analysis The ongoing stoush over how the Coalition’s Broadband Network should be deployed in Tasmania shows Australia’s broadband tangle at its worst: Construction contractors who don’t deliver, overly optimistic promises and estimates, and politicians playing petty power games with a highly important national infrastructure project. No matter which way you look at it, it’s a shocking mess.
If you look at the situation with respect to the Coalition’s Broadband Network in Tasmania from a 10,000-foot view, you might think that it’s easy to understand.
On one side of the boxing ring, with his clenched fists clad in sterling blue mitts and held up in front of his face protectively, stands Communications Minister Malcolm Turnbull, an evil glint in his eye as he defends the Coalition’s Fibre to the Node plans to significantly water down NBN Co’s broadband rollout in the state. On the other side of the ring is arrayed a crowd of opponents — Labor, unions, Greens, industry and even Tasmanian Liberals — all yelling angrily at Turnbull that they want a full Fibre to the Premises rollout for Tasmania.
It’s the sort of classic good versus evil dichotomy which the media consistently likes to apply to political battles; when conflict sells newspapers and drives clicks, all pictures will be painted in black and white.
I’m certainly not saying that the Coalition should pursue a partial Fibre to the Node rollout in Tasmania. My view is public and very clear: Tasmania deserves a full Fibre to the Premises deployment across the state. However, when you delve a bit deeper into the situation, it’s a little more complex than it appears, and I’d like to take some time in this article to illustrate some of the dynamics going on in the Apple isle when it comes to this issue, and why the whole situation is more of a mess than it appears at first glance.
The core issue in Tasmania right now is not, in fact, what style of broadband rollout the state will receive from NBN Co over the next few years. In fact, the core issue right now is how any kind of rollout will actually be delivered — who will do it, and how.
As Turnbull has pointed out, and as former Communications Minister Stephen Conroy has agreed, Labor’s external construction model for its former National Broadband Network project failed. In the populous eastern seaboard states, where skilled construction labor is more widely available — Queensland, New South Wales and Victoria — this has meant delays to Labor’s FTTP rollout.
However, in states with less resources — South Australia, Western Australia, the Northern Territory and Tasmania — the rollout basically collapsed entirely, with NBN Co being forced to turf contractors such as Syntheo entirely and start employing sub-contractors itself directly to reboot its deployment in many areas.
In Tasmania, basically the entire rollout of Labor’s NBN project was handed to one contractor, Visionstream. However, as Turnbull has pointed out (and there is quite a lot of evidence to back the Minister’s allegations), Visionstream has proved itself extraordinarily ineffective at getting work done on the Tasmanian leg of the construction effort, with its progress virtually grinding to a halt late last year.
Before the Federal Election, Turnbull explicitly promised Tasmanians that a Coalition Government would respect existing construction contracts signed by NBN Co. However, FTTN or FTTP, the problem now faced by Turnbull in Tasmania is primarily the question of whether Visionstream is actually capable of deploying either. Right now, Visionstream’s constract with NBN Co hangs by a thread, as the company moves forward with deployment efforts (PDF) designed to prove to Turnbull that it can actually get its job done.
Visionstream’s problems in Tasmania are, to a certain extent, understandable. As the contractor has stated publicly, Telstra has had issues with asbestos in its network in the state (PDF). Then, too, although Visionstream has 200 staff in the state, a substantial portion of the work is being undertaken by the company’s contractors. In a broadband-starved state such as Tasmania, where little telecommunications infrastructure has been deployed over the past decade, one can’t help but suspect those contractors are not yet experts in deploying fibre cables. It’s likely also that NBN Co’s management of the situation hasn’t been the greatest.
None of this is a solution for Turnbull. But if you look at the Visionstream relationship as being Turnbull’s key problem in the state, it does cast light upon the Minister’s public statements on Tasmania over the past several months. Virtually every statement Turnbull has made about the Tasmanian situation has been designed to put public pressure on Visionstream to deliver on its commercial obligations to NBN Co in the state. We saw this in October, when Turnbull said the Tasmanian rollout was “dead in the water”, specifically calling out Visionstream for its issues, we saw it in November when Turnbull explicitly blamed Visionstream for the issues, and we saw it again in February when Turnbull explicitly blamed Visionstream for the FTTN decision in the state.
