Turnbull must quickly fill his NBN policy holes

By
Renai LeMay
-
83

opinion Last week Malcolm Turnbull outlined a telecommunications policy which could become a credible alternative to Labor’s NBN juggernaut. But for all its surface-level attractiveness, the Liberal MP’s vision is far from complete — and unless the holes are plugged quickly, it will die a quick and painful death.

The extent to which Turnbull has not fleshed out his ideas became evident last week during a wide-ranging interview on Sky News, in which a number of News Ltd commentators had the chance to pinion the Earl of Wentworth on diverse matters. After garnering Turnbull’s thoughts on world economics, internal Liberal Party politics, workplace relations laws and more, his questioners (somewhat reluctantly, it seemed) turned their attention to broadband.

Turnbull was given the chance to expansively put his view forth on Labor’s NBN project; and as per normal, he didn’t disappoint.

The NBN was “enormously expensive”, he said, with the Government spending “tens of billions of dollars more … than they need to”. The NBN would “blow out” in cost, perhaps ranging up to between “$60 and $80” billion in total. “Not enough” people would benefit from it, and “there is no application or service” which could use the terabit speeds promised.

Eventually, Turnbull said, there would be “a growing horror” at the money being ploughed into the “massively overcapitalised Government monopoly”, which will see prices go up.

Now, as with many people, I don’t always agree with the approach taken by News Ltd journalists, but in this case, the approach taken by The Australian’s economics editor Michael Stutchbury to Turnbull’s rapidly expanding bubble of hot air was extremely appropriate.”How much cheaper do you claim you will be able to do it under your plan, compared to what the Government is saying?” the redoubtable Stutchbury asked Turnbull.

“Well, the approach we will take –” the Shadow Communications Minister began to reply, before his waffle was cut off at the pass. “In terms of cost to the taxpayer. What’s your estimate?” pushed Stutchbury. Turnbull wouldn’t give a concrete estimate, noting only that “relatively small amounts of Government subsidy” would be required.

“You don’t have a number though,” concluded Stutchbury.

From here on in the interview started to resemble an episode of Yes, Minister, with Turnbull switching sides and playing the role of Sir Humphrey Appleby, rather than his usual position on the other side of the desk as the Right Honourable James Hacker. As Stutchbury doggedly pursued the question of cost, Turnbull continued to duck and weave, giving answers such as “yes and no” and retreating again and again into his safety zone of the cost of Labor’s incumbent NBN approach.

To be honest, it wasn’t one of the best performances in Turnbull’s career; although it did demonstrate the formidable depth of understanding which the former Opposition Leader can boast with regards to costing infrastructure projects — an area in which most of his predecessors in the shadow communications portfolio have demonstrated a lack of knowledge bordering on complete ignorance.

Now one problem for Turnbull, of course, is that it may prove well-nigh-on impossible to actually cost the rival NBN policy he unveiled last week in any reasonable manner.

The public investment figure required to build Labor’s NBN has varied constantly over the past several years, as the Government, then the private sector, then NBN Co itself have estimated just how much money will be required to roll out fibre, wireless and satellite infrastructure around the nation. That amount also changed again when NBN Co and Telstra reached tentative agreement on the terms of their wedding; and no doubt it will change again in future as further construction costs become more apparent.

Turnbull can obviously draw on the substantial resources to cost his proposal — party, public and personal — but with much of its framework unclear (such as the terms of any deal with Telstra), any exercise in doing so will necessarily involve a range of potential future costs.

Compared with the over-analysed NBN, this will leave Communications Minister Stephen Conroy with a thousand avenues of attack to shred Turnbull’s grand vision; a task he has already taken up with relish. Last week — prior to the release of Turnbull’s policy — Conroy issued a series of questions which he demanded the Liberal MP answer. Questions such as:

  • How much the plan will cost
  • Where the money will be found to pay for it
  • How Telstra will be recompensed for separating its operations
  • Which Government services will be sacrificed in future budgets to pay for the policy

“Until Mr Turnbull answers basic and fundamental questions about his plan to dismantle the NBN, Australians will be in no position to take the Coalition seriously when it comes to delivering faster, better and affordable broadband,” said Conroy.

I agree.

As I wrote last week, Turnbull’s plan is 90 percent win. It avoids the anti-competitive move of shutting down the existing HFC networks, allows for the long-awaited separation of Telstra, will support the bush with wireless and satellite and holds the promise of infrastructure-based competition in the telecommunications sector.

However, the proposal is far from complete, and its biggest Achilles heel is Turnbull’s refusal to answer questions about cost. This difficulty leaves Turnbull doubly exposed to Labor criticism on an issue which has traditionally been a Liberal strength: Fiscal responsibility. As Conroy will no doubt shortly begin pointing out, technically the NBN project won’t cost the Government anything. Over the long-term, it will pay for itself with a modest return to the public, courtesy of its commercial model.

