news A senior telecommunications analyst has praised the Coalition’s new telecommunications policy as being worthy of respect, while warning the fallout from its commitment to halting Labor’s flagship National Broadband Network project would remain its biggest problem if it took Government in the next Federal Election.
In early August, Shadow Communications Minister Malcolm Turnbull gave a landmark speech to the National Press Club in Canberra in which he outlined a new telecommunications policy approach for the Coalition, focusing on separating Telstra, developing the existing HFC cable in urban areas and using wireless and satellite solutions to serve the rest of Australia.
In an extensive analysis of Turnbull’s new plan published this week, Informa senior analyst Tony Brown wrote that the Coalition’s previous policy — announced during the 2010 Federal Election and predating Turnbull’s role in the portfolio — featured such ineptitude that “it looked like it had been drawn up on the back of a napkin at a cocktail bar”. However, Brown said his first reading of Turnbull’s new approach showed that “it at least gets the Coalition a seat at the adults’ table”.
On the upside, the analyst noted, the policy was cheaper than the current NBN model, and Turnbull’s approach of targeting current broadband blackspots and attempting to boost national speeds quickly through HFC was “a well-targeted counterpunch to the NBN’s current 10-year deployment timeframe”, which he noted would leave many Australians with sub-standard speeds while the network was being built.
In addition, Brown praised Turnbull’s plan to maintain the existing copper and HFC cable networks, noting the planned closure of the networks “has left even some NBN-friendly commentators squirming”.
However, the analyst noted, Turnbull has not yet outlined how he plans to separate Telstra, and under the plan the company will likely still have a huge role in Australia’s wholesale telecommunications market. Turnbull’s plan wouldn’t target those in outer metropolitan areas, who might be only receiving low ADSL speeds, Brown added, and most importantly, the task of “untangling” the NBN, which may take most of the Coalition’s first term in Government, would be “daunting”.
“It is possible that Turnbull will spend his entire first term as communications minister without even getting his own [New Zealand-style] deployment off the ground, simply because wading through the legal and commercial minefield of renegotiating a deal with Telstra – not to mention renegotiating with other operators, such as Optus – would chew up so much time,” wrote Brown.
Brown has nailed it with this superb analysis of Turnbull’s new policy. There is no doubt, as I have previously written, that the Coalition’s new policy approach has legs, and it does represent a viable alternative telecommunications policy … something the party had lacked for a few years now.
Furthermore, I like the fact that we now have a choice between two telecommunications policies which are largely drawn down political lines. Labor has taken its standard, big government, big spending, highly regulated approach with its NBN policy. In contrast, we have a more minimalist approach from the Coalition which acknowledges and tackles market failure where it exists, but aims to stimulate the private sector into investing in competitive solutions where it hasn’t.
However, and this is something I’ve also consistently argued, and as Brown noted, the Coalition’s biggest headache is the threat that the NBN rollout will have gained a substantial head of steam by the time the next election rolls around. It will be very, very hard for Turnbull or any other Communications Minister to stand up on national TV and cancel the NBN … when some 1.7 million households already have it, and the entire industry has restructured itself around the project.
The NBN has always been a substantial industry restructuring initiative wrapped in a sweet coating of juicy populist policy (100Mbps to every home). It will be fascinating to see how strong a future Coalition Government’s resolve is if that populist policy turns out to be very popular indeed.
Image credit: Office of Malcolm Turnbull