Turnbull’s MTM CBN should not be a monopoly



opinion The only way for Labor’s all-fibre National Broadband Network to sensibly function was for it to be a legislated infrastructure monopoly. But the Coalition’s watered-down, multi-technology alternative is a very different kettle of fish, and consumers will clearly benefit if rival telcos such as Telstra, Optus and TPG are allowed to overbuild portions of the network.

Over on Business Spectator this week, commentator Alan Kohler makes a very strong argument that Communications Minister Malcolm Turnbull must not allow telcos such as Telstra, Optus and TPG to overbuild portions of the Coalition’s Broadband Network (CBN) project, as all three have threatened to do.

Kohler’s argument is a simple one: Despite being a government-owned company, NBN Co is still a company, and has a responsibility to maximise the return on its capital. If the Government allows other telcos to build Fibre to the Basement in apartment buildings throughout metropolitan Australia, this will cut into NBN Co’s profitability and threaten its financial basis, causing an impact to the Government in turn.

Now, from Kohler’s primarily financial standpoint, and viewed through the framework of Labor’s previous all-fibre NBN plan, this argument makes a lot of sense. If you’re building a National Broadband Network based on primarily Fibre to the Premises technology, it’s pretty clear that you’re going to be using your profits from Australia’s dense metropolitan areas to subsidise the rollout in the more sparsely populated rural and regional areas of Australia.

Then too, there is no need to overbuild a FTTP network. Fibre to the Premises is far and away the best option for any kind of fixed-line telecommunications infrastructure. Deploying Fibre to the Basement, or even HFC cable, to apartment buildings in this context is pointless; it would be like giving retail customers the option of buying a beat-up 1970’s Holden Torana when they already own a Maserati.

But here’s the rub; NBN Co’s Strategic Review published in December last year made it clear that the Coalition is no longer planning to build a “national” broadband network, and it’s not planning to build its own network with Fibre to the Premises in most areas. That’s right, you’re entitled to feel ripped off: Malcolm Turnbull has pocketed the keys to your Maserati and is driving off into the Vaucluse sunset.

If the Government accepts the recommendations of the Strategic Review, around a third of Australian premises will receive HFC cable connections instead of Fibre to the Premises, and another 44 percent will receive Fibre to the Node or Fibre to the Basement. This dynamic changes the nature of the game entirely when it comes to infrastructure-based broadband competition.

Firstly, let’s consider the millions of Australian premises which are already using or will receive a HFC cable connection to their premises, under the Coalition’s new broadband plan. What is very clear in the existing broadband environment is that most Australians, even those within the HFC cable footprint, continue to prefer to use ADSL broadband over Telstra’s existing copper network, instead of adopting the HFC cable option.

HFC cable adoption has languished in Australia because it’s more expensive than ADSL, more difficult to connect, and has in some areas suffered network congestion issues that ADSL has not. In addition, you’ve historically only been able to buy it from two providers (Telstra and Optus), neither known for their customer service.

NBN Co may be able to overcome some of these problems, if it buys the HFC cable networks, upgrades them, opens them up to wholesale access and cuts prices. However, there is little evidence internationally that such a strategy will succeed, and even if it does, it’s likely to take some years. NBN Co’s own Strategic Review estimates that the company will take four years from calendar year 2015 to get its HFC job done.

In the meantime, I suggest that consumers would look very favourably on quick and dirty Fibre to the Basement rollouts by Telstra, Optus and TPG. Such rollouts would get better broadband very quickly to hundreds of thousands of apartments all around Australia. Real services, to real people, with significantly faster speeds, and faster than NBN Co can do it. Bingo. That’s what we call a real consumer outcome. Sure, the choice of providers will be limited, and I’m sure prices will be premium-level, but nobody’s forcing consumers to sign up to these new FTTB plans. Traditional ADSL options still exist and NBN Co will eventually come to the party as well.

In the long-term, I strongly suspect that Australian consumers living in apartments would prefer having various connectivity options, including both FTTB and HFC cable, from multiple providers, to one single mandated connection supplied by NBN Co (unless that mandated connection is FTTP).

I’m living in an apartment complex with HFC cable right now in a major metropolitan area, and I can tell you that I’d love to have several additional high-speed broadband connection options to this building. Having that flexibility would allow me to apply competitive pressure to my existing HFC cable broadband provider (Telstra) to deliver better services. Monopolies tend to breed stagnation.

Of course, not all apartment buildings will be served by HFC cable, under the Coalition’s plan. Many, even in the HFC cable footprint, will likely be served by either Fibre to the Node or Fibre to the Basement. In this context, on paper it does seem somewhat farcical that you might end up with three to four different providers, including Telstra, Optus, TPG and NBN Co, all running FTTB solutions into your building.