Turnbull’s decision to conduct a further round of aerial Fibre to the Premises trials in Tasmania has nothing to do with needing new deployment data — as the CEPU has pointed out, plenty of trials have already been done, and the financial modelling can be done on paper — and everything to do with appeasing a displeased electorate ahead of the state election, as well as starting to engage with one of the two companies which could provide a viable alternative construction workforce to Visionstream’s: State-owned energy utility Aurora Energy.
If the Visionstream contract eventually fails, after all — and, as I mentioned, it’s on a thin thread right now — Turnbull will need to source an alternative. There are probably two main options for that at the moment: Aurora, which has been itching to deploy FTTP in Tasmania for a decade now and deployed the state’s TasCOLT trial, as well as some of the early NBN infrastructure — and Telstra, which owns most of Tasmania’s existing telecommunications infrastructure and also has its own workforce.
Turnbull knows that he can’t quickly get Telstra involved in the Tasmanian deployment, courtesy of the extremely complex negotiations which NBN Co is conducting with the telco on a national level at the moment. But he can hold the prospect of Aurora taking over at least some of Visionstream’s work as a knife against its throat; and that’s precisely what he is doing.
There are also additional complexities to the Tasmanian situation. For starters, its doubtful that the State Liberal Leader, Will Hodgman, is actually trying hard to convince Turnbull that Tasmania should have a full FTTP rollout, as he has stated. In fact, it’s much more likely that Turnbull and Hodgman, members of the same party, after all, came to an arrangement whereby Hodgman would call for FTTP to keep the electorate on side for the state election, and Turnbull would ‘reluctantly’ allow himself to be persuaded of the need for trials along those lines.
This is precisely the behaviour we saw from the Liberal Party before the September Federal Election, when Turnbull appeased Tasmanians by implying he would commit to FTTP in the state, without actually doing so. Local Liberals picked up the statement at the time and ran with it. But let’s get real: For ideological reasons, Turnbull simply has no interest in pursuing a full FTTP rollout in Tasmania, no matter how much sense it makes.
For its part, Aurora Energy is doubtless champing at the bit to be involved in the CBN rollout, both for its own financial success, but also because it has long believed FTTP is inherently the right thing for the state. Most electricity utilities across Australia do. However, as with its mainland siblings, Aurora is also probably underestimating the actual deployment cost of FTTP infrastructure. Most broadband projects initiated by Australia’s electricity giants over the past decade have gotten nowhere.
This has led to the farcical situation where Labor Premier Lara Giddings has publicly offered NBN Co access to Aurora’s power poles for aerial FTTP deployment. The cost? A piddling $25 million over 20 years, which Giddings and Aurora no doubt sees as a substantial commitment, but which NBN Co would see as a drop of water in the ocean of its billions upon billions of broadband deployment costs.
The last looming presence in the whole situation, of course, is Telstra. As I have previously pointed out, Labor’s NBN contractor model was highly unusually globally in that it is seeing an external company upgrade an incumbent telco’s network. In pretty every other country globally, the Government of the day has worked with the incumbent telco, usually separating it into retail and wholesale arms, and then incentivising it to upgrade its network, rather than taking on the task itself.
I personally strongly suspect that the external contractor model which first Labor, and now the Coalition, is pursuing with respect to NBN Co’s rollout efforts will eventually change drastically, and that Telstra will be brought in to oversee substantial slices of the upgrade of what is, after all, its own copper and HFC cable networks. In Tasmania, I suspect that this will eventually happen, as it will eventually happen on the mainland.
There would be a significant irony in this situation. Telstra has dominated telecommunications in Tasmania since time immemorial, even more so than it dominates telecommunications on the mainland. It must be amusing to the telco that successive governments continue to turn elsewhere for their construction efforts.
So where does this leave Tasmanian residents and businesses? Clearly, it leaves them in a mess.
