Abbott faces down Tassie NBN supporters


news Opposition Leader Tony Abbott has stared down harsh criticism of the Coalition’s rival broadband policy in a tense community meeting in Launceston, where the Labor Federal Government’s popular National Broadband Network was one of the topics being discussed by Tasmanian residents.

Tasmania has for some years been a key battleground state in terms of NBN politics, with the state being chosen as one of the key early stage rollout zones for the NBN due to its current poor levels of telecommunications infrastructure and competition in the telco sector, which remains dominated by former monopolist Telstra.

A landmark report handed down in July 2011 into the Coalition’s loss in the 2010 Federal Election highlighted a failure to adequately respond to Labor’s flagship National Broadband Network plan as a key reason for losing valuable votes, specifically naming the Tasmanian electorate as a highly sensitive area on the issue.

“The failure to properly explain the Liberal Party’s broadband policy and the Labor Party’s effective scare campaign was a major cause of the party’s failure to win seats in Tasmania,” the report produced by Sydney academic Julian Leeser stated. “This was the nearly universal review of people making submissions to the review and is borne out by research undertaken by the Liberal Party.” “In the view of many, the party’s policy amounted to a threat to come into people’s homes and rip the Internet out of the wall.”

Last week, Abbott attended a community forum in Launceston, where he fielded a detailed question featuring extensive criticism of the Coalition’s rival broadband policy from Andrew Connor, a spokesperson for Digital Tasmania, which has been one of the key lobby groups in helping to push for better broadband infrastructure in the state. Connor is also a councillor at Meander Valley Council and an IT consultant.

Connor told Abbott (full audio available here) he and his ministers had “set out to destroy the NBN”, despite the fact that the project was supported by much of the community, had been “a deciding factor in the last election”, and despite the fact that the technology industry broadly agreed that fibre-optic cable would be the key technology to meet global telecommunications needs.

“The question for you is what are you going to do if you’re elected — what are you going to do with the NBN?” Connor told Abbott. “Are you going to rip it up? Are you going to shut it down? Tasmania needs this technology, and the rest of the country needs it too. We also need another link to Tasmania, and that’s being left off the map.”

“The NBN really is a massive project for the country, creating employment, and also opportunity for education and healthcare everywhere. That value-adds onto the $50 billion that’s being spent on it. We need to know what you’re going to do with the NBN, and we need to know the policy more than 10 days out from the election, like last time. But we also need to know how your policy meshes with the state-level policy of supporting the NBN.”

Shadow Communications Minister Malcolm Turnbull has informally outlined a number of details regarding the Coalition’s rival broadband policy, such as its focus on splitting Telstra, re-using the existing HFC cable networks owned by Telstra and Optus, deploying fibre to the node technology and so on. However, the Coalition has not substantially fleshed out its policy in a formal policy document, and many details of the policy remain unclear, compared with Labor’s very detailed NBN plan, which will have advanced substantially in implementation by the next Federal Election.

In addition, the NBN continues to enjoy strong levels of popular support, even amongst Coalition voters. More Coalition voters support the project than are against it, according to new research released yesterday, as support for the initiative continues to grow to record levels. According to the polling data, in total 42 percent of respondents who identified themselves as Liberal or National voters stated that they were in favour of the NBN, while 40 percent in total opposed the project and the remaining 18 percent didn’t know. Amongst Labor and Greens voters, the numbers are much more strongly in favour of the NBN, with 80 percent of Labor voters and 68 percent of Greens voters for the plan, and with a much higher proportion of those polled being strongly in favour. In total, according to Essential Media, 57 percent of Australians currently support the NBN.

At the Launceston meeting, Abbott responded by stating that he “profoundly” disagreed with many of Connor’s inferences. “But that’s the beauty of democracy; we are open to being challenged,” he said. Abbott said the problem with the NBN wasn’t its objectives, “which are laudable enough”, but that it created a new government monopoly, “which we don’t need; it’s too expensive”. “None of us want to pay more than we have to for anything, and it is doing more than is necessary with fibre,” he said.”

“Fibre is very important, of course fibre is very important,” he added. “But you do not need fibre to every home to have a decent broadband system. In fact, most of the cost of the NBN is the delivery of fibre in that last few hundred metres to ensure that it goes to 93 percent of the homes in our country. That is the problem. Govt monopoly, unnecessary expense, and insistence on fibre to every home.”

The Coalition, Abbott said, wouldn’t “throw good money after bad” if it won government, and would accept what it found when it took power. “We’re not going to rip up contracts, we’re certainly not going to tear down infrastructure,” he said. “But we do not, certainly, intend to continue, what we think is unnecessary and too expensive, and we certainly don’t guarantee to keep in public ownership something where competition, I think, is generally better at delivering an affordable service.”

Abbott also stated that in Tasmania, the NBN had so far passed only 4,000 houses, with less than a thousand premises having taken up the service, “even at subsidised prices”.

