The Frustrated State: How terrible tech policy is deterring digital Australia
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Opinion, Telecommunications - Written by Renai LeMay on Tuesday, April 16, 2013 12:12 - 394 Comments
The Coalition’s policy is a sensible NBN alternative
opinion The Coalition’s rival policy is a sensible alternative to Labor’s National Broadband Network project, based soundly on its traditional principles of liberalism and support for the free market, but also pragmatically taking into account the situation which the the current Federal Government will leave the Coalition with if it takes power in September.
Shortly after Opposition Leader Tony Abbott handed Malcolm Turnbull responsibility for the communications portfolio in September 2010, the Member for Wentworth called in about a dozen of Australia’s leading technology journalists for a private chat at his electorate office in Edgecliff. The point of the exercise, as I understood it at the time, was for Turnbull to achieve a degree of familiarity with key members of the press who would be covering his statements over the succeeding years in his new capacity as Shadow Communications Minister.
A more diplomatic journalist than myself (and there were indeed several such there at the time) might have cut the former Opposition Leader some slack on the day. On such informal occasions, it is perhaps the usual practice to take a more gentle, more practical approach. After all, this kind of situation usually represents nothing more than the chance to establish some level of rapport with a figure who will be key to your work in the imminent future, and there will, of course, be many opportunities to question them about relevant issues on subsequent occasions.
However, this wasn’t my approach on the day. To be blunt, I hammered Turnbull on the issue of the NBN. My question at that point to Turnbull (which I repeated several times; considering myself and my readers to be dissatisfied with his answers) went along these lines:
“How could a Coalition Government possibly consider halting the rollout of the NBN after the next Federal Election, given that by that time the rollout of the NBN’s fibre infrastructure would be in progress at several million premises throughout Australia?”
The Liberal MP’s answer at the time was to reject the idea that it was fruitless for the Coalition to oppose the NBN at that point, with fibre currently being rolled out around the nation. “The idea that we should just wave it through, because it’s politicially expedient, I mean — I wasn’t elected to Parliament to just look the other way when billions of dollars are potentially being wasted,” he said. In addition, Turnbull argued for the need for additional transparency into the NBN project and NBN Co itself.
“I’m not seeking to wreck or destroy … my objective is to get some real transparency and accountability on this,” he said. “We need to have a more informed debate about it, the Government is talking about spending a really stupendous amount of money, and our job in the opposition is to hold them account to that.” Asked whether he thought it was politically dangerous for the Coalition to frame the NBN debate in financial terms, Turnbull questioned what other way it should be framed — given the obvious technical supremacy of fibre-optic cable over other broadband solutions.
At the time, with public sentiment for the NBN still riding high 18 months after then-Prime Minister Kevin Rudd first announced the Government would spend $43 billion rolling out fibre to almost every Australian premise, Turnbull’s answers seemed somewhat ludicrous. The Coalition had only months before that date produced a rival broadband policy for the 2010 Federal Election which had been laughably inadequate in scope, and the triumph of Labor’s ubiquitous fibre vision seemed inevitable. Along the way, many commentators guessed, the public would get a chance to laugh at the Coalition’s technological ineptness further, as it did during Abbott’s poor showing in the field during the election.
Few could forget, at that stage, Abbott’s words on the 7:30 Report, when questioned by host Kerry O’Brien about the Coalition’s broadband policy. “I’m no Bill Gates,” he said. No kidding.
But all jokes aside, it must have been hideously apparent to Turnbull even at that early juncture that he had been handed somewhat of a poisoned chalice by his erstwhile rival for the Liberal leadership. To oppose the NBN, Turnbull would have realised, would mean not only going up against an extremely popular Government policy — one which the Liberal Party’s own research had shown was instrumental in causing the election stalemate and helped lose it power, after independents like Rob Oakeshott cited it as a critical factor in backing Labor for government — but also one which would place the technologically adept Turnbull on the wrong side of the fence: Opposing innovation, trying to stop progress; halting new ideas in their tracks.
At the core of the issue for Turnbull was still that same question which I had hammered the Member for Wentworth with when he took the portfolio up: What would the Coalition do, if Labor succeeded in deploying the NBN to millions of premises by the time the next Federal Election came along?
As it turns out, Turnbull does not need to answer that question.
You can argue the reasons for the current situation with the NBN forever — and God knows it’s always going to be a hot issue amongst the Australian public. You can argue that it was reasonable for the rollout of the NBN to be delayed because of NBN Co’s need to achieve a satisfactory outcome from its extremely complex negotiations with Telstra. You can argue that it was reasonable for the NBN to be delayed because the scope of its responsibilities was changed substantially as it took on responsibility for greenfields developments. You can argue that its latest three month rollout delay was reasonable, because it’s only a small, almost expected blip in a ten-year project. You can argue that its ongoing issues with its construction partners should also have been expected in a project of this magnitude. And in fact, I have argued for all of these concept.
