can do that now, what is significant about FTTH that will accelerate this trend, most office interaction work is low bandwidth stuff, emails, word processing, interacting with Corporate servers on a VPN on reporting etc.

          • “The fact we are 40th means what exactly? -our economy is in worst shape than the 39 countries above us, is there some sort of direct relationship between BB speed and the health of the economy, standard of living, unemployment rates, health care and average income for example?”

            It is far more likely to mean internet usage is finding its way further into the suburban and country wilderness beyond proximity to telephone exchanges and/or the rest of the world is improving their networks faster than we are.

            I answered the question before by saying I don’t have to specify applications now, but allude to those likely to become available in the next 18,000 days (50 years). The sooner the infrastructure exists, the sooner these new applications (and more importantly. work practices) will appear and be adopted. As to the present need, I’m not talking about MOST office interaction work, I’m talking about the next tier of such interaction — the bit that means thousands of people spending too much of their productive lives in tedious commuting because current infrastructure does not permit it.

            That would be for workers to have the same virtual access to their colleagues, company resources and (paper) contents of their offices at home (or anywhere else) and sometimes even their customers at the same speed that they have have when in the workplace itself. You won’t do http://goo.gl/kahOJ without better speeds in both directions.

            FTTN is off the table as far as the rest of us are concerned for reasons explained ad nauseam. And HFC is less then ubiquitous so what is the point of continuing to refer to it?

            What makes me think you know all this already?

  14. The premise of the article is not really correct. Just because there will be a small return on investment doesn’t mean Turnbull is misleading in saying billions of dollars haven’t been wasted. If there is an option that delivers the same result with a greater financial return, then Turnbull’s comments are correct. The opportunity cost could be tens of billions of dollars, and therefore wasted money.

    Not saying the NBN is right one way or the other, but I hate misleading reporting.

    • Seriously…

      Are we nit picking, clutching at straws or what here, c’mon…?

      If it makes a return and is state of the art and won’t need upgrading in the foreseeable future, there is no waste.

      Especially when the alternative FttN may cost less initially but isn’t necessarily a path to FttP and needs to be upgraded, as it will, then that is more akin wastage, imo.

    • so far, no-one has articulated what an “option that delivers the same result with a greater financial return” looks like. i know there are those who will not agree but so far no FTTN options explored are cheaper unless you drastically change the terms – cutting it back to major metro only, for instance, and merely sticking with the already sunk cost of the fixed wireless and satellite options.

      its not even just a stake costs issue but also a time issue – particularly with respect to a pause, CBA, reneg of agreements and redoing the network design to fit a FTTN build, as well as possible hangups WRT the Cabinets themselves. if just nutting that lot out costs the coalition most of a three year term, it could be 4-5 years to get a rejigged build back up to anything like the 6000 premises per day peak rollout – remember it took time for NBNco to get to where they are now – at worst case the build could effectively just be getting restarted 2016-2017. given part of the coalition mantra is “faster” i think the whole focus on an “option that delivers the same result with a greater financial return” is partially misplaced, time must be considered as well.

      I also note if the Coalition policy does take that long to get off the ground the suitability of FTTN as the underpinning of the fixed line services becomes even more dubious, at best. in raw network speed terms. a network with no headroom is going to be a harder sell to the public, who have shown little tolerance for congestion and slow networks – witness Vodafail – and to my mind puts ‘greater financial return’ for that option past ‘dubious’ into ‘not creditable’ territory.

      but if someone can truly articulate such an alternate option im all ears. im not averse to a FTTN option, if it can be shown to tick all the boxes. so far all ive heard is “does too!” and nothing of the how. if there is something superior to the FTTH plan already articulated it must be that – faster – either but preferably both in build and net speed, cheaper – both in toto and in terms of a following upgrade which everyone agrees will eventually be needed, and better for the nation – however you like to define that, tho the 93% fixed line coverage is one good marker.

  15. Nonny-Moose makes some good points, and reminds me that there is a simple argument that LNP & its supporters never address – fiber-optic cable is the fastest communications technology in existence with the greatest bandwidth, particularly when you consider the cable volume. There is not even a theoretical technology that surpasses it. It is so fast, it is several orders of magnitude faster than copper cable. The moment you introduce another medium, you are immediately limited by the speed and bandwidth of the slowest technology. So end-to-end fibre is unbeatable as a forward-looking communications technology.

    In terms of deploying a network, you have to satisfy cost efficiency considerations. So how expensive is optic-fiber compared with competing technologies, how long will it take to roll out, and what will the comparitive performance be?