Of course, there are other issues with Turnbull’s policy. The difficulty of bringing Telstra to the table for another set of complex negotiations. The need to repeal or modify the tranche of NBN legislation which Labor has introduced over the past several years. The dismantling of a rapidly growing National Broadband Network Company and the justification to the population of a nation half-fibred up and half-not.

All of these discussions constitute land mines which Turnbull has the potential to personally negotiate. But none of them will progress in any meaningful way until the former Opposition Leader is able to put a hard dollar figure on the value of his policy.

Until Turnbull can inject a really hard concrete figure into the public debate, his attractive policy will remain marginalised. For the Member for Wentworth, it’s time to stop discussing his broadband views in public for now and head back to a small briefing room where several dozen economists can work through the details of what they might cost.

Until he does that, his alternative to Labor’s NBN juggernaut will remain ungrounded, unproven and ultimately, undebatable.

Image credit: Office of Malcolm Turnbull

Related posts:

  1. Stop “hiding” your NBN policy, Conroy tells Turnbull
  2. Turnbull “evasive” on Coalition NBN policy, says Conroy
  3. Turnbull’s new NBN policy is 90 percent win
  4. Conroy slams Turnbull’s NBN policy “pretence”
  5. Five questions about the Coalition’s new NBN policy

83 COMMENTS

  1. *sigh* I just don’t care anymore. This thread is going to be overthrown by a never ending debate within a few hours.

    Likely because someone is going to say that they don’t agree that keeping the HFC networks operating is a good thing considering FTTH has the potential to perform much better, they don’t want FTTN because they believe it is a waste of time and money since you’ll be upgrading it to FTTH anyway or that Telstra have been reluctant to cooperate with projects like this in the past so what makes Turnbull think it’ll work this time?

    This will undoubtedly get the responses that no one needs the speeds fibre presents, FTTN can be upgraded to FTTH and no one wants the high speed HFC anyway, as well as pointing out that the costs of the NBN make it doomed to fail.

    Did I miss anything?

    • “This thread is going to be overthrown by a never ending debate within a few hours.”

      I don’t think it will be. I had a bit of a break over the weekend but I’m actively moderating now, and I’ve banned quite a few problem posters — Backslider, RS (all of his incarnations), Merlin and so on. I am aiming to bring discussion on Delimiter back to a civil level, which the overwhelming majority of readers want.

  2. There is no doubt that this latest Coalition plan is quite workable and would be quite functional. However, it does not address future needs in any real way.

    The Coalition have still got this idea that “broadband” and “the internet” are the same thing, and they are most certainly not. An FTTN solution still limits everyone to a single service, which might be fine for the next five or maybe even ten years.

    But once we reach the end of its useful life, we’ll have to start (mostly) all over again, have the same arguments and regulatory nightmares – (which have been predominantly overcome for the FTTH solution) – and then spend time doing it.

    In the meantime – other countries will beat us to the punch, and we’ll slip behind in the world economy. I’m sick of Australia settling for second best in things.

    What’s wrong with leading the world?

    • @Micheal Wyres

      “However, it does not address future needs in any real way.”

      If you can define what the future needs are that ONLY can be fulfilled by a 100% taxpayer funded FTTH rollout I for one will be glad to hear them.

      “The Coalition have still got this idea that “broadband” and “the internet” are the same thing, and they are most certainly not.”

      Not sure where you are going with that, and how you determine the Coalition have got that ‘idea’ you say they do.

      “An FTTN solution still limits everyone to a single service, which might be fine for the next five or maybe even ten years.”

      So those what is going to happen in 2015-2020 to all those countries actively rolling out FTTN in 2011 and all the preceding years before this one, and why will Australia have the edge on the world economic stage after that time period because the Labor choice was an all FTTH solution?

      “But once we reach the end of its useful life, we’ll have to start (mostly) all over again, have the same arguments and regulatory nightmares – (which have been predominantly overcome for the FTTH solution) – and then spend time doing it.”

      Well they have not been overcome for the FTTH solution yet, Telstra and the ACCC have yet to ratify the all important Telstra deal, also unless the present world share price plunge and financial uncertainty fixes itself before October which is only 2 months away I can see some very nervous Telstra shareholders looking at the NBN deal with some trepidation.

      “In the meantime – other countries will beat us to the punch, and we’ll slip behind in the world economy.”

      What countries do you have in mind that will ‘beat us to the punch’, and how will this drag Australia behind if we don’t go 93% FTTH?

      “What’s wrong with leading the world?”

      All it takes to lead the world is to roll out fibre? – I thought there was more to it than that, I am sure Obama wishes it was that easy.

      :)

  3. That’s just one of the problems with Turnbulls patchwork plan is that not even he knows what it is and they expect voters to take them seriously on this issue. lol. All Turnbull can say is “We have to play the cards we are dealt” that basically means “I dont know how much of our patchwork will be FTTN, FTTH, HFC and wireless or how much it will cost but vote for meeeee!!! yay!!! gigglebytes!!!”

