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News, Telecommunications - Written by Renai LeMay on Wednesday, June 12, 2013 15:21 - 150 Comments
Coalition NBN completed ‘six years faster':
False claims from Liberal MP
news A Queensland Liberal MP who has been described as a “Malcolm Turnbull lieutenant” and a long-time critic of Labor’s popular National Broadband Network policy has written a controversial letter to his constituents making a number of false claims about the project, including the claim that the Coalition’s version could be completed “six years earlier”.
According to the letter seen by Delimiter (click right to see a large version), Steven Ciobo wrote to constituents in early June this year on the issue. The MP’s electorate of Moncrieff contains areas such as Surfers Paradise and the Gold Coast. “Access to fast broadband is no longer a want — it is rapidly becoming a need for Gold Coast households and businesses,” Ciobo wrote. “The National Broadband Network sounds promising when you read the headlines, however the reality for you is quite different.”
Ciobo told constituents that in their neighbourhood, NBN Co’s rollout website currently showed “no planned rollout”. “This means there will be no NBN or any broadband improvements in your neighbourhood for at least three years,” he wrote.
The Liberal MP added that when Labor first announced the NBN in 2007, it had said the project would be completed in by 2013 at a cost of around $4.7 billion. “Since then, Labor changed the forecast and said it would cost taxpayers $37 billion and be completed by 2021,” Ciobo added. “Now we know it is actually going to cost taxpayers around $94 billion and won’t be completed until 2025.” Ciobo wrote that Labor was “wasting even more taxpayers’ money by building over existing fast broadband networks like cable”, but was leaving many areas of the Gold Coast “without any service at all or with very limited speed”.
Under the Coalition’s rival proposal, Ciobo wrote, areas on the Gold Coast “like your suburb” with “the poorest broadband” would receive priority. “The Coalition plan will see the National Broadband Network completed six years earlier than Labor’s NBN, with monthly prices projected to be 29 percent cheaper, with minimum download speeds of 25Mbps, rising to 50Mbps by 2019,” he wrote. “Importantly, the Coalition’s plan will save taxpayers over $60 billion dollars.”
There are elements of truth to some of Ciobo’s statements to constituents. For example, it is true that many areas of Australia, including on the Gold Coast, are not slated to see network improvements under the NBN over the next three years, as the project under Labor will take much of the next decade to complete. In addition, Labor’s NBN project will see existing HFC cable networks shut down, and Labor did reform the project in 2010 from a $4.7 billion fibre to the node vision in cooperation with industry, to a $43 billion fibre to the premises project conducted by the Government alone.
However, other elements of Ciobo’s letter are demonstrably inaccurate, delivered without context, or could be considered highly contestable, in that they do not represent mainstream thinking in the telecommunications industry from the consensus of expert opinion.
For example, currrent projections place the cost of Labor’s NBN vision at around $40 billion, rather than the $94 billion Ciobo mentions. The only source of the $94 billion claim is the Coalition’s background briefing policy document on the NBN (PDF), which claims the real cost could be up to $94 billion.
In the document, the $94 billion figure represents a case where multiple variables go wrong. The Coalition states that for the $94 billion figure to eventuate, a number of conditions must all be met simultaneously: NBN Co’s revenue must grow much slower than currently forecast, construction costs must be significantly higher than currently forecast, more households must pick wireless alternatives than is currently forecast, and the NBN must take 50 per cent longer to build (an extra five years) than currently forecast. In addition, the Coalition’s policy document also contains a range of other estimates for the cost of Labor’s NBN, starting at around $45 billion and ranging upwards. The figure is not regarded as credible by the bulk of commentators on the NBN.
Secondly, it is debatable whether the NBN will in fact “cost taxpayers” anything. NBN Co’s current projections (PDF) show that the project will in fact make a return on investment of about 7.1 percent over the long-term, repaying the Government’s investments in NBN Co and them some. Shadow Communications Minister Malcolm Turnbull has stated that he expects the Coalition’s version of the NBN, which predominantly uses fibre to the node technology rather than the more pervasive fibre vision favoured by Labor, to also make a return on investment.
The HFC cable networks used by Telstra and Optus will stop providing broadband services under Labor’s vision, but the networks are only used by a minority of broadband consumers in Australia, and are not considered by experts to be capable of supporting the level of traffic required for Australia’s future. Most current broadband traffic is carried over the copper network owned by Telstra.
