NBN: An electoral house divided

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opinion/analysis by Renai LeMay
24 February 2014
Image: Stock

The Tasmanian State Election has shown Australia’s politicians just how critical broadband can be as a hot button political issue. But the complete failure of the issue to register in the simultaneous poll being held in South Australia provides a balancing view for the informed observer, showing that broadband will not always be front of mind in every decision the Australian electorate makes; at least not yet.

For Tasmanian Opposition Leader Will Hodgman, the past week has not been a good one.

From a high-level perspective, the long-time Liberal leader’s position in the upcoming Tasmanian State Election to be held in mid-March is still looking solid. The Liberals continue to poll strongly in the state, Hodgman’s been looking youthful, confident and in charge, and all the gross political advantages are on his side: Hodgman’s up against a Labor State Government which only just clung to power in 2010’s hung Parliament due to an alliance with the Greens, and is looking a little stale after 16 years in power. Similar situations in other states in the past have usually resulted in the Coalition wresting power from Labor.

Then, too, Hodgman’s a familiar face to Tasmanians; he’s been the Opposition Leader since 2006. Residents of the state have had a long time to get used to the idea of the MP as Premier, and most probably assume that he will be in just a few weeks. As election analyst Kevin Bonham told Fairfax Media in mid-February: “At the moment, they would have to do quite a lot wrong to lose from here,” he told Fairfax on Thursday.”

However, it’s also true that the events of the past week have not helped Hodgman’s position any; a situation which must be particularly galling, given the factors that led into it were very much outside his control.

At the heart of the issue is a statement made by then-Shadow Communications Minister Malcolm Turnbull during the 2013 Federal Election to the effect that a Coalition Government would honour existing contracts signed by the National Broadband Network Company in Tasmania. Despite the fact that Turnbull never explicitly said that this meant the state would receive a full Fibre to the Premises (FTTP) broadband rollout, and despite the fact that the Coalition’s broadband policy did explicitly focus on the technically inferior Fibre to the Node (FTTN) rollout, Turnbull’s statement was interpreted by many Tasmanians to mean that the state would receive a full FTTP rollout, as all of the necessary construction contracts for such a rollout had been signed.

Left alone, the issue might not have become a huge one for the State Election. But NBN Co executive chairman Ziggy Switkowski gave a live radio interview in Tasmania in mid-February clarifying the situation and confirming NBN Co would split it rollout in the state between FTTN and FTTP.

No doubt Hodgman (and the Federal Coalition in Canberra) would have preferred Switkowski never commented on the issue. Because they ignited a firestorm of comment from all sides of the political spectrum and the media in Tasmania, leading to a series of embarassing episodes for the Liberal Party.

Hodgman accidentally admitted on camera that the issue could cost the Liberals the election, then flew up to Sydney to plead with Turnbull for a full FTTP rollout for his state and openly disagreeing with Federal Liberal policy; Turnbull was forced to back down and agree to trials of aerial FTTP in Tasmania, and finally a press conference on Saturday held by Abbott and Hodgman was dominated by the issue, with the Prime Minister refusing to address it directly.

Meanwhile, Labor made political hay while the sun was shining, magnanimously offering up Aurora Energy’s infrastructure free of charge to NBN Co to help fund better broadband for Tasmania.

The lessons in this episode are rather obvious for any seasoned watcher of Australia’s long-running and fraught debate over how broadband infrastructure should be upgraded in this country.

Firstly, for the first time the National Broadband Network became not just an issue in an election campaign, but the issue; the signature problem which all sides of politics were explicitly forced to deal with. Broadband is usually relegated to being a sidenote in election campaigns, with politicians assuming the electorate is not technically literate enough to care much about it; press conferences are usually dominated by other topics and an ill-informed mainstream media usually doesn’t quite understand the public statements politicians have made about the issue in any case.

However in Tasmania we got the opposite over the past several weeks. A media educated about the issue hounded both state and Federal politicians about it relentlessly; the electorate was watching the issue closely, and the politicians themselves were forced onto the back foot as they tried to keep up with public demand for action on the topic.