    • The problems is he DOES know. All he has to do is yell “theirs costs $26B and ours costs $10B” and the average voter – (who wouldn’t know a router from a shopping trolley) – will think it’s better.

      A FTTN solution locks us into an expensive upgrade cycle over many years. The FTTH solution doesn’t eliminate upgrade costs, but over a 30 or 40 year life cycle will be much cheaper.

      • I tweeted Malcolm Turnbull a link to the Wall Street Journal article below, and to his credit, he replied.

        “Australia Can Build Its Way Out of Trouble”
        http://online.wsj.com/article/SB10001424053111904140604576493831749969702.html

        Quote: “If the resource-rich nation is to compete with the fast-growing, diverse economies of Asia and not serve merely as a supplier of raw materials, the government needs to fund new highways, high-speed rail networks, ports and utilities that will serve its growing population and help it to diversify away from a worrying dependence on mining … Some ambitious projects are already under way, like the recently approved US$36 billion plan to build a nationwide high-speed Internet system known as the National Broadband Network.”

        Turnbull’s reply: “agree as long as it passes a rigorous cost benefit analysis unlike the nbn.”

        So it’s back to the CBA – and a more malleable concept can scarcely be imagined (what is “cost”? what is “benefit”? how are they quantified (or not)? and over what timeframe?) Change the input settings, and you pretty much determine the outcome you want.

      • @Micheal Wyres

        “A FTTN solution locks us into an expensive upgrade cycle over many years. The FTTH solution doesn’t eliminate upgrade costs, but over a 30 or 40 year life cycle will be much cheaper.”

        Any figures to support this claim or is just trust me I have a gut feel about these sorts of things?

          • This is fun.

            “[19] I note that the advice I received from all parties I discussed this matter with in New Zealand affirmed that the Telecom NZ FTTN rollout reduced materially the cost of moving to FTTH – and rejected the view put around by NBN that the investment in FTTN is entirely wasted if a later decision to go to FTTH is made.

            [20] This is in fact how the funding for the FTTH rollout in New Zealand has been provided – the total amount of Government funding is $1.35 billion and the net cost to the Government is estimated to be $600 million taking into account the preferential funding terms.

            [21] There is extensive literature on the cost differential between FTTN and FTTH. For some more examples see a 2008 report by Analysys Mason, stated that deployment of FTTC in the UK by the incumbent had a capital cost of approximately 20 per cent of FTTH at all points along the curve from low-cost to high-cost premises. “Although there are clear benefits for both operators and users in taking fibre to the home, the level of cost involved suggests that FTTC is likely to be the predominant technology deployed in most areas.”

            Analysys Mason / Broadband Stakeholder Group – The Costs Of Deploying Fibre-based Next-Generation Broadband Infrastructure – Cambridge, 2008

            A report by WIK Consult for the European Competitive Telecommunication Association, also in 2008, estimated that FTTC costs per premise were $690 in Germany and $530 in Sweden. Costs for FTTH were roughly four times higher at $3100 in Germany and 3.5 times higher at $1900 in Sweden.

            WIK-Consult / ECTA – The Economics of Next Generation Access – Bad Honnef, 2008”

            http://www.malcolmturnbull.com.au/uncategorized/address-to-the-national-press-club-australia/

          • It’s not Malcom Turnbull, but you know that, they are all references to external sources on FTTN vs FTTH costing.

            oh, hi RS.

          • @Julia Abbott

            “unlikely to provide an efficient upgrade path to fibre-to-the-premises
            (FTTP), because of the high costs of equipment associated with rolling out
            a FTTN network that would not be required for a FTTP network (i.e. FTTN
            is not a pre-requisite for the provision of FTTP); and”

            even assuming that “equipment costs” are higher, the real savings of FTTN are achieved by delaying the replacement of the last-mile which is mostly LABOUR COSTS. of course, the gubmint report fails to consider the elephant in the room.

          • “even assuming that “equipment costs” are higher, the real savings of FTTN are achieved by delaying the replacement of the last-mile which is mostly LABOUR COSTS.”

            How can you say that? By delaying building FTTP NOW to a much later date is going to make labour costs much more expensive. The overall costs of the project must only get more expensive because of the labour side of it. And there will be more (premises) of it to build FTTP to connect to in say 20 years compared to doing it now. After all the end game has to be FTTP in the long term, and I don’t mean 50 years from now.

          • This statement is so unedcated it isn’t funny

            For one thing, if anything, FTTH rollouts in the future will be cheaper as the technology price in deployment decreases and extra machinery is invented to make FTTH rollouts cheaper

            Secondly, Labor costs don’t magically increase because you say so, they can but they also can’t. In all likely hood, we are actually at the tip of the iceburg currently regarding labor costs, its unlikely they will go up any higher. Labor costs are also very proportional and sensitive to current GDP and labor laws, of which technology costs have nothing to do with

            What we can be almost certain is that the technology costs for FTTH will decrease. Labor costs are likely to decrease or stay the same. If someone comes up with some mechanism for greatly reducing labor cost for FTTH deployment, that will have a significant impact in reducing the cost of FTTH rollouts

          • @AvidGamer

            *By delaying building FTTP NOW to a much later date is going to make labour costs much more expensive.*

            the savings from minimising capital outlays are “real”. the inflation component is just a scaling factor that affects all real variables equally — the debt servicing burden also has a “real” component and a “nominal” (inflation) component. rising inflation will compound the extra interest servicing burden of building FTTH.