The current NBN Co construction contractor in Tasmania is not delivering on schedule. The next most likely option is probably overly optimistic about its capabilities and costs. The Federal Government is playing politics with the population, implying FTTP verbally but steadfastly marching towards FTTN in reality. The two major state political parties are also playing politics with the rollout. Meanwhile, Telstra is waiting in the wings for its own stab at the situation. In short every stakeholder in this situation is marginalised, not able to deliver on its promises or just not listening to the Australian public’s will on the issue.
It’s a shocking mess. But then, that’s nothing new for the NBN. As I wrote 12 months ago:
“The NBN is still a wonderful dream; wonderful enough that anyone from overseas who visits Australia tends to praise it as a fantastic undertaking that they wish their own government had undertaken.
But let’s be real about this: For the foreseeable future, the NBN is going to remain just that — a dream. The NBN is not coming to your house or business any time soon, and in the next five or so years Australia can expect the current disgraceful level of political infighting about the project and delays in its rollout to continue. This dreadful situation is not going away any time soon, and neither are the problems with your broadband connection. So get used to the dropouts.
The NBN has always been a fantastic dream. But all dreams must end as we wake to grisly reality. This project has been mismanaged by Labor, and is about to be screwed over wholesale by the Coalition. At this stage, the suggestion by then-Telstra chief executive Sol Trujillo back in 2005 that the Government pay Telstra a few billion to deploy FTTN itself (and lock out competitors along the way) is looking more and more like it would have been a winner, comparatively. We may not have had competition in the telco landscape, and we may not have had fibre to the home. But at least we would have had something.”
So what should happen in Tasmania? It’s fairly clear, to my mind. Given the universal political support for FTTP and the need for new industry options to boost the state’s economy, the Federal Government should mandate an all-FTTP rollout in the state. At least three contractors — Visionstream, Aurora and Telstra, as well as anyone else interested and who can demonstrate their capability — should be given the chance to prove themselves in small trial rollouts in small areas of the state, with evidence heard as to how they would extrapolate those rollouts across Tasmania. Then new contracts should be issued to one or more of these companies to deploy FTTP. If you want to pick the safe and secure (but probably costly) option, I’d go with Telstra. And of course, Aurora would be mandated to help with aerial FTTP rollouts, as it’s owned by the State Government anyway.
This would seem to represent a sensible way forward, although I’m sure there would be specific problems to deal with, such as how to cancel the current Visionstream contract. But then, nothing with respect to Tasmanian telecommunications has ever been sensible. Everyone concerned with the process seems too involved in looking after their own interests and not focused enough on the overall picture. It’s nothing new for Australia’s fraught broadband situation; but it is disappointing.
It’s certainly true Labor made some mistakes with the NBN, the biggest imo was instructing NBN Co to use construction firms in prime contractor roles.
The model adopted by Optus and Telstra in their 90’s HFC rollouts would have served us all much better and then the real NBN would have been at a politically unstoppable point.
For those not around for the HFC rollouts, Telstra and Optus both did all the project management and sub-contractor management in house and hired all the subcontractors directly. This produced a fast efficient roll-out (ignoring the duplication issue).
+1
I wonder what happens if Turnbull does cave in and do a full FTTP rollout in Tasmania? I suspect that much of Australia has connectivity that is equally poor. How does he handle the inevitable accusations of favouritism?
Considering bagging Tasmania is a national passtime, how many local politicians are going to stand up and say “Help us! We are just as bad as Tasmania?”
To be honest – the most remote 7% of the national will continue to get wireless and satellite access at 25Mbit – while it’s not fibre speed, it is still a huge jump compared to what they were previously (it’d be a huge jump even for me – 3.5Mbit ADSL2+, 10km from the Hobart CBD!)
It should be pointed out that NBN Co’s Fixed Wireless has a planned upgrade path to at least 100mbs per Premises – NBN Co have the spectrum already and have previously publicly mentioned this is on their roadmap.
URL?
Its IMO inferred here:
http://www.itnews.com.au/News/259237,nbn-co-eyes-faster-wireless-speeds-over-lte.aspx
McLaren said the decision to go with LTE for the fixed wireless network was based on the technology’s extensive roadmap.
“We’re about predictability and quality of the actual service over trying to get access to people to higher speeds,” he said.