Industry commentators have long argued that telecommunications infrastructure is a natural monopoly, and in many cases I tend to agree. Arguably, premises only really need one fixed-line telecommunications network providing their broadband needs, as long as that network is open to equitable wholesale access.

However, this is beside the point. Telstra, Optus and TPG are private sector companies volunteering to deploy additional broadband infrastructure throughout Australia. Nobody will be holding a gun to consumers’ heads, forcing them to sign up for FTTB through these providers, and the Government should not be stopping these companies from risking their capital through infrastructure investment. Consumers will only benefit from having three to four different providers in their building all competing for their broadband budget, and the Government should leave the business case for these investments up to the companies themselves.

Kohler, with his argument based on NBN Co’s financial viability alone, has missed this point completely. Most Australians couldn’t care less about NBN Co’s financial viability. Certainly I have only a moderate interest in the issue, and I write about the company daily. The only reason anyone cared about NBN Co to start with was that the company was promising better broadband. If someone else can deliver that more quickly, they’ll vote with their wallets. The NBN debate should not be about the finances of one company, but rather about real outcomes for consumers.

There’s also the fact that, although it doesn’t like to admit it these days, the Australian Competition and Consumer Commission has long been in favour of this kind of competition in Australia’s broadband market. This kind of competition is what the ADSL wars of the 2000’s were all about, as those same companies and others like iiNet frantically competed to fill up telephone exchanges with their own DSLAMs, delivering the broadband most of us enjoy today. If Telstra, Optus and TPG have their way, that battle would now extend to FTTB hardware in apartment basements.

Despite the fact that he has recently made comments effectively delaying the planned FTTB rollouts for six months, Malcolm Turnbull is on record as supporting infrastructure-based competition too. “Infrastructure-based competition is the norm around the world because it drives investment, encourages innovation and keeps prices lower,” a frequently asked questions document about the Coalition’s broadband policy states. And the Minister, while in Opposition, regularly waxed lyrical about the benefits of keeping the HFC cable networks operational to compete with a national FTTP rollout.

The only stakeholder to be disadvantaged by this kind of competitive deployment is the Federal Government, due to the financial damage such competition would cause to NBN Co. As Kohler mentioned, competitive FTTB rollouts would undercut NBN Co’s business model of subsidising the bush with profits from cities.

However, one might well ask, why the hell should the Australian consumer living in a metropolitan apartment served by FTTB care about that? That’s an issue for the Government to sort out. Consumers just want better broadband, and they want it now. And they would rightly be outraged if the Government stopped private sector companies from (legally) providing it to them.

As for the bush, well, there should be no problem with the Government continuing to subsidise unprofitable telecommunications services outside the cities to the tune of billions of dollars, as it has done for almost two decades with the Universal Service Obligation rules.

Under Labor’s all-fibre NBN vision, the Government had a very solid technical and economical argument that NBN Co should enjoy monopoly powers over Australia’s fixed-line broadband market, because it was building expensive and technically superior infrastructure that the private sector would not, or could not. However, with that plan out the window, the Government’s argument against infrastructure-based competition has also evaporated.

Blocking productive private sector investment in order to maintain the business case of a flawed government monopoly is not behaviour one would expect from a Government dominated by the Liberal Party. So far Abbott and Co have shown themselves very willing to stick to their guns when it comes to getting the hell out of the way and letting the private sector do its job. Let’s hope they don’t decide to hit reverse and nobble competitive investment in the telecommunications sector, to ensure the business case for a government monopoly they’ve already drastically carved up in five short months.

Image credit: NEXTDC


  1. The only reason the current Government are continuing to do anything with regard to the roll out of upgraded telecommunications infrastructure is so the existing spending on the old fibre NBN doesn’t wind up “on budget” any time soon.

  2. I’m not sure whether MT’s job of Destroying the NBN is going exactly to plan or is going off the rails. The opposing goals of “private sector investment” and “better broadband for all Australians” must be addresses at some point.

    The next steps in destroying the NBN:
    – Allow infrastructure competition
    – Financial analysis of CBN shows it won’t make a profit
    – Use this financial analysis to show that the NBN wouldn’t have made a profit using the illogical rationale that if the CBN won’t make a profit then how would the NBN if it was going to cost twice as much
    – Dismantle CBN plans
    – Minimise NBNCo to servicing current customers

    Job Done, wash hands, what can we sell now?

  3. You are right and wrong…

    Right – under MTM, the government should draw up some rules so these companies can compete on infrastructure…ie. TPG, Optus, Telstra should ALL be allowed into a building.

    Wrong – We’re going to strand the rest of the country in broadband backwater forever.