            *And there will be more (premises) of it to build FTTP to connect to in say 20 years compared to doing it now.*

            you mean if we build FTTH to 10mln premises now…. as the number of premises increases, the fibre in the ground will automatically stretch itself and tunnel its way into the newly-built premises w/o NBNco having to spend a single dollar?

            interesting.

            *rolls eyes at alain*

  4. Two words “short” and “sighted”.

    It is like the way the Opposition are putting up alternatives to the CPRS. They don’t believe the problem exists so they really don’t have their heart in the solution – their passion is all about recapturing power and these pesky issues are just getting in the way.

    If they can use the arguments as weapons to beat their foe over the head then it suits them – but they can’t actually have the passion to come up with fully functional alternative answers to problems they don’t believe actually exist.

    This is all just a philosophical argument to them because they don’t really believe “government” should be involved in infrastructure building at all – so why don’t they be honest and say that instead of offering lame, uncosted projects they will scrap as soon as they grab power.

  5. To be fair the Coalition have until two weeks before the 2013 election to revise their policy, update it, change their mind all together, scrap the FTTH, NBN keep the FTTH NBN, scrap the HFC keep the HFC, think about producing a CBA then deciding not to, and to cap it all off they can even change their policy totally after being elected.

    The effect on the outcome of the 2013 election? – zero, nada, zilch!

    • Broadband had a big effect on the outcome of the last election. It got Labour over the line!

      • Incorrect, it was a hung Parliament, neither major party got the required majority to form a Government, the Independents got Labor over the line and into power and they determine the outcome of every single piece of legislation that needs to be passed in the Lower House until the next election, when they may or may not hold the balance of power again.

        If you take it on a pure communications policy basis the Coalition went into the election with a scrap the NBN policy, so as many that voted didn’t want it as wanted it.

        • You cant say I am incorrect and then say Labor got over the line.

          The Independents all cited the govts NBN as one of the key factors that aligned them with Labor, and that got Labor over the line. Thats why Julia is in the Lodge and not Tony. Simple as that. The Libs should have learnt a hard lesson there about the importance of a good comms policy. It would seem they still havent.

          • Incorrect, it was the the reason two of the Independents Windsor and Oakshott put forward, although Oakshott has backed down a lot from that position since then, of the other two Katter voted for the Coalition and Wilkie sided with Labor on a promise of a $565 million Hobart Hospital upgrade and the promise of gambling reform the Committee of which Wilkie is the Chair.

          • “Wilkie sided with Labor on a promise of a $565 million Hobart Hospital upgrade”

            The way I remember it, at the time the story went that Abbott actually offered Wilkie over 1 billion dollars for this very same hospital in order to secure Wilkie’s vote. This is close to double what Gillard offered Wilkie at the same time. Wilkie then in fact came out and told the media about the fantastic and uncosted sums of money Abbott was putting on the table, apparently he was very concerned where this extra money was coming from especially in the light of the Liberal budget “black hole” at the time. He eventually sided with Labor, citing the NBN as well as a fully costed and more sensible offer of 500-odd million dollars for the hospital as key factors in his decision.

            It’s been a while but I believe that was the rough sequence of events.

            Basically the NBN was one of the key factors that eventually secured Labor the government through the independents. So out of the 4 deciding MPs (Windsor, Oakshott, Katter and Wilkie), the NBN was a major factor in the decision of 3 of those to eventually support Labor (among many other reasons of course). So continually saying “Incorrect” is inaccurate at best.

          • Yes I know what Wilkie said, it was in list of his reasons of which the NBN was one of many, I was referring to Oakshott and Windsor saying it was a major reason they sided with Labor.

            I was also emphasising how the electorate voted on polling day which resulted in a dead heat hung Parliament with each major party ending up with 72 seats each, not the horse trading that went on post election for weeks and weeks with Gillard and Abbott tap dancing around the Independents with a box of presents with Gillard ultimately winning the prize.

          • While I am personally a supporter of the NBN, I firmly believe at the time of the last election that for the general voter (say someone who has no particular interest in IT one way or another) that the NBN wasn’t one of the issues at the forefront of voter’s minds other than the fear of the price tag. I say this based on my recollection of the mainstream media coverage leading up to the election (things like work choices, immigration, kevin rudd etc got far more air time).