“Although it is wireless we are delivering a network that is very much engineered around quality, around performance in order to deliver high quality services to the end users which are actually going to connect to the service.”
and here is an article on the LTE-Advanced Roadmap:
http://gigaom.com/2011/02/07/as-lte-hits-1-gbps-3g-tries-to-keep-pace/
LTE Advanced gets 1 Gbps on the downlink and 200 Mbps on the uplink. In March 2010, Chinese equipment maker Huawei showed off 1.2 Gbps LTE Advanced. In December, NTT DoCoMo launched its LTE network, which currently offers download speeds of 37.5 Mbps and upload speeds of 12.5 Mbps.
I know McLaren talks about quality over speed too but LTE-Advanced (which Ericsson gear is capable of) clearly has the upgrade path to offer 100/40 in the future.
I had seen a more specific reference to their Wireless roadmap from NBN but cant find it atm.
I was at the press conference linked, and I never heard McLaren talk about anything faster than 25Mbps — and it seemed like NBN Co had massaged things a fair bit to get even to 25Mbps. I suggest 100Mbps is nowhere near being possible at this point. Remember we’re not talking about a similar deployment to mobile broadband — this is fixed, and needs a consistent throughput for all users in the tower range. It cannot range up and down constantly like mobile broadband does.
You could well be right and I’m getting my wires crossed.
Renai,
The technology used for the NBN Fixed Wireless is TDD-LTE
This means that users do not get a committed bandwidth, but instead one that ramps up or down the number of timeslots a user gets depending on their current usage with regards to overall usage on the tower
I don’t think TAbott will allow that to happen as it will be the first major ‘we took this policy to the election and got a mandate’ policy the LNP will back down from and they just can’t afford to let that happen.
The LNP are already under pressure for their “we are going to repair the budget and economy” when it really isn’t that broken.
Ah! But that’s the genius part of the plan!
Break the economy first year or so then slightly improve it near election time and claim progress! :D
Excellent article, a very good description condition of the rollout in Tasmania right now.
One point not mentioned is the sub contractors protesting the lack of work on the Tasmanian NBN. It would be nice to know if there is Visionstream not contracting them because they have not been given enough work or if they are just not really trying to get things done ASAP maybe try and keep costs lower?
Anyway, interesting situation when the claim is the rollout is too slow in Tasmanian and you have contractors who want the work sitting idle.
I’ve said this before, but I don’t know whether to laugh or cry to hear that the NBN and Turnbull are suddenly discovering that they would actually need a large, motivated, and well trained workforce to re-wire the country.
Almost a century ago the PMG was given the job of straightening out the mess that private enterprise had made of telecommunications. Their answer was to hire young people from all over, give them permanent jobs and extensive training and set up local depots right across Australia.
Of course once the job was finished, it was time for Big Business and Big Media to rubbish the organisation and generally run it down so it could be sold off and asset stripped (just as is happening to Aust Post and Qantas today).
The NBN was started with the wonderful dream of rewiring Australia for a digital era. But there was a problem: These days any talk of setting up a public utility will get you labeled a Socialist. And as both of our main parties are competing to show how right-wing they are, a public utility was out of the question. They even promised to sell it off once the job was done.
So instead we went with outsourcing the whole works. The resulting giant cock-up was totally predictable.
But two minor points:
Firstly: The NBN didn’t fail, it was aborted. It certainly needed a change of direction, but periodic restructuring is fundamental to managing any long-term project, especially something which hasn’t been attempted before. If it had bi-partisan support, the NBN would have continued, albeit on a somewhat altered course.
And Secondly: Telstra could not manage the NBN by themselves without massive restructuring. They’ve long since sacked their good people, trashed their training schools, and are now desperately understaffed with most of their technical staff working on contract.
The bottom line: We trashed the Telecommunications workforce in Australia and are now paying the price.
Just as Telstra needed functional separation at Layer 2, NBN is crying out for functional separation at Layer 1.
It really shouldn’t be the Federal Government that decides which states, municiplaities or streets (or electorates) get fibre or not, nor how it is delivered. Those decisions should really be made locally, along with whatever level of subsidy – if any is required – to deliver unecconomic fibre.