    In other countries, FTTN is substantially cheaper because there is zero cost to access the existing copper network. This only applies here if Telstra are creating such a network. As a key target of the new communications network is elimination of a multilayer monopoly, Telstra aren’t and cannot be responsible for building the network. That means FTTH is not substantially more expensive than a FTTN deployment in Australia. When you also consider the cost of halting or changing the NBN at this stage, the idea that it could even be considered seems ludicrous – the deployment will then take longer than the fiber-optic FTTH NBN, it will be more expensive all told, the majority of the costs will be subsidies to private companies that won’t generate any profit for tax payers, because it will be owned by unregulate private industry it will cost consumers more to access, it will cost more to maintain, it will be more prone to faults and performance degradation, it will cost substantially more to upgrade and, critically, it will be an order of magnitude slower. The fact that anyone thinks there is even a discuasion to be had on the subject seems illogical to the point of insanity to me…

    • @Trevor

      ‘The moment you introduce another medium, you are immediately limited by the speed and bandwidth of the slowest technology. So end-to-end fibre is unbeatable as a forward-looking communications technology.’

      If the technology is so ‘unbeatable’ why does the ADSL and HFC networks need to be shut down to ensure everyone is forced to use it?

      ‘In other countries, FTTN is substantially cheaper because there is zero cost to access the existing copper network.’

      Why is their zero cost overseas but it is costs in Australia, are overseas copper infrastructure owners giving it away for free? – jeez that’s very charitable of them.

      ‘This only applies here if Telstra are creating such a network. ‘

      We don’t know that.

      ‘As a key target of the new communications network is elimination of a multilayer monopoly, Telstra aren’t and cannot be responsible for building the network.’

      We don’t know if Telstra are building the new network or even end up owning it.

      ‘because it will be owned by unregulate private industry ‘

      Oh here we again with yet another poster that forgets the ACCC that is the monopoly infrastructure regulator exists, and I repeat we don’t know what the ownership structure of a Coalition infrastructure will be other than it will be a private/ Government partnership, the ratios are unknown.

      ‘The fact that anyone thinks there is even a discuasion to be had on the subject seems illogical to the point of insanity to me…’

      You made a lot of illogical and incorrect points to get you to that conclusion, I guess that means we continue a sane discussion as usual.

      • Do you like going around and around in circle. All this stuff has been answer when you have asked over and over and you just go in circles.

        “If the technology is so ‘unbeatable’ why does the ADSL and HFC networks need to be shut down to ensure everyone is forced to use it?”

        To speed up return on investment and reduce the cost of maintaining an obsolete technology.

        “Why is their zero cost overseas but it is costs in Australia, are overseas copper infrastructure owners giving it away for free? – jeez that’s very charitable of them.”

        Because overseas the FTTN networks were rolled out and owned by the owner of the copper while being paid subsidies by the government. Zero return to the government monopolies maintained. To do it here and break the Telstra vertical monopoly and create an asset buying the copper would be necessary unless you want to entrech the Telstra vertical monopoly for another 20 years.

        “We don’t know that.”
        Yes, Telstra may give the copper away and pigs might fly. You don’t believe what you type I hope?

        “We don’t know if Telstra are building the new network or even end up owning it.”
        So which way is it? Are we buying the copper off them or are they building the network. Your give away option is pure fantasy.

        “Oh here we again with yet another poster that forgets the ACCC that is the monopoly infrastructure regulator exists”
        And they have been so sucessful regulating Telstra. Even regulated Telstra was offering retail pricing below whole pricing to other. Does that sound like they can really control them?

        “You made a lot of illogical and incorrect points to get you to that conclusion, I guess that means we continue a sane discussion as usual.”
        Seems to me you just run around in tighter and tighter little circles until someone gets sick of your crap and refuses to play your dumb game.

        • “To speed up return on investment and reduce the cost of maintaining an obsolete technology.”

          Nailed it.

          • To speed up return on investment

            Does that include or exclude the billions paid to Telstra and Optus to help speed up that ROI?

            ‘ and reduce the cost of maintaining an obsolete technology.”’

            That’s good to hear, because if the Coalition plan ever gets implemented Telstra will hand over the copper runs from the FTTN cabinet to the residence for free, it is obsolete ,it has no value.

          • @ alain…

            “That’s good to hear, because if the Coalition plan ever gets implemented Telstra will hand over the copper runs from the FTTN cabinet to the residence for free, it is obsolete ,it has no value.”

            Wow who needs a CBA or Biz plan with such adult estimations and rationality :/ Nice straw-man too, no one said it was of no value.

            Seriously, this is an evidence based forum, where I am sure every single poster, except one, can at least accept that copper technology for broadband use, is obsolete (err again, obsolete doesn’t mean of no value)?

            Obsolete – “Outmoded in design, style, or construction”.

            Please if we are going to debate the issues, at least do so on an adult level and on the actuals. I.e. sans the childish, nit picking bullshit and without left of field straw-man arguments.