            But what i’m getting at is that this is why we have elected representatives to make the right decisions for the good of their electorate and the country. So while it did end up split down the middle, we have no way of knowing the individual weight of the multitude of reasons why the votes fell as they did. Ultimately these elected MPs made their decisions based on the evidence infront of them for the good of their electorate and the country. And they picked the NBN as a key reason as they felt it was a positive thing for the future.

            I’m not saying its the best way to decide elections, but hey its what we’ve got – horse trading and all.

          • The matter of fact is, unless you are predicting a hung parliament situation for next election, which is probably close to impossible, broadband will not have any significant impact whatsoever for the electorate (there was even a poll posted by Tel earlier which showed, for a national average, that NBN was the lowest priority)

            NBN got labor over the line due to the hung parliament situation, something that is historically rare. Its not going to happen again (or at least for the foreseeable future)

          • In reality I think what got Labor over the line was Gillard has better negotiating skills than Abbott, and she still does, it’s as simple as that.

            If Turnbull had been Leader at the time it would have been a much closer negotiating race.

        • “If you take it on a pure communications policy basis the Coalition went into the election with a scrap the NBN policy, so as many that voted didn’t want it as wanted it.”

          Sorry?

          Coalition do not consider Broadband (of any sort) an important consideration. One might suggest a reasonable percentage of their constituency don’t care, either. Those that did, likely voted for a pro NBN party.

          Given the forced nature of voting, there is also a high degree of apathy (voting because you must, often has different outcomes to voting by choice).

          When in doubt, the Coalition fall back on “CBA” when their own policies just don’t hold up to modern scrutiny. And that’s the problem Turnbull has. They have established a history of under-investment in the telecommunications sector. You can’t turn back decades of recalcitrance over-night; Turnball’s fall from grace over Climate change (and the eventual leadership spill) is evidence of that.

          When the Coalition *did* actually pump some money into the sector to re-energise, Telstra absorbed most of it, rendering the investment effectively dead.

          Of course, none of this is news to anyone.

  6. Turnbull is being decidely sneaky. He is matching apples to oranges comparing his patchwork network to the NBN. If he was ridgy didge about it, he would compare the cost of getitng his network up to FTTH. He would explain why he thinks its good to invest in FTTN when its wasted money as an upgrade to FTTH would mean scarpping FTTN and starting over. Turnbulls plan will actually be far more expensive when viewed in these terms, and it would also take many many more years to get to the FTTH outcome (though I suspect it would never happen at all outside some cherry picked areas). The expert panel that looked at the previous NBN plan said that FTTN was a wasted investment. If Turnbull is so keen on following the NZ model, why isnt he at least trying to match the 75% FTTH they are rolling out?
    Turnbull also needs to explain how Telstra is not going to end up building all this network. For any company to build FTTN, other than Telstra, it would require compensation payments to Telstra for severing the copper. Again, this was one of the reasons the previous NBN plan never went ahead. It was determined it was better to invest this money in FTTH infrastructure than pay it ot Telstra as compensation, and end up with a FTTN that had to be upgraded to FTTH anyway. Turnbull needs to explain why he is ignoring the advice that has been used in determining FTTN is not the way to go.

    So many questions. So few answers. Its almost as bad as Tony Smiths last effort. I think Tony Windsors wisdom in saying, do it once, do it right, do it with fibre is the most sensible thing that has been said in all the years of this debate.

    • Oops forgot a bit.
      I would also like to know how Turnbull plans to promote the infrastructure competition he keeps saying he is trying to maintain when he is hoping Telstra will build the network? When Telstra was planning to build FTTN previously, they were only going to use cabinets big enough to fit their own equipment. That isnt conducive to infrastructure competition. Telstra have a very long anti-competitive history. If they take the reigns of a new “practical” monopoly, no one will want to build against them, and we will end up paying Telstra prices and competiiton will have to work on Telstra terms, which we have seen for the last decade and a half, is bad.

    • I agree.

      The endgame is FTTH, whether in 10 years or 50 years. Turnbull should be giving the total cost for his FTTN venture which must include the subsequent upgrade to FTTH otherwise it is misleading. He can take a discounted cost for building FTTH at a later date too. But 70% of the NBN is civil works which will not decrease over the years, this figure will increase due to salary increases. The 70% figure is his estimate, not mine.

      http://www.malcolmturnbull.com.au/blogs/nbn-roll-out-could-be-slowed-to-help-fund-flood-reconstruction/

      If he can prove to us that by building FTTN now and upgrading later to FTTH at a later date that this is a cheaper alternative then I am all ears but I have big doubts on this.

      • “If he can prove to us that by building FTTN now and upgrading later to FTTH at a later date that this is a cheaper alternative then I am all ears but I have big doubts on this.”

        But he will not have to. It will be in the private sectors hands and completely off the govt books (except in terms of GDP or whatever). Unfortunately Turnbull has a clue, but his vision is too myopic to be forward thinking. BEST thing he could do would be modify the NBN to have FTTN where HFC isnt and have it planned in to be replaced in the future, ensure it is black spots and not political blackspots that get attention first, places with zero competition/choice next and then the rest. But I doubt he would take this view.