    This is why most government projects (hello Victoria) fail or go miserably way over budget – because they can’t stick to the stupid scope. Everyone had finished talking and were starting the implementation…Gillard was right. The Libs are ripping the cables out of my house – they were there on paper :(

    • “Right – under MTM, the government should draw up some rules so these companies can compete on infrastructure…ie. TPG, Optus, Telstra should ALL be allowed into a building.”

      Allowing is one thing, compelling is another. Why will any of TPG, Optus or even the behemoth Telstra enter a building once a competitor is installed? They tried that with the original HFC roll-out and both players lost buckets of money. Surely the telcos don’t want to repeat that.

      And once a telco is in the basement, what opportunities are there for competition to get prices and keep down? These are surely mini-monopolies which NBN will have to buy out if we ever are to get ubiquitous fibre.

      Hopefully the Libs will be out of government before the CBN makes too many expensive to unravel mistakes.

      • Because if you have a bigger bucket it came sometime be good in the long run to make the other guy also lose money. Sometimes it bites you in ass, Qantas was doing it for years to shut out competition they tried it with Virgin and now look where they are at as a result.

        • You can’t compare Telstra/Optus/etc to Qantas/Virgin unless Qantas and Virgin provide their own runway.

          • The trouble has been Qantas/Optus did not learn from the history of Telstra/Optus. rather than the other way around.

            With all the reflection on WW1 based on its centenary at bbc.co.uk/ww1, it reminds me of the generals sending the troops over the top time after time expecting a different result.

  4. This “solution” will land us exactly where we are today. A massive digital divide between metro and regional and rural areas. The biggest advantage of Labor’s NBN was that it provided ubiquity to 93% of the population. Everyone would have the same base infrastructure, and could access the same speeds and a variety of RSPs.

    Under this “solution” the metro areas would end up over serviced, and the regional and rural areas get whatever can be supplied on govt subsidy. Nothing will happen until the govt opens its wallet at any given time – especially seeing as NBN Co would not be economically viable on its own. We have already seen how badly this has worked over the last decade. Telstra came along and swallowed up the lions share of that money and locked in customers on infrastructure they were reticent to share. The extra costs for ISPs to service these areas was prohibitive, because Telstra controlled the backhaul etc. Many of those barriers to entry wont change under this “solution”.

    I can understand why Renai, living in his metro apartment block would get excited about the possibility of having super doper service, from lots of providers and ignoring all else. Beyond those users, the rest are going to get screwed. Hardly fair or equitable. We will be having the same conversations about how to fix the same problems in another decade if we head down the road of this “solution”.
    If you are going to promote private sector investment, you should look at ways to encourage them to invest in areas that need it the most – i.e. regional and rural areas – which have been underserved the longest.

    Its sad to see as well, that the regional people that are going to get screwed over, are largely in National Party seats, and the Nationals have let them down badly. They used to support and promote FTTP as the best solution for regional areas, and said it was necessary to be able to compete with metro and overseas areas.

    The Libs policy is a very bad idea for most Australians. That cannot be denied.

    • Hmm … I think you’re conflating several issues here. Telstra, Optus and TPG are not offering to deploy infrastructure in rural areas — they’re offering to deploy it in metro areas. The idea that metro areas will be well-serviced by the private sector and rural areas will have to be supported by the public sector (because the private sector will not do it) is absolutely nothing new here.

      • I don’t think I am conflating issues. I understand who is doing what. It’s the same as what we see today. I am merely pointing out that Turnbull’s plan effectively maintains todays status quo. The metro areas have far better services than regional and rural areas. Labor’s NBN would have addressed this by providing ubiquity. Under Turnbull’s plan, the metro areas have far better services than regional and rural areas. Nothing changes.
        Being in an area where the Labor’s NBN was being rolled out meant that our regional area was being looked at by companies and families for relocation and decentralisation of their offices. That will disappear under Turnbull’s FTTN plan.

        There should be incentive for private companies to improve regional services, not just keep stacking into the same metro areas. As it stands, in regional areas, we will have to wait for upgrades until the government feels cashed up enough to throw NBN Co some money. Given the slashing nature of this government, its very likely it will be an extremely long time before we are moved off copper and given equality to metro people.

        How do you see Turnbull’s plan improving the substantial digital divide that exists now Renai?

          • Private sector selective investment is what is causing the divide today and so how Turnbull is addressing it is exactly on topic. Turnbulls plan will only make it worse in the future. Metro areas today are over served, and can get services not available to regional subscribers (naked, choice of ISPs, etc,etc,) This will only get worse if Turnbull allows infrastructure competition. For that reason alone it should not be allowed.