Connor said there were “well-documented reasons” for the take-up rates. However, Abbott said the fact was that at the moment, the NBN was passing five houses a day in Tasmania. ” If the schedule is to be met, it has to pass 170 houses a day. Nationally, the NBN has so far gone past about 18,000 houses. They are telling us that it’s going to go past almost a million by the end of the year. Now does anyone really believe that this government is capable of doing that?” he said.

“So I am all in favour of faster broadband. I am all in favour of better broadband services. But I think we can do it much better than is currently happening.”

Who’s right here? Well, both sides. Connor is right — Tasmania and the rest of Australia stand to benefit greatly from the NBN. It’s a worthwhile project which is slated to make a return on government investment (that is, it will actively make money for the government), as well as achieving important industry and public policy outcomes such as restructuring the telecommunications sector and providing better services to consumers. In addition, Connor’s statement that the Coalition needs to provide more detail with respect to its alternative policy was also accurate.

However, in his speech, Abbott was convincing — as he so often is in person — and won a round of applause from the Launceston audience. Plainly, there are people in Tasmania who think the fibre rollout in the state is proceeding too slowly, and they’re right. The NBN has been quite delayed over the past several years, primarily due to the need to finalise NBN Co’s agreement with Telstra, and things are proceeding more slowly than many people would like. Labor first won government this decade in November 2007. 4,000 premises in Tasmania is a pretty slow rate for that four year period.

The caveat, of course, is that the NBN is now in full ramp-up stage and will, from now, be rolled out in an accelerated manner. All of the planning has been done, all of the I’s have been dotted and the T’s crossed. Every state in Australia will receive a vast swathe of NBN infrastructure over the next three years, and the Coalition has not yet done enough to illustrate the details of its own plan, and how it would transition the NBN to that plan.

The principles espoused by Abbott last week are good principles — but principles do not a plan make, and Labor has a very detailed plan which is being implemented rapidly as I write this. The Coalition needs to actually show the nation its broadband plan — if in fact it has one at all.

Image credit: Jens Buche, royalty free


  1. I think people need to take into consideration the initial stages of the rollout will be inclusive of laying backhaul to the POIs, once this is done then the area rollouts will be much faster and we’ll see a ramp up in areas getting rolled out in coming years.

    Working on the assumption that the rollout will continue at a steady pace over the 10 years is just false.

  2. “We’re not going to rip up contracts”

    That’s encouraging. Especially since I’m in the three-year plan :-)

    • I don’t believe him. The NBNCo could legitimately have signed contracts covering the three year roll out plan as it stands at the next election. That could cover construction out to mid-late 2017. I do not believe the coalition will keep the NBN roll out going for the entirety of their first term in government and a bit longer. It’s nonsensical.

      • You know, thats an interesting point.

        If they really wanted to totally screw the coalition regardless of whether Labor gets the boot or not, NBNCo could quite easily just subcontract a huge portion of the work to Telstra or anyone else, signing big agreements with some nasty cancellation clauses – which would make Turnbull’s job impossible.

        I’ve heard from some local technicians that now they’re retrained, they’re being moved around to facilitate areas that need technical support and have NBN Fibre nearby.

        Its entirely possible that Quigley has this exact strategy in mind.

  3. The FTTP plan was first mooted in late 2008 when as part of the NBN v1.0 tender process, Axia NetMedia proposed building it instead of FTTN, as was the government’s initial plan.

    That three and a half years later, the opposition can’t come up with a detailed and costed proposal is kinda scary.

    Their own research suggests it was the NBN on which they lost the election. Heck, in their LOOOOOONG speech to hand the ALP power at the 2010 election, Oakeshott and Windsor said it was the deciding factor.

    More Coalition voters now support the NBN than don’t support it.


    • And come the next election, Oakeshott and Windsor will be told by their constituents if “handing the ALP power”, was a good call or not.


        • Come the next election, they WILL be told by their electorate whether “handing the ALP power” (your words) was the right thing or not. Can you please point out the hypothetical??

          • I can predict the future actually. I predicted:
            -There will be an election
            -The electors will either retain the two Independents you mentioned, or get rid of them.

            The only way this WON’T happen, is if one or both retire before the next election.

          • Actually, it was “if handing the ALP power, was a good call or not.” that you said.

            They could think it was a bad idea, but still re-elect them.

            But we are now getting wildly off topic.

          • The hypothetical is that the next election will be a real one, not the pathetic effort the last one was, and we get a real government not a hung one.

    • What’s even scarier is that the Coalition’s supporters will swear that the NBN was conjured up on the spur of the moment by Conroy on a flight, and jotted down on the back of an envelope.

      If so, considering the NBN is rather comprehensive and absolutely kills three and a half years of weighted and carefully constructed Coalition policy, that’s pretty scary that goofy/filter Conroy is in hindsight, obviously, light years ahead of them in foresight for Australia?