  7. The reality is, with respect to a fast Broadband service, is that it’s not a key driver for the Coalition.

    To be blunt, they do not care. Decades of under-investment (the Coalition is not known for social expenditure!) in the existing networks and a general lack of interest, is born out in very real history.

    That isn’t going to be rescinded overnight. It’s not a concern. It’s never been a concern, odds are, it never will be.

    • @Brendan

      “The reality is, with respect to a fast Broadband service, is that it’s not a key driver for the Coalition.”

      Perhaps they don’t think the concept a fast Broadband service is only fulfilled by a $43 billion FTTH build, nor do they think it will have any detrimental effect as to whether they govern or not post 2013.

      “Decades of under-investment (the Coalition is not known for social expenditure!) in the existing networks and a general lack of interest, is born out in very real history.”

      So everything was all ok under previous Labor Governments?

      “That isn’t going to be rescinded overnight. It’s not a concern. It’s never been a concern, odds are, it never will be”

      It’s never been a concern? that’s why Turnbull brought out the first real draft of a Coalition policy 2 years before the actual election and what we are discussing in this and the other Delimiter blog solely devoted to it and also in other tech forum websites.

      • “Perhaps they don’t think the concept a fast Broadband service is only fulfilled by a $43 billion FTTH build, nor do they think it will have any detrimental effect as to whether they govern or not post 2013.”

        Actually they have no interest in Fast Broadband. This is backed by several terms of inaction and rhetoric.

        It’s really that simple. And it’s that lack of forward thinking that prevents the Coalition from forming a sane alternative option; it’s not a key objective. As I have said. As has been clearly illustrated. Paint it any way you like, the outcome is the same.

        “So everything was all ok under previous Labor Governments?”

        Didn’t say it was. Having said that, the Libs governed over four terms. Eleven years, between 1996 and 2007. Eleven years to make a choice. Eleven years to decide to invest. Eleven years to make a difference.

        Coonan finally decided a half-arsed solution at the eleventh hour. Ironic.

        “..that’s why Turnbull brought out the first real draft of a Coalition policy 2 years before the actual election and what we are discussing..”

        Turnbull is not in the leadership circle. He suffered a spill, remember? And 2 years? The coalition is *still* deciding quite how their policy is defined. It changes every other day of the week.

        The Coalition has not taken the DBCDE seriously, indeed deriding the policies and falling back on “CBA” has been the order of the day — that is — up until it’s become apparent the NBN isn’t actually faltering, it is actually happening, is gaining speed and in fact is actually something “the people” might actually give a sh*t about.

        • @Brendan

          “Actually they have no interest in Fast Broadband. This is backed by several terms of inaction and rhetoric.”

          As distinct from the ‘Labor action’ where we are into the second term of this Labor Government and we have 14 residences in all of Australia using the NBN, and a voice service is not available yet, and the crucial Telstra and Optus deal has yet to be signed off, yeah right it’s going gang busters out there!

          “Paint it any way you like, the outcome is the same.’

          In all probability they will win the next election without any BB policy at all is that the outcome you mean?

          “Didn’t say it was. Having said that, the Libs governed over four terms. Eleven years, between 1996 and 2007. Eleven years to make a choice. Eleven years to decide to invest. Eleven years to make a difference.”

          How has that had a detrimental effect on Australia’s economic position today?

          “Coonan finally decided a half-arsed solution at the eleventh hour. Ironic.”

          What is also ironic is the Rudd and Conroy dumped their half arsed 2007 BB election promise after they were elected, but that’s ok I take it?

          “Turnbull is not in the leadership circle.”

          Really? The shadow Minister for Communications and Broadband is not in the leadership circle. LOL

          ” It changes every other day of the week.”

          So what? – we are two years away from another election, it’s not as if you are voting on Saturday, why do you care if the policy is modified again?

    • I stumbled on that about 45 minutes ago, but have been too busy this afternoon to sit down and read it properly yet, but it does sound like a move towards Simon’s model, though not completely.

      A reasonable compromise. The only other way would be to reduce the number of POIs – (I think it should be 66, NBN Co and others wanted 14) – but the ACCC has us on somewhere between 120 and 122 – (the number has moved a few times during final design).

      Don’t believe the change was needed, but as Simon says in the article, NBN Co have listened, and made an adjustment. The more ISPs are comfortable, the better. Internode is in that funny position between being “big” and “small”, and some areas were going to work a lot better for them than others.

  9. All that we can hope for is that the project will be to far along to be cancelled, I am betting it will be. It was only a few months ago that the liberals starting talking about the complexity of unwinding. Since then they have upped the policy to FTTN which is still a shambles, however moving more towards the light.