          • Turnbull’s focus is supposed to be fixed the areas with the poorest services. That should mean that the regions get much greater improvements faster. This will not happen. Metro areas will get better services long before the regions if Turnbull allows infrastructure competition. Ubiquity is out the window. The regions get screwed for another decade or 2.

          • I’m 20 minutes from the Brisbane CBD. My area is underserved.

            And let’s not forget the HFC cabling debacle either. It’s not as straight forward as letting private companies do what they do best.

            But I have to agree…Renai is in an apartment…bring on the broadband hey ;)

          • There’s a few issues with the way the digital divide has been addressed under NBN Co.

            The first of which is that rolling out to regional areas with minimal technological adoption is directly responsible for the horrendous uptake the NBN Co has been reporting to begin with.

            The problem that Turnbull is trying to halt here, is that of the FTTB networks being a monopoly. The NBN itself had tenders from private entities willing to do the work at a reduced cost, by today, servicing more than 95% of the population. Wanna know the dirty little secret? Every single one of them wanted a period of profiteering from a monopoly to recoup their cost.

            The anti-competition clause already caused HFC upgrades to be pushed back by about 5 years. It’s caused headaches for greenfields because due to NBN Co’s inability to provision an actual network to a new estate, many developers have had to invest huge amounts of cash to roll out their own, at huge markups to the consumer (I’ve heard ballpark figures of $700 to connect per premises), whose only financial viability hinges on selling out to any interested bidder, be it iiNet, Telstra, TPG, or NBNCo.

            I personally have no problem with monopolistic behaviour employed by private enterprise, especially if it gets a better outcome sooner, but I have to admit that since we’ve *already* invested in an NBN Co, and ALREADY are suffering the fallout of the anti-competition clause, and ALREADY are in a position where we’ve halted the benefits of private investment, that perhaps we should see the plan out rather than having the worst of both worlds?

            Couple that with the fact that people keep making tired arguments because their promised unfunded broadband which existed only on paper, was taken away, and it’s hard to take the detractors seriously anymore.

    • Under both versions of the NBN (Labor or Coalition), those lying outside of the fixed line footprint will pretty much receive the same deal. Also, metro users have always had better services compared to regional Australia and the majority of Australians in live in the suburbs and the inner city. Typically, it will be the metro users that will cross subsidise everybody else.

      • ” metro users have always had better services compared to regional Australia”

        I remember when women in some countries “never had the vote and would never be allowed to vote”.
        The major point of the Digital Divide and the NBN is that the internet and modern telecommunications are no longer a “nice thing to have”, but are rapidly becoming a necessity. Therefore, your description of the past is what needs changing for the present and the future if we value the welfare of ALL our citizens and not just our nearby neighbors.

        • “your description of the past is what needs changing for the present and the future if we value the welfare of ALL our citizens and not just our nearby neighbors.”

          Under Labor or the Coalition the quality of broadband will improve for remote and regional Australia.

          I don’t expect that allowing competition in the cities will degrade services in the country; all it will do is just make the NBN business case unviable and put the NBN on the budget sheet.

          • “Under Labor or the Coalition the quality of broadband will improve for remote and regional Australia”

            It depends on what you mean by “improve”…the minute improvements put forth by the LNP seem to be more lip service than an actual improvement.
            But what’s most important is that ALL citizens are given a fair go by allowing them access to truly modern telecommunications. The idea that FTTN or HFC is “good enough” is anathema to that concept.
            Without a ubiquitous FTTP system, we are just letting not only the people down, but their future generations as well.

          • “I don’t expect that allowing competition in the cities will degrade services in the country; all it will do is just make the NBN business case unviable and put the NBN on the budget sheet.”

            It will degrade the services comparatively. Regional and rural areas will have far slower and reliable services than metro areas will. Metro areas are likely to get upgraded services much faster as well. Its more than feasible that metro areas will have speeds in the hundred of mbps, whilst regional areas will still be languishing on copper a speeds in the tens of mbps. The digital divide is set to become much wider than it is already. That is a degradation.

          • … I don’t see that allowing FTTB on cities will degrade things in the bush. Cities will have more options, but nobody is suggesting stopping FTTN/FTTB rollouts in the bush.

          • Where are there going to be FTTB rollouts in the bush? There are very few large apartment blocks.
            FTTN in the regions vs FTTB/FTTP/upgraded HFC in the metro areas is no comparison. FTTN will be left a long way behind. The necessary upgrade from FTTN to FTTP will only happen when the govt get around to it, and by then metro areas will be even further ahead. Turnbulls plan is a backwards step for the regions. It will increase the digital divide, not decrease it. The regions will be on copper for a few more decades while the governments play politics. As I said, its exactly the same situation we are in today.