Ciobo’s claim that the Coalition could complete its version of the NBN six years sooner than Labor is demonstrably false. The Coalition’s initial FTTN network build is slated to be finished by the end of 2016, according to its policy documents, while Labor’s NBN project is slated to be finished by the end of 2021. However, the Coalition’s 2016 rollout can not directly be considered comparable to Labor’s NBN plan, as it guarantees drastically reduced base speeds of only 25Mbps (ranging up to 100Mbps in some areas) across most of Australia at that date — compared to to the 1Gbps speeds guaranteed to the overwhelming majority of users under Labor’s plan by the end of 2021.
The more comparable target is the Coalition’s 2019 goal, which will aim to deliver speeds of between 50Mbps, ranging up to 100Mbps, by the end of 2019. In addition, a number of industry commentators have stated they do not expect even the Coalition’s 2016 goal to be easy to attain, given the slow pace of the NBN rollout to date. It is expected that many of the same rollout factors — involving issues with contractor skills and management, as well as complications with the management of the dangerous material asbestos in Telstra’s existing network infrastructure, will also apply directly to the Coalition’s rival NBN rollout plans.
Ciobo’s argument that monthly retail prices under the Coalition’s NBN policy will be 29 percent cheaper is also highly contestable, given that current NBN retail prices are directly comparable to other broadband prices under existing broadband networks. In general, Australian broadband prices have remained stable over much of the past half-decade. The Coalition has not presented significant analysis to indicate that its plan will result in significantly lower retail broadband pricing.
The Liberal MP’s letter is not the first time he has severely criticised Labor’s NBN project. For example, in a speech in Parliament in July 2011 (the full text is available on his web site), Ciobo stated: “For cities like the Gold Coast, where Telstra is already in the process of rolling out wireless technology providing 100 megabits per second, with no cost to taxpayers, and where the Australian Labor Party does not even have a schedule for NBN for six years, the Australian Labor Party says, ‘No, you’ve got it all wrong, Steve. The taxpayers have got it all wrong. The NBN is the way to go because taxpayers will pay for it. It will be in excess of six years but, hey, it will have been worth it.'”
“I am unashamedly opposed to the complete waste of taxpayers’ money that is NBN Co. Where it is not commercial for private providers to undertake that activity, fine—the Labor Party would carry me. But the reality is that in the vast majority of instances, it is commercially feasible, it is already happening …”
Ciobo, who has held his eat since 2001, was previously the tourism, arts, youth and sports spokesperson for the Opposition, but was demoted to the backbench in September 2010 by Opposition Leader Tony Abbott. At the time, a columnist for The Australia, Peter Van Onselen, speculated that Ciobo was “a Malcolm Turnbull lieutenant”.
The news comes as inaccuracies continue to fly from both sides of politics with regard to the NBN. The Australian version of pioneering US fact-checking website Politifact last week gave a “mostly true” rating to statement by Shadow Communications Minister Malcolm Turnbull that connecting to Labor’s NBN infrastructure will not be “free”, as various Labor politicians have claimed in similar letters to constituents as Ciobo sent.
Politifact also recently gave a “mostly false” rating to Labor’s claim that the Coalition’s National Broadband Network policy will see Australians charged $5,000 for access to fibre broadband infrastructure.
In early May Shadow Communications Minister Malcolm Turnbull came out swinging against what he described as “misleading and dishonest” material criticising the Coalition’s NBN policy and promoting Labor’s own, which prominent Labor MPs have started distributing to their constituents ahead of the upcoming Federal Election.
However, the Coalition has also made a number of misleading statements about Labor’s NBN project over the past several years. In one of the more blatant examples of misleading commentary, Federal Shadow Education Minister Christopher Pyne inaccurately claimed on national radio in October that the National Broadband Network had not connected any customers at speeds of 100Mbps, despite the fact that in fact, 44 percent of NBN customers connected to the project’s fibre infrastructure at that point had taken up such speeds. There have been several dozen other similar examples over that period.
Similar to the misleading infographics distributed by Labor MPs over the past several months, an infographic currently published on the Facebook page of the Liberal Party of Australia misrepresents Labor’s policy. It conflates Labor’s initial, $4.7 billion policy outlined in 2007 with its reformed 2009 policy, falsely alleging a blowout from $4.7 billion to $90 billion in the project, and a decade-long project timetable extension.
The ongoing misleading comments has led academics to label the NBN debate as having been poisoned by a constant series of inaccurate and misleading statements.
There are more than enough legitimate bases to criticise Labor’s NBN vision at this point, as Shadow Communications Minister Malcolm Turnbull has demonstrated over the past few months. It’s disappointing to see Liberal MPs like Ciobo resorting to the bottom of the barrel — throwing away the intelligent debate I know the MP is capable of — to criticise the NBN in a blatant populist appeal to voters, based on a series of statements devoid of context, and basic inaccuracies. Let’s hope the MP can do better next time around.
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