    Feels a bit like they are just saving face and trying not to look like complete idiots after their previous broadband policy disgrace. As each month passes and the NBN gains momentum the task of unwinding will be massive by the time we hit 2013. Once they get into office, they will come out and say they can’t unwind it due to labor making it to difficult. Then any little hiccup they will shout from the rooftops that it is labor’s fault, and take the credit when it is proven to be a necessary and successful due to their magnificent monetary & managerial prowess. It will be a win win situation, forced to keep the NBN due to labor, if it is successful take credit, if it fails blame labor. Sounds like a no brainer to me!

    PS As a life long liberal supporter, I jumped ship along with my entire family due to the NBN. So by no means am I a labor supporter, voted on policy. If the NBN was locked in under liberals I would be back in a heart beat.

  10. Can I just say, I don’t think anyone is actually listening to the coalitions proposal.

    Seriously? are we reading the same proposal here? Or are you labelling what we have now in Australia Infrastructure competition … Because I would be labelling what we have now in Australia as Infrastructure competition for 1996, and a failure of the market for 2011.

    Where in an FTTN network, is there any room for infrastructure competition. Indeed, I think an FTTN network would remove what little infrastructure competition we currently have (in the form of competitor ADSL Dslams).

    Don’t misunderstand me, I am not saying an FTTN upgrade would be a bad thing compared to the current network in terms of speed etc, but it really sounds to me exactly like the current FTTP proposal in terms of “infrastructure competition” except our now ceased-to-be-expanding HFC networks are left in place .. to err, compete (with that 20% of users that actually get a competitor .. Lucky them now, and luckier them in the future it seems).

    An FTTN would disconnect all of that competing DSLAM hardware, and replace it with an incumbent owned network that would be wholesaling. Same as NBN Co. Except now we have FTTN cabinets down everyones street.

    As far as I can see the coalitions proposal does anything but increase competition. All it does is increase consumer confusion, what kind of internet access will I get here?

    As far as the NBN, for all its faults that people claim it has, not one of them is resolved in my opinion by the coalitions policy. Least of all the answer of “How much will it cost”. (Which according to the coalition goes up by 10 billion dollars every week.)

  11. The biggest question for me is “Are we just looking at the NZ approach to an NBN or are we looking at the approach and the end result of 75% FTTH, 18% FTTN and 7% satellite/wireless?”.

    If it’s just the approach then he doesn’t have a policy. If it’s also the end result then we’re down to “How?”.
    – how is he going to change policy/regulation to get companies other than Telstra to invest in last mile infrastructure when they haven’t done so before?
    – how is he going to get Telstra to drop the deal with the NBNCo and separate to create the Network Co?
    – how is he going to regulate wholesale access prices to make access more affordable than the NBN and still encourage private investment?
    – how is he going to get the rest of the Coalition to support his policy?
    – how is he going to answer any of these questions?

    Here’s a tip for him … come out strongly against the governments data retention and filtering proposals. That might stir the pot for Conroy and get people to listen to Turnbull’s broadband ideas.

    • *The biggest question for me is “Are we just looking at the NZ approach to an NBN*

      the reason why MT references NZ is to highlight that the typical approach towards broadband upgrade in other countries involves much less ambitious approaches, in terms of both outcomes and taxpayer burden.

      *or are we looking at the approach and the end result of 75% FTTH, 18% FTTN and 7% satellite/wireless?”.*

      there’s a snowball’s chance in hell that “private sector” will even consider 75% FTTH.

      *how is he going to change policy/regulation to get companies other than Telstra to invest in last mile infrastructure when they haven’t done so before?*

      the only competitor that has the financial clout to invest in any meaningful last-mile infrastructure would be Optus. truth be told, they have ZERO interest in spending a single dollar on fixed-line networks. for instance, the Optus-sponsored G9/Terria consortium’s FTTN proposal was mostly reliant on external private equity funding (which, of course, never materialised).

      *how is he going to get Telstra to drop the deal with the NBNCo and separate to create the Network Co?*

      in the telco game, Telstra holds all the “aces” (in terms of infrastructure ownership, customer base, etc) — the only thing that “trumps” Telstra’s unique hand in terms of “forcing outcomes” is the card that Labor has played, i.e. “massive government spending” (or “throwing money at Telstra”).

      one can imagine a possible scenario a couple years down the track, when billions of taxpayer dollars have been flushed down the fibre drain with little subscriber revenue to show for it (amidst a series of unending cost blowouts) that the political/taxpayer appetite for this project will disappear altogether…. under such circumstances, any politician that simply pledges to dissolve the project, without offering an alternative, will be heralded as a “saviour”.

      by then, the public will have lost all interest in any further publicly-funded internet upgrades, and the only people whinging about a “job half-done” will be the same people currently whinging about FTTN being a “half-assed approach”.

      *how is he going to regulate wholesale access prices to make access more affordable than the NBN and still encourage private investment?*

      the biggest flaw of Labor’s NBN is that it’s way too ambitious — you have to massively scale-down the current NBN model to make it even remotely “affordable” for consumers and “viable” as a private investment with limited public subsidies.

      • … the only competitor that has the financial clout to invest in any meaningful last-mile infrastructure would be Optus.