      • “Typically, it will be the metro users that will cross subsidise everybody else.”

        How does that work if the majority of customers in those areas are not with NBN Co? Its likely that Telstra, TPG and Optus will beat NBN Co to the punch and have their infrastructure built long before NBN Co does. This will mean that the private companies will lock up those customers, and NBN Co will effectively earn nothing from them. If NBN Co is earning nothing from them, how are they going to cross subsidise regional and rural areas?

        • It will have to be through the budget…which is vulnerable which is always vulnerable to the games pollies play.

  5. It makes more political sense for urban users to wait longer and pay a higher price for their connection than to allow the NBN model to financially fail.

      • I take it to mean a negative NPV and a return that won’t compensate for the risk of the project. CBA panelist, Henry Ergas, has argued before that Labor’s expected 7% return is too low. So obviously the Coalition’s 5% return isn’t going to cut it – and if I recall correctly that 5% return assumes no infrastructure competition.

        • I’m sorry, but as far as I’m concerned, I’m happy for the project to lose money, and a substantial amount of it. I don’t need it to make a profit for the government, although it would be nice if it broke even.

          • Fair enough. I also think that the majority of the public would agree with you.

            I’ve often tried to argue that politicians should be held accountable for the public money that they spend -particularly with regards to the NBN investment. Unfortunately though, I believe that I’m out of step with public opinion on that one.

          • (I also think that the majority of the public would agree with you. )
            No they don’t, although the majority want the NBN they don’t understand it.
            The Coalition NBN is a monster of a mess ( a dogs breakfast ) all Renai is doing
            is dipping his dick in and mudding the waters even more,
            One of the many beauties of the Labor NBN is that it used investors money to build it,
            it payed the invertors back, it was owned by the Australian people and it was a first rate comms
            system that would last 40, 50 years or more. And city people didn’t mind subsidizing the country because they were getting a superior comms system for the same price if not cheaper.
            The Coalition NBN is just a load of crap, as one commentor said ” regardless of how many times you polish it, its still a shiny shit”.
            Didn’t you guys listen to what Ziggy Switkowski said 5 years after the Coalition finish their NBN it will have to be replaced by FTTP.

          • The government should be optimizing the result for the country. The financial outcome for NBNCo is a small part of that.

            Liberal, Labor, the Greens and the Nationals all seem to agree that telecommunications (and a whole bunch of other services) should be subsidized in rural areas. There is no obvious reason why this subsidy should come out of telecommunications in the cities as opposed to general taxation revenue.

            Providing better telecommunications services has many benefits beyond NBNCo revenue. I have Optus cable at home, which provides 16Mbit down + 15ms ping at 10am in the morning (Gets an A rating on the new broadband website), but is painfully slow in the evening. Improved productivity when working from home would easily pay for a $3000 fiber connection for me in under a year.

            If the government has to put 10 billion over a 10 year period into NBNCo, that is just one quarter of 1 percent of the federal government expenditure to provide a service that almost everyone uses for several hours every day. Of course the government needs to be as efficient as possible, but doing everything possible to make NBNCo profitable is not in the national interest.

          • There is one good reason the subsidy should come from inside the company, rather than outside.

            And that is efficiency. In the same way that having 2 competitors compete for a single source of money ensures or attempts to ensure that both companies run efficient operations, having 2 parts of the company (rural/city) compete for the same money, means that the company is encourages to run an efficient company to maintain *both* sides of the business.

            If we subsidised the rural internet connections externally, then there would be no pressure to run an efficient city business, and even less incentive to run an efficient rural business.

            City because the income is fantastic
            Rural because you can just keep asking for a bigger subsidy.

            It gets even worse when you involve a government, because it is really easy to tell people: “I’m sorry, the government hasn’t given us enough money and we can’t give you a good internet service” when a direct subsidy is involved. If they can use political pressure to up the subsidy, they will.

            An internal subsidy cannot quite so easily bring political pressure to bear (since the “money” in that case is being used by the city-arm of the company, rather than coming from a government).

        • “I take it to mean a negative NPV and a return that won’t compensate for the risk of the project”

          But of course that does not take into account the massive economic return, just the business return. The economic return will FAR outweigh any losses, even those fantasy ones that the LNP tried to scare us with during the election campaign.
          Mind you, it is equally as likely that the NBN will make MORE then the 7% projected return.

          ” Henry Ergas, has argued before that Labor’s expected 7% return is too low”

          Sorry, but very few people not involved in LNP politics take anything Ergas says seriously…he is and always has been nothing more than a shill for the Coalition.