            Thank you have a nice P/H.

          • FUNNY
            Promotes competition and the Free Market yet fais completely to understand the concept of supply and demand.
            The more something is essential and limited in supply the higher the price

          • Stop your whining. Your ill-informed input was not requested nor is it required in this debate.

        • ‘Because overseas the FTTN networks were rolled out and owned by the owner of the copper while being paid subsidies by the government’

          Which particular overseas FTTN networks are you referring to here, I want to research the ‘subsides paid to them by the Government’ assertion, or have you already done that?

          ‘ To do it here and break the Telstra vertical monopoly and create an asset buying the copper would be necessary unless you want to entrech the Telstra vertical monopoly for another 20 years.’

          Telstra has the vertical monopoly broken already, it was operationally separated by the Howard Government in June 2006 and now structurally separated by Conroy, it is not possible for them to have a vertical monopoly for the next 20 years irrespective of who wins power at the next election.

          ‘So which way is it? Are we buying the copper off them or are they building the network. Your give away option is pure fantasy.’

          Sorry you are confusing me with the author of all Coalition Policy, I was only stating it is a unknown to the poster who asserted it WOULD be Telstra owned and Telstra built.

          ‘And they have been so sucessful regulating Telstra. Even regulated Telstra was offering retail pricing below whole pricing to other. Does that sound like they can really control them?’

          … . and they were fined by the ACCC for doing that which lead to large reductions in Telstra ADSL wholesale pricing to ISP’s, and they never did it again, so yeah it does sound like they can really control them actually

      • They don’t ‘have to be shut down’ in a basic sense. But Telstra and Optus negotiated an agreement to turn their customers over to a better network than they currently run, operated and maintained by another party. They have less work to do to serve their customers as a result and can turn their focus to other things instead of operations and maintenance. I don’t know about you but I would take that deal, if the choice was to run my network in parallel or buy in. Its not such an unbelievable proposition as you seem to think it is.

        Yes paying them to throw their lot in is silly and yes its altogether possible to run two networks concurrently in a physical sense. As as business sense tho, if the network is superior, there’s not much sense in doing that unless you want to drastically cut income to compete I.e. price war it. Optus wouldn’t have the money without going to Singapore and Telstra won’t want to forego its dividends, which make it look good to investors. Seems a pretty logical outcome to me.

        • ‘ But Telstra and Optus negotiated an agreement to turn their customers over to a better network than they currently run, operated and maintained by another party. They have less work to do to serve their customers as a result and can turn their focus to other things instead of operations and maintenance.’

          Yes I know how the agreement works, I have a copy of the 168 page Telstra Explanatory Memorandum booklet detailing the agreement clause by clause and have read it all, and know exactly what needs to happen in terms of the NBN rollout premises passed before a designated area will have exchange access turned off.

          ‘ I don’t know about you but I would take that deal, if the choice was to run my network in parallel or buy in. Its not such an unbelievable proposition as you seem to think it is.’

          Yes but the choice as you put it is all about the $$$ being thrown their way, you think the Telstra shareholders would have approved the deal if there was no $11 billion going into Telstra coffers and then eventually shareholder dividends?

          What’s ludicrous is that the Telstra HFC is being left active and maintained for FOXTEL, you just cannot use it for BB, so they are switching off a working 100Mbs service (in designated areas) so cable residents are forced to use the NBN 100Mbps service, so existing FOXTEL cable subscribers have two line runs to the house.

          • alain
            ” so cable residents are forced to use the NBN 100Mbps service, so existing FOXTEL cable subscribers have two line runs to the house.”

            As they do at this time, HFC for Foxtel (what it was designed and built for) and B/B PLUS copper pairs for telephone which will be replaced by the fibre

      • All I’ve seen alain assert is that he doesn’t know very much, especially about what might or will happen in the future. I agree with him.

        • I think it is more accurate to say he has seen the future and it is exactly the same as the present. No changes. Ever. Or certainly not until all the fibre has rotted in the ground.

          • It’s never that black and white, as in you either support the Labor NBN Co rollout or if you don’t it means you want to keep what we have forever, and I think you meant ‘all the copper has rotted in the ground’. :)

    • Not only that but also the old “awaiting Moderation” in play on his trusty site

  16. The NBN will start making money and the then Government will decide to sell it off, and pocket the money. All of the assets that have been sold like Telstra should have been kept as they are owned by us – we the people.

    • Yeah, this is something I have never understood.

      Governments exist for the public good, not private interests.

      So why do governments so often take the side of private interests? Copyright law is one instance. It used to be a temporary monopoly given to creators before it entered the public domain, but now it is held (sometimes, it seems, almost in spite) by mere distributors (publishers) long after the creators themselves have gone defunct (or died).

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