        I completely disagree. There is absolutely no reason for last mile infrastructure to be deployed on a nation-wide basis, nor is there any reason for either the technology or the ownership to be homogeneous across the entire country.

        Local last-mile providers could easily be profitable if there was the legislative support to allow them to operate. The thing is, Telstra was sitting on a monopoly position making it very difficult for any local competitors to get a foothold, because Telstra already had copper in the ground. Now we have NBN and last-mile competition is even more difficult.

        • *There is absolutely no reason for last mile infrastructure to be deployed on a nation-wide basis, nor is there any reason for either the technology or the ownership to be homogeneous across the entire country.*

          e.g. greenfields FTTP, Telstra/Optus HFC, etc.

          *Local last-mile providers could easily be profitable if there was the legislative support to allow them to operate.*

          1/ it’s hard to compete against $16/mth ULL or $2.50/mth LSS;

          2/ if someone tried to cherry-pick Telstra’s copper footprint by laying FTTH in high-demand areas, Telstra would immediately roll over the top of them.

          *The thing is, Telstra was sitting on a monopoly position making it very difficult for any local competitors to get a foothold, because Telstra already had copper in the ground.*

          it didn’t stop Optus from rolling out HFC.

          *Now we have NBN and last-mile competition is even more difficult.*

          largely due to anti-competitive legislation.

  12. Wow. A reporter at The Australian didn’t immediately agree with Turnbull in regards to the NBN? That’s a first. The Australian has written dozens of anti-NBN articles lacking any fact and full of bias, and now they ask a good question?
    Hmm.

  13. Turnbull must? Really?

    Have you looked at the polls lately? If they are even roughly right then all Turnbull needs to do is sit around and scratch, Libs will still win the next election. Of course, poll can turn around, but it would take a very surprising event in this particular case.

    As for costings, well Turnbull is set to inherit a half-finished NBN with all sorts of supplier contracts (secret contracts that is, possibly commitments many years into the future), who knows what uptake, who knows what progress on the rollout? So it’s bloody stupid to expect Turnbull to put an exact figure on dealing with a situation that is full of unknowns and even the ALP don’t actually know where they will be in two years. Besides that, an election could in theory be called at any time.

    Maybe both parties should start by sitting down and making a clear statement of what they are attempting to achieve and why. That’s no doubt a big ask.

  14. Mind you it won’t be possible to cost Turnbulls policy for various reasons
    1. The opposition has no access to the Treasury or Productivity Commission until the government enters caretaker mode (i.e. election is announced)
    2. NBN is completely shacking up the industry, making it practically impossible to give an accurate cost (as In he cold give a cost now, but because of what will happen in the future the cost may significantly change)
    3. Because of point #1, the coalition would have to allocate their own private funding to do a detailed analysis, these costs hundreds of thousands if not millions of dollars

  16. *The NBN would “blow out” in cost, perhaps ranging up to between “$60 and $80″ billion in total.*

    that statement is very credible and is based on privately-expressed opinions of longtime industry operators.

    it’s actually not that difficult to reconcile.

    we know from costings (of a couple of years back) that building FTTN to 66% of premises plus wireless for the remaining third would entail capital outlays of just under $10bln. also, Sol Trujillo dropped a bombshell in remarks made in Paris that 95% FTTN would cost at least $15bln. (this was corroborated by similar estimates put out by Pipe Networks.) after factoring in the inflation in labour and equipment costs over the intervening years, it’s a reasonable assumption to infer that 93% FTTN would cost in the vicinity of $15bln.

    the Analysys Mason Report done for the UK Broadband Stakeholders Group indicated that FTTH generally costs 5 times more than FTTN. on a more granular level, the cost differentials also widen as you move from urban to remote areas. if you multiply the $15bln estimate for FTTN by 5, you arrive at $75bln — this is just the cost of the fibre network itself for 93% of premises (i.e. excludes wireless and satellite).

    it’s amazing how some people think that the onus is on MT to justify his offered policy alternatives, when any rational, objective observer would conclude that the real onus is still very much on the Government to justify its present NBN policy (despite the deliberate efforts of NBNco to spread lies and misinformation about the viability of 93% FTTH).

    • The hypocrisy on the call on Turnbull for a CBA is even more pronounced when you look at the history of the NBN handing out financial information and predicted costing.

      The 2010 hung Parliament election was held on the 21/8/2010, the NBN Business Plan (not that could define that as a CBA) was published on the 20/12/2010, four months after the election.

      With that sort of precedent Turnbull doesn’t have to provide any costing figures until AFTER the 2013 election.

  17. How long since Turnbull actually occupied the Opposition Leader’s chair as shown in the article’s accompanying picture? :)

    • Yes, Alain, the picture really is a piece of history, isn’t it? :)

      What a different place Oz would be now if those two still occupied those chairs!

      • Agreed and I wouldn’t mind if either were PM, personally.

        As for the two we have now!

        What a sham(e).

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