  6. Renai, I understand what you are saying in your article, but I believe you have missed an important point. It was Turnbull who played the economic viability card in the first place. Making up numbers left right and center, exaggerating the cost of the NBN and minimizing the sorts of the Liberal plan.

    To now say that the economic viability isn’t an issue is letting Turnbull and his deception completely off the hook. Their rally cry of sooner faster cheaper should not be forgotten as it would have been a considerable influencing factor for many voters. If not a change of outcome at the election it may have at least silenced the mandate rhetoric we have heard ever since TA took the seat.

    Don’t forget why we are where we are.

  7. “The NBN debate should not be about the finances of one company, but rather about real outcomes for consumers.”

    im sorry, but wasnt the entire liberal argument about the labor nbn that it was too slow, too expensive, and not financially viable, now theirs isnt financially viable (its also taking much longer and not as cheap as tehy thought) we should ignore their entire election position?

    isnt that called hypocrisy? (if there was a valid change of mind somewhere i wouldnt mind as much but this is just turning a blind eye)

  8. Following TPG’s forum on Whirlpool, there is indicative evidence the proposal they’re submitting to strata councils in apartment building requires them to agree to a sole provider clause on the basis of interference. Yes you might be able to get faster broadband sooner, but what is to stop providers jacking the price up if you have no alternatives, my building like most MDU’s does not have HFC, and I would be very concerned if the strata council agreed to a sole provider clause. But then do you really need a sole provider clause, there is probably a substantial benefit to being first mover, if TPG or another provider has already stitched up a substantial portion of a buildings residents on to 2 year contracts, there is little incentive for another provider to install equipment in your building, again leaving the first mover free to charge what they want.

    • +1 to this.
      This is the issue I see with allowing retail FTTB deployments – you will end up with a single provider in the building – either for technical reasons (interference in the riser) or logistical reasons (insufficient space to house multiple providers equipment, concerns about physical security and so on). Although much is talked about the state of the copper network, many building MDFs are also in a poor state with messy jumpering, poor or non-existent docuemntation and difficulty gaining access.

      By all means allow non-NBN FTTB deployments but then declare these as wholesale services as per the anti-cherry picking legislation that is already in place.

    • A 2 year sole supplier contract should include price plans that cannot be changed during the contract period – that’s the point of the contract.

      If a telco approached my strata manager I would requesting they obtain quotes from Telstra, TPG and Optus – so that owners can vote on the sole supplier decision. Would be interesting to see how that may affect existing tenant agreements.

  9. I don’t feel the nbn should lose money .. over the long term anyway. as far as the country getting shafted well they will under the liberal mess of a plan, they would under labours plan get a better quality of service with a better minimum speed, even under satellite. but lets also talk about those in regional areas just outside cities, probably the 3-5% over and above labours 93% rollout. Those 3-5% would be getting wireless which according to most of those that are on it is pretty decent and quite fast and pings are reasonable. under the liberals they will be luck if they get the absolute slowest vdsl, as sometimes the distances between pillars is quite large.

    as far as who gets it where first, there is enough unemployed people out there to do the grunt work of pulling cables both in the city and country to run it almost evenly in both areas, but I do understand why the country should go first, as the cities generally (but not always) has better service then the country, and with politics your only an election away from a project getting cancelled, or a bad press report and negative publicity away from it getting cancelled as well. and lets face it those most at risk of not getting a better service (ie country folk) are those that need the upgrade.

    as far as those that whinge about the country getting it first, let me put it in terms you understand. you say the country shouldn’t get subsidized internet because they chose to live out in the country. that’s all fine and dandy, but lets play devils advocate: you chose to live in the city, miles and miles away from where the cattle is grown and food is grown that you eat everyday. Do you think the country folk should subsidise your meals that because you live hundreds of KM’s away from where the cattle and foods are, fancy a $200 per KG bag of snags because you chose to live in the city?…. I thought not.

    This issue is not who gets what and when and in which order. the issue is about pissing away billions of dollars of taxpayers money onto a short sighted muddle of technology that even before its finished will be outdated and even whens its being enabled will be too slow.

  10. TRUTH :D

    Competition to bring down prices?
    Higher charges to actually make a profit?

    What do you think is more important and will happen when 3 companies are serving the same area with their own infrastructure?

  11. Renai

    I can’t really agree with this because to does seem to increase the capital cost of the rollout in densely populated areas. I’d also argue that once a company gets their foot into the basement it will be quite a bit harder for a competitor to get their equipment in their, especially if space is at a premium.

    You also seem to be advocating that a large number of users be stuck on ADSL till the NBN decides to install their own equipment into the building, which will probably be near the end of the rollout schedule since the Coalition will argue they have access to A grade broadband.