The reasons for the Tasmanian situation are, of course, somewhat unique. The state has been starved for decent broadband for a decade, courtesy of its rural location and the stranglehold which Telstra has had over backhaul connectivity across Bass Strait. Successive State Governments have raised the issue with Canberra for a decade, and were especially active during the formation of Labor’s NBN policy. Tasmania has always been at the head of the queue for the NBN, and consequently Tasmanians have been following the issue more closely than their mainland counterparts.

To illustrate how unique Tasmania’s situation is with respect to broadband, it is illustrative to compare the state to South Australia, which is also going through a state election at the moment. In fact, both polls will be held on the same day — 15 March. Like Tasmania, South Australia has long been run by Labor, with the current Government having been in power since March 2002. And, like Tasmania, South Australia is likely to vote the Liberal Party into power in March, if current polling is to be believed. And both states share certain other elements; they’re not part of Australia’s prosperous Eastern Seaboard (concentrated around Sydney, Melbourne and Brisbane), their economies are more heavily tilted towards agriculture and natural resources and away from knowledge industries, and both states have suffered problems with unemployment.

However, the duel state elections have exposed a major difference between the two states, in that while Tasmania has at times appeared obsessed with the broadband issue, in South Australia it has barely registered during the election campaign, with both sides staying away from the topic and the media not raising it either.

Instead, both sides have focused on issues much higher up the technology chain than the broadband layer. The SA Liberals, for instance, have vowed to make Adelaide “the startup capital of Australia” if they win the upcoming state election, promising to plough some $500,000 into a startup week and committing to a slew of other initiatives that would help alleviate what the party described as the state’s “devastating brain drain” crisis. In contrast, Labor has unveiled a new jobs partnership with HP, which has historically had a strong presence in the state due to its acquisition of EDS, which long held the State Government’s whole of government IT outsourcing contract.

The cause of this lack of interest does much to illustrate the nature of the broadband debate in Australia in general.

When it comes to broadband infrastructure, there are a number of key differences between Tasmania and South Australia. South Australia has a certain amount of high-speed HFC cable infrastructure throughout the city. Unlike Brisbane, Sydney and Melbourne, it does not have Optus HFC cable, but it does have HFC cable from Telstra, which announced in November 2011 that it was taking its Adelaide cable infrastructure to 100Mbps.

South Australia also has two major Adelaide-focused ISPs — Internode and Adam Internet, where Tasmania was unable to develop substantial competition to Telstra. Both Adam and Internode are now owned by iiNet, which has gone head to head with Telstra in the state, and were able to substantially develop South Australia’s broadband infrastructure over the past decade, deploying ADSL hardware (DSLAMs) into exchanges and even wireless infrastructure in remote locations. Adelaide also enjoys strong competitive backhaul options to the rest of Australia through infrastructure operated by companies such as Nextgen Networks, where Tasmania has historically been locked into Telstra’s cable across Bass Strait.

South Australia has also enjoyed strong levels of competition from Optus, at least, and increasingly Vodafone, when it comes to mobile telecommunications. In comparison, the lack of competitive backhaul to Tasmania kept both telcos substantially out of the state until the past half-decade, and most Tasmanians still rely on Telstra for their mobile phones and mobile broadband.

In short, what we’re seeing playing out here is the basic politics of need. Tasmania has suffered from historically poor levels of broadband connectivity; so its population has constantly been agitating for political intervention. Labor’s NBN project offered the state hope to resolve that problem, and the Liberal Party is currently experiencing a backlash by Tasmanians who had had that hope taken away. In South Australia, the issue has failed to register because of organically better levels of broadband infrastructure. Instead, the state’s politicians and media are focusing on higher order issues such as jobs.

What this dynamic tells us about the future of the National Broadband Network debate in Australia is that it is likely to be polarised by regions.