  4. The “govt monopoly” argument is bollocks when you see the fibre-to-the-home for what it is: infrastructure, just like the road to the driveway, the water mains, and the electricity supply. How many of each do we have to a home? Exactly one.
    Having multiple roads in front of our house for the sake of competition makes no sense.
    And for electricity and IP at least, different suppliers can be selected by the individual.

      • Better a government monopoly than a private sector one.
        At least with a government monopoly it is easier to regulate and if we don’t like it we can vote in a new government.

        • “Better a government monopoly than a private sector one.
          At least with a government monopoly it is easier to regulate and if we don’t like it we can vote in a new government.”


          Do you not remember the days of Telecom $1.50 / min STD call rates?

          That was a Gov monopoly, we did not like it, yet it stayed in place for decades.

          A monopoly is a monopoly, irrespective of who controls it.

          I really don’t have an answer other than to say… Maybe tender for the operation of the network, while the asset remains in Gov control, like our F-18 maintenence?

      • +1,

        Something I’m sure the critics aren’t interested in, because the NBN, nothing else, is the line in the political sand.

  5. So Mr Abbott wants to use HFC which in many places is already at or over capacity, wireless which is already WAY over capacity and very very expensive and FTTN which is slow and with no upgrade path to even 100Mbps let alone 1Gbps.

    If FTTN is built it will cost people in the bush and sparsly populated areas millions of dollars in extra costs and here is why.

    If you build FTTN you need to have all of telstras copper connections while paying out their contract which will put it in the order of more than $5 billion easily. What is telstra to do with their new found riches why overbuild the new FTTN network in the cities where it can make money meaning that that multi-Billion dollar FTTN network will not be able to susidise the bush users meaning they have to pay more money for inferior internet once again.

    The only way for a broadband network to work is to build it as up to date as possible so it is not possible to be overtaken and there is only one technology that is capable of up to terabit speeds in the future and that is fibre.

  6. Abbott is saying that he intends to privatise whatever NBN infrastructure is already rolled out – “we certainly don’t guarantee to keep in public ownership” – he is virtually promising to replace a government monopoly with a private monopoly – Telstra infrastructure monopoly Mk II ? Competition ? I don’t think so. Inflated prices (again) ? Definitely.

    • he is virtually promising to replace a government monopoly with a private monopoly

      in which he will be able to purchase shares. :)

      • If it’s anything like it’s done in the US, it’s more likely his friends will purchase those shares, then what Abbott retires he’ll be hired as a “consultant” and reap in the dough. After all the Liberal party is the one that invited Tea Partiers over to Australia to discuss strategy.

  7. “even at subsidised prices”

    What subsidised prices is Abbott talking about? Isn’t the connection free for everyone(ie no price distortion)?

    • Either he is distorting the truth by a flat out lie or distorting the truth by calling a 7% ROI subsidised.

  8. My concern is with one of his points (well actually many, but ill be succint).

    He says that the government should nto be rolling this out and that NBN Co. should not be rolling out what it has already built. I hope this does not mean he plans to immediately sell of all of the assets NBN Co. has built. In doing so he will:

    1. Lose a boat load of money because the value of the assets of such a pathwork build (it will be pathwork till it is finished) will be considerably less than what has been spent already.

    2. Potentially encourage a South Brisbane type system. The access prices for south brisbane services are extrodinarily high. So any person on that FTTH network will pay out the nose. These prices will be significantly higher than under NBN Co. guidance due to differences in ROI.

    • In other words he doesn’t think the government should be involved in basic infrastructure, and his supporters are so blind they don’t realize that every basic amenity they have is supplied by government owned infrastructure- water, electricity, roads, etc.

      • What a lot of people also forget is that when the government owns the infrastructure it ensures that people in remote areas have access to the service – it’s called a Community Service Obligation. The private sector is not interested in this sort of social responsibility. If it does then people in remote areas who may be more dependent on having access to this sort of technology will have to pay outrageous premiums.

        When Telstra was privatised it should have only been the service delivery side of the business not the infrastructure. Imagine the costs to the end user of the NBN if a single private company takes over the infrastructure.

    • Don’t forget too Tim, the NBN is being funded by Government bonds. As such, should the NBN be sold or gifted to Telstra (as seems the case) what happens in the future when the bonds mature and instead of having NBN revenue to pay the face value upon maturity, there isn’t a NBN and therefore no revenue to pay?

  9. Once again the article fails to address central questions in the NBN debate. First, the NBN is well behind its own rollout timetable, not mine, not yours but its own. All we hear is excuses, but we are still asked to trust the revised timetables.

    Second, there is not definite cost for the NBN, it started out at 4.5 billion and now is at 50 billion and these projects are notorious for going over budget. The recent Economist analysis was scathing in terms of cost.

    Third, how you can be so dogmatic on the alleged benefits. No cost/benefit analysis was even undertaken.

    Fourth, the Government has a shocking record for wasting taxpayer’s money, failed projects and cost over runs.

    • Second, there is not definite cost for the NBN, it started out at 4.5 billion and now is at 50