    I have no problem with Malcolm allowing the companies to rollout the equipment on an open access standard NBN wholesale rate. It could get things moving along quite a bit quicker, but if we allow MDUs to be held to ransom for years on access to AFFORDABLE broadband speeds > 25Mbs then we’re moving even further away from Labors NBN goals.

  12. With regards to FTTB and traditional ADSL. Most Telstra RIM’s have MPI (mid point injection) padding that artificially limit ADSL speeds when copper connects through the RIM to the exchange, this is to avoid cross talk signal issues.

    FTTB is essentially a RIM so if the copper also services ADSL back to an exchange, I would assume some sort of padding would be required on the FTTB equipment.

    If so this could potentially reduce the speed significantly for FTTB, or impact the existing ADSL users.

  13. Renai,

    I think you may be confused about the Customer Service Guarantee. This is not paid by the government. It is paid by the retailer out of its pocket for failing to meet targets and does not subsidize the “Bush”
    I think you may be thinking of the Universal Service Obligation. Which I understood to be a levy on the whole industry also not paid for by the government.

    The losses from supplying loss-making services in the course of fulfilling the USO are to be shared among carriers.


  14. Need a single lot of infrastructure for vectoring to work in fttb/n. Multiple isams with different vendors will not be possible. The vectoring hardware needs to be in control of all copper pairs in a bundle to achieve the good speeds.

  15. It seems like we’re in for an interesting few months ahead – the fallout of the FTTN decisions (we’re all assuming it’ll be horrible) and their (re)handling of competition.

    Either the wholsaler NBN Co is protected from competition and the business model maintained to achieve a politcally-suitable ROI, or it our hopes for ubiquitous high-speed internet are completely gone as retailers gobble up metro customers in a frenzy of self-interested investment that will lock them in to certain providers only. Ultimately we’d all lose, although Renai would get a short-term boost to his speeds and the LNP would edge closer to claiming success, so maybe it’s nto all bad?

    Interesting times…

  16. Renai,

    Yes and No. The single biggest driving factor behind the original NBN build, was to ensure that:

    – wholesale was a cornerstone of the NBN model
    – consistent wholesale options existed across Fibre, Wireless and Satelite
    – cherry picking was legislated out of existence

    We also, for the first time in over a decade, had a willing partner in Telstra.

    The negotiated agreement effectively prevented (at least without a crippling cost) building competitive infrastructure. Same could be said for Optus to a degree.

    Turnbull’s petulant insistence on a diverse range of technologies, despite overwhelming guidance to not do so (even NBNco’s rubber-stamp of his policy makes that painfully clear) has basically destroyed the business case for NBNco.

    Now, we have a very different situation. Telstra senses the blood in the water, indeed a number of infrastructure builders do.

    Turnbull’s network is a financial black hole, of which precious little profit will emerge. Everyone is now focusing on building their own empire, because, frankly, the government has proved it doesn’t know how to.

    So, Telstra will now profit from leasing copper it has no interest in (and it’ll make a return, regardless of whether NBNco does) to Turnbull, who will in turn fund their deployment of FTTB and other networks that will become direct competition.

    Everyone else is now scrambling to lock up exclusive builds. How about if they are not required to wholesale? Is this really the best way forward?

    This sounds an awful lot like the current situation. Something the original NBN build, however flawed and politicised, actually got right.

    A change in deployment priorities, and bipartisan support would have made the entire situation a moot point. Now?

    It’s a joke. And we get to watch Telstra re-assert it’s infrastructure strangle-hold. Funded by the Government.

    Destroy the NBN? Mission Accomplished.

  17. Just a quick note: I think a lot of people are missing the point of this article. We are not debating FTTP versus FTTN or Labor versus Coalition here. Labor lost the election …

    We are debating whether Telstra, Optus and TPG should be allowed to deploy FTTB into metro apartment buildings or not, and why. There are no current plans for a nationwide FTTP network, so people need to stop discussing this specific issue in that context.

    If people don’t bring the discussion here back on topic and address the specific issue raised in the article, instead of railing against the Coalition and the CBN plan in general, then I will close comments. Please keep things on-topic.

    • “We are debating whether Telstra, Optus and TPG should be allowed to deploy FTTB into metro apartment buildings or not, and why.

      It’s not a case of whether they are allowed to, or not. They are allowed to.

      To the best of my understanding, there is absolutely nothing stopping Telstra, TPG, Optus, or anyone else deploying FTTB right now. The only caveat is that they must offer wholesale options.

      The question that is actually important, isn’t how FTTB is deployed (or even if allowed; it is) it’s whether or not wholesale competition will remain part of the legislation.

      The Ford Motors approach to Internet [you can have any Internets you like, as long as it is black the incumbant’s] was something the NBN model sought to resolve. Government funded, profit making enterprise owns the kit, virtually any ISP can sell over it.