It is unlikely, based on the dichotomy we’ve seen between the Tasmanian and South Australian state elections that over the next several years, the level of dissent over the Coalition’s plans to water down Labor’s all-fibre National Broadband Network will come not from core metropolitan areas such as the inner suburbs of Sydney, Melbourne and Brisbane, which already enjoy relatively strong levels of broadband due to ubiquitous ADSL2+ connections, HFC cable up to 100Mbps and 4G mobile broadband infrastructure, but from outer metropolitan, regional and rural areas of Australia, where broadband levels are relatively inferior compared with those in the core of the cities.

To a certain extent we’ve see this phenomenon already. Some of the strongest proponents of the NBN have come from regional councils — no matter their political persuasion — which have seen in the infrastructure a key enabler for their areas. Telecommunications analyst Paul Budde recently highlighted the example of the submission the Mayor of Geraldton, Ian Carpenter, recently made to the Senate Select Committee on the NBN. In it, Carpenter writes:

“The City of Greater Geraldton is a regional capital of Western Australia located approximately 424 kilometres north of Perth, with a local government area covering more than 12,000 square kilometres and servicing a culturally diverse population of approximately 40,000 people.

Like many regional communities, the City suffers from the lack of services and facilities commonly found in metropolitan cities. The NBN and its high speed internet connection was identified by the City as a medium that would help reduce the ever increasing social inequity gap between metropolitan and country communities.

… Examination of the areas from which we produce our GDP reveals a heavy reliance on the primary industries of agriculture, mining and fishing. We believe agriculture and fishing, to some greater or lesser degree, will be compromised in the longer term by the constraints climate change will bring. Our mineral resources will be exhausted at some time in the future. It was clear that an alternative strategy to lead us to the future was required. The digital economy was an obvious solution. This, of course, relies on the provision of ubiquitous high speed data capabilities to all in our community.

… The life of any regional city is dependent on not just attracting new residents, but in retaining current ones, especially the younger generations. Today’s youth live an always-connected existence, dependent on ubiquitous communications. They strive to connect with their peers, take part in online distance education and participate in the future digital workforce of distributed but connected people. Access to high speed broadband is essential in the provision of education, employment and lifestyle opportunities to regional youth and to stop their exodus to major capital cities.”

Analysis has long pointed to a digital divide between the built-up areas of metropolitan Australia and the broadband-starved rural and regional areas, which Tasmania is a prime example of due to having its telecommunications infrastructure development stifled by Telstra’s control of the backhaul traffic across Bass Strait. The next several years of debate about the NBN are likely to be dominated by strong opinions from those in rural and regional areas about the infrastructure, while city-dwellers will most likely not feel as strongly about the issue.

Another example of this divide comes from Canberra. The suburb of Gungahlin, which had long existed as a broadband black hole in the ACT, has long raised its voice loud and clear about the need for better broadband in its area. Comparatively, loud voices on the issue from metropolitan Canberra, already well-served with broadband courtesy of TransACT’s FTTN network, have been harder to find.

In the long-term, however, debate around Australia is likely to ramp up in general. NBN Co’s Strategic Review notes that it will most likely not be until 2015 or 2016 that the Coalition’s plans to deploy FTTN and extend the HFC cable networks of Telstra and Optus will start to take effect. But over the next several years, as has happened over the past several years, bandwidth demands will be likely to increase substantially. Those ADSL2+ connections which those of us in city areas have enjoyed for some time are not going to be able to contain that ever-growing demand forever. As the next Federal Election arrives, the calls from right around Australia for better broadband are likely to increase. As polling and petitions have consistently shown, this is an area that Australians of all stripes and colours are interested in in the long-term, even if the intensity of the emotion shown on the issue is a little more intense in broadband-starved Tasmania.

In general, Tasmania offers Australia’s politicians a lesson: Ignore the broadband issue at your peril. Right now, the state is seething over what it sees as failed political promises for universal fibre. The same situation is not true of the rest of Australia — at least not yet. What happens in Tasmania today, may happen in the rest of Australia tomorrow.