However, what you can’t argue with is the fact that the current Labor Federal Government has been in power long enough — almost six years, by the time the September election rolls around — that it should have been able to complete enough work on its NBN project to make it irrevocable at this time.
In Australia’s Federal political system, it can be reasonably predicted that when a new government takes power after a long period in opposition, such as happened when Kevin Rudd took the reins from John Howard in 2007, that that new government will have at least two terms to implement its policies. The Australian electorate is willing to give politicians that chance to show us what they’re made of.
If I can put it this bluntly, Labor has had its chance to demonstrate that it can deliver on national broadband policy, and it has flubbed it. Realistically, if you can’t do more than finish deploying a couple of hundred thousand premises with fibre in six years in office, there is no reason for the electorate to give you another three years to rectify your mistakes.
Now, let me cut off the bitter criticism which many, many, readers are about to start flinging my way in the comments underneath this article. Yes: I know there are reasons for the current situation. Don’t you think that I, of all people, who has detailed the ins and outs of this project for most of the past decade, know those reasons? Of course Labor had to have its initial fibre to the node policy investigated from 2007 through 2009, and that took time. The NBN is a decade-long infrastructure project, and it takes time to get off the ground and ramp-up into its main rollout period. Yes, I know the delays have been reasonable from a project governance perspective, and yes, I know that fibre is the right technical solution for Australia’s broadband needs. I know all of this.
But there’s also a political reality here; a reality that politicians of all backgrounds in all of Australia’s political environments acknowledge: That once a government (state, Federal or even local council) takes power, they have a limited time to enact their policies, or at least implement them to the point where they cannot easily be rolled back by political opponents.
Labor, with its NBN project, has largely failed this test. There have been reasons, yes, but the truth is inescapable, that it has failed.
In this context, the alternative NBN policy which the Coalition unveiled last week is precisely the policy which a party composed of conservatives (such as Abbott) and traditional liberals (such as Turnbull) should take to an election to oppose Labor’s traditional social welfare-oriented approach.
As Turnbull rightly said last week, the Coalition can no longer simply walk away from the NBN. The superstructure of this project, involving the company of NBN Co itself, industry restructuring through its deal with Telstra and rural support through satellite and wireless, is all there now. For the Coalition to pull this comforting rug out from under the feet of the Australian public at this point would be ludicrous, and the general outcry would be stupendous.
More than that, of course, is the greater issue that Australia’s telecommunications industry does not have a sustainable model for investing in upgrading its infrastructure at the moment, due to the ongoing regulatory uncertainty created by both sides of politics in this area. This issue must be addressed by a future Coalition Government; that is, after all, the Government’s fundamental role in a capitalist social democracy such as Australia enjoys: To provide stable underpinnings for the market to operate, and to prop up services in areas where it is not sustainable for the market to do so itself.
And yet, for an Opposition dominated by a Liberal Party founded on traditional liberalist values of small government, support for free enterprise and individual endeavour to simply support the NBN as it stands — with the project broadly failing to deliver on its aims and spending billions of dollars in government funding along the way — would be absurd, as anyone who understands the fundamental philosophical differences between the socialist and liberalist ideologies would openly acknowledge.
Australia’s technology sector can bluster all it likes about fibre to the premise being the future and Tony Abbott being a luddite — and we’ve certainly seen plenty of that over the past week under the amusingly naive #fraudband hashtag — but there is no escaping this fundamental truth: That a Coalition founded on liberalism would never organically develop the sort of big-spending fibre to every premise policy which Labor published in April 2009. That is the role of Labor — not the economically conservative other side of politics.
Understanding these home truths, nothing in the Coalition’s policy released last week should come as a surprise to observers. The policy merely pragmatically retains the immutable bones of Labor’s vision, while aiming to transform it to deliver on its aims in a more economically rational way. And of course, the charismatic Turnbull has found a way to promise to deliver the policy faster and in a way that leaves future technological upgrades open to cashed-up private citizens and businesses, as well as the government itself, in the really long-term.
And unlike Labor, the Coalition is clearly aware that it may have only two terms in power to implement its policy. That’s why Turnbull last week clearly articulated two sets of three year goals for the Coalition’s NBN rollout. Turnbull has also resolved a number of the ongoing chaotic issues which had plagued his policy over the past few months and has managed to get the Shadow Cabinet and Abbott personally staunchly behind and understanding the policy.