      This is just as relevant to a FTTB deployment, as green or brown field.

        • ACCC have already indicated they see no reason to restrict TPGs plans (because it’s infrastructure competition).

          As long as TPG operate within the existing legislation, they can do whatever they want.

          “While the NBN is protected from rival networks by anti-cherry picking legislation, TPG plans to sidestep this by using a loophole that allows extensions of less than a kilometre for networks built before 2010.”

          This is from the same article you responded to.

          I may have poorly worded my “there is nothing stopping them” statement, however. You are right it does actually read as though there are no hurdles, and that’s bad on my part. Accepted.

          • “ACCC have already indicated they see no reason to restrict TPGs plans (because it’s infrastructure competition).”

            hey mate,

            the ACCC can jump up and down on a pile of rainbow unicorns for all I, or anyone else cares. Turnbull has flagged possible changes to legislation on the issue. That trumps the ACCC. That’s reality.


  18. Huh?
    As far as I see it, the consumer LOSES in every situation where there is not a regulated monopoly infrastructure provider.

    Where there is overbuild, the prices will need to be high to turn a profit – If you’re building high speed connection infrastructure to each house but only successfully connecting half (or less) of those houses, then all subscribers (no matter who they sign up with) have to pay for the un-utilised infrastructure on top of the cost of the infrastructure they do use!
    Where there is a private, vertically integrated monopoly provider, there is no competiton so the operator can charge what they want.
    And where it’s non-financial to build, the government will have to step in and build, subsequently raising taxes (or reducing expenditure elsewhere) to subsidise the build cost against a “fair” standardised access cost, or people in uneconomic areas get no infrastructure upgrade and suffer under existing low speed connection conditions.

    Better to have a single, regulated and neutral infrastructure provider to share 1 build cost equally across all users with competition in Service provision, just the the NBN Co model..

    • ” Better to have a single, regulated and neutral infrastructure provider to share 1 build cost equally across all users with competition in Service provision, just the the NBN Co model..”

      Yep. That’s just how I see it. This base infrastructure should be about providing equality and ubiquity.
      I don’t see why this infrastructure should not be looked at in the same way as utilities like water, electricity, gas etc. It doesn’t matter if you are metro or regional, you can turn on a light switch and get the same electricity provision, or turn on the tap and the water flows the same in metro areas as it does in the regions. This is because there is only one lot of infrastructure. We don’t have multiple, electricity lines, water pipes etc, coming to any house. Hence there is equality. If cherry picking were allowed, equivalent to what is being proposed in the article, this would not be the case. The business case blows apart and we end up with massive divides been the haves and have nots, as we do today in telecoms.

      The NBN should be about fixing these problems, not recreating and entrenching them. Turnbull allowing cherry picking will entrench them.

  19. If the goal of the coalition is (as they claim) to save money by building a cheaper network then they would welcome these competitors because every apartment building or area served by TPG or Telstra or iiNet or Optus is one more area the government can point to and say “see, that area already has fast broadband” and shove to the bottom of the priority list.

    If the goal of the coalition is (as some suspect) to keep genuinely fast broadband from being built as much as they possibly can (in order to protect their friends in the media industry) then they would want to stop these high speed alternatives.

  20. It really is a case of between a rock and a hard place.

    Turnbull’s party supports the concept of infrastructure competition. Conversely he can’t change legislation to legitimise such competition (cherry-picking) as that will effectively prevent NBNco from operating as a profitable enterprise.

    A conundrum. Compounded further by directly funding an entity (via copper rent) that will happily utilise that funding to compete with his network.

    As much as I welcome ANYTHING at this point that will resolve the appalling short-to-medium term situation, I’m yet to be convinced we’re not just handing a monopoly position back to Telstra.

    • “I’m yet to be convinced we’re not just handing a monopoly position back to Telstra.”

      Um, what?

      Mate, quite a few of the posts you’ve made today are making little rational sense in the context of the discussion being had. Check your premises, or I will consider putting you on the pre-moderate list. Nobody has discussed at any point re-enabling the Telstra monopoly.

      • I have linked to factual articles to support at least one comment today.

        Telstra is already trailing services that could directly compete. This isn’t a secret.


        I’m not making this up. To suggest “little rational sense” when I’m simply reflecting on the current situation, and then bothering to back that up with actual statements from either government or the industry, is a little unfair.

        Yes, there is a lot of speculation. This *is* within context. The trials are FTTB.

        Allowing TPG to enter into direct competition with NBNco, for example if Turnbull relaxes the competition legislation, has very far reaching consequences for FTTB and the NBN.

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