If the Tasmanian Government wants FTTP and they have a utlitity that can provide the necessary infrastructure – which they do – then they should be able to do so. But what they need to make that work is an appropraite guarantee that NBNCo will lease Aurora’s dark fibre to deliver NBN wherever it’s available.
In most cases this would be profitable for both parties, and in all cases statutorily profitable for NBNCo. Ultimately it would then be up to the Tasmanians to decide how much network cross subsidisation occurs in that state, or how much direct subsidy Tasmanian taxpayers are willing to extend to the less profitable sections of their network.
Probably the best article on the Tasmanian NBN rollout that I have read. A couple of points to add though.
First, in relation to Aurora Energy. Aurora already has optic fibre deployed aerially in a significant amount of the greater Hobart area so their rollout costs would actually be a lot cheaper than if they had to start from scratch. I live on the eastern shore of the Derwent in Hobart and I have Aurora optic fibre cable about 200 metres from home. It would take a very short time for Aurora to finish rolling out the fibre to most of Hobart. (Not sure about the situation in other parts of the State). The real problem facing Aurora is actually connecting houses to the network. As Visionstream has shown, even their snail’s pace rollout looks like light-speed compared to the delays in actually getting homes lit in RFS areas.
Second, is the infrastructure hand grenade lying at Turnbull’s feet with its pin out. The appalling state of Telstra’s copper network in Tasmania is among the worst in Australia. Infrastructure maintenance and upgrades in this State has been negligible over the past 50 years. Roads and telecommunications infrastructure in particular are falling apart. Even connecting Tasmania to the FTTN will be a costly and time-consuming exercise. I am not sure that Turnbull fully understands this and until he does the risk for the LNP is that the whole NBN project will one day blow up in his face.
Excellent article and good comments. Delimiter at its best.
“The NBN has always been a fantastic dream. But all dreams must end as we wake to grisly reality. This project has been mismanaged by Labor, and is about to be screwed over wholesale by the Coalition.”
That is the nub of the problem. A Labor pipe dream left to the Libs to fix. Something that could never be, drawn up on a domestic flight to garner votes, that was unachievable. Overpromised with no financial reality. We need to dump that vision and start again with a compromise. Something workable and achievable. We have to settle for less.
+1
Uh… Explain again why it was “unachievable” and had “no financial reality”? Or how anything has been left to the Libs to fix? Are you seriously incapable of seeing the Libs dismantling a project that was full steam ahead just to construct a network that will end up being far more expensive in the long run?
One might imagine that the government had never heard of the dangers of ‘big bang’ deliveries of technological products (e.g. Tom Gilb), particularly in an environment when there are a lot of unknowns and a large number of people engaged who don’t understand the real challenges involved.
The result is a skimpy analysis of the situation followed by high-pressure propaganda to install one particular type of Australian network, to the exclusion of others being promoted by a lawyer (Conroy) who appeared to only understand the technology to the extent of being a subject of sales initiatives.
Here are a few pertinent facts.
1) Australia defines telecommunications as ‘non-essential’. Result – underdesign and too many compromises.
2) Many areas of Australia are communications black spots – no mobile, no phone line. Result total lack of knowledge about particular areas and isolated communities and citizens.
3) The world is tending to mobile telecomputing and indoor environments are moving to wireless networks. Result – perhaps not the best time to string some of the most expensive wiring available all over Australiia.
In my book I’d want to start anything like this on a controlled scale perhaps first by redefining T’comms as an ‘essential’ service.
Upgrade our mobile comms so that they are available everywhere (4G delivers 15 Mbps in my rural area of Tasmania).
Consider fibre as the base network infrastructure, with mobile and ADSL as the main offers until a deeper understanding of the issues is obtained.
“3) The world is tending to mobile telecomputing and indoor environments are moving to wireless networks. Result – perhaps not the best time to string some of the most expensive wiring available all over Australiia.”
And what do you think we need to connect up all our shiny new GigaBit WiFi-AC hotspots and LTE-Advanced mobile Towers???
Fibre of course!
PS, learn to spell Australia FFS!
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