If Labor had been able to deliver on its promises with the NBN, and even something like half a million Australian premises were already covered by the NBN’s fibre, then the Coalition’s rival policy simply could not exist. However in the absence of such project success, the Coalition’s approach is targeted precisely at Labor’s policy gaps, wrapped in the gleaming chrome marketing machine of Turnbull’s personal intellectualism and credibility with the electorate. Last week, the policy presentation by Turnbull and Abbott in Sydney was convincing and polished, and both were clearly singing the same tune; which hasn’t always been the case in the past. You all know that I have been a long-term critic of the Coalition’s NBN policy and Turnbull personally. If I found its launch largely convincing, then I have no doubt that many others will eventually come around as well, when exposed to it up close.
So, do I personally prefer the Coalition’s policy?
No. I don’t. Fundamentally, it’s a worse policy than Labor’s. Its critics are right; it betrays a tragic loss of long-term vision for Australia’s telecommunications infrastructure. Fibre to the node is a dead-end technology which will, in several decades, be already fading into memory. By investing in fibre to the node, the Coalition isn’t skating to where the puck is going to be, nor even where it is now. It is looking backwards, not forwards, and by doing so it is throwing away the opportunity for Australia’s economy to transition from digging things up out of the ground to a more sustainable knowledge-based export economy — you know, the kind of economy which countries such as Germany and Japan already have.
Then too, the economics of the Coalition’s policy are questionable. Its claim that Labor’s NBN vision will cost $94 billion is, even by research conducted by Turnbull’s own office, not backed by evidence, and as Turnbull himself has admitted, it is possible that the Coalition’s policy will even up costing as much as Labor’s in the long-run.
Plus, there’s the simple fact that the Government has a decent deal with Telstra right now to shut down its copper network; and I wouldn’t trust Telstra for a single second not to bend a future Coalition Government over a barrel to charge it through the neck for re-negotiating its extensive contract with NBN Co. There’s no arguing with a company the size of Telstra, which has historically produced enough legal work to keep law firms like Mallesons in caviar for decades.
On almost any measure, Labor’s policy is a better one than the Coalition’s. It has technical, economic, financial and industry structure advantages, to say nothing of the end benefit to Australian residents and businesses. It’s a winner and I prefer it vastly over the Coalition’s much more modest vision.
But the Coalition’s policy is not a bad policy, or even a neutral policy. It is a good policy, and fundamentally sound as pre-election policies go; considered, researched, very detailed, and backed by an informed and well-educated Shadow Minister on op of the nuances of his portfolio. It maintains the bones of Labor’s policy and will deliver on many of its aims, while offering the potential to be more financially astute and delivered more quickly; and it will maintain infrastructure competition in some areas due to the continued existence of the HFC cable networks. Your writer has always argued that the shutdown of the HFC cable networks — and the huge payouts to Telstra and Optus that were to result from the move — was highly anti-competitive, and even the ACCC had severe misgivings about the idea.
From my perspective, although I know many Australians, including myself, will be disappointed by the Coalition’s vision in this area, I would encourage readers to recall where we’ve come from. Up until May 2007, neither side of politics had a workable broadband policy that would resolve once and for all the infrastructure deadlock which Telstra and its cluster of competitors found themselves in. At that stage, Labor’s then-$4.7 billion NBN plan to build fibre to the node nationally was seen as a watershed moment. Funny how it’s not too different from what the Coalition is proposing today.
Fast forward six years and in 2013, both sides of politics have ambitious visions to spend tens of billions on broadband infrastructure to serve the needs of Australia’s population today and for the future. The two plans retain many common elements but also, fittingly, represent differing political philosophies, and to say Australians would be incredibly better off under either than they are today would be a collossal understatement.
Many Australians have spent the past week protesting loudly in every direction about how terrible the Coalition’s NBN policy is. But I prefer to see it as it is: A sensible, liberalist alternative to Labor’s NBN and precisely, as Turnbull has been saying for some time, what we should have expected from the conservative side of politics.
None of this, of course, will stop me or others from holding Turnbull, Abbott and company to strict account for delivering on their alternative NBN vision after September. Stephen Conroy will remember how much fun it was to bathe daily in the fire of public opinion over the years from 2007 when Labor was determined to implement its unpopular Internet filtering policy. If the Coalition fails to deliver on its NBN vision to the same extent that Labor has, there will be hell to pay, and I will personally be lining up to rip the Earl of Wentworth a new one. But then, given how we began our relationship, I would bet that he would expect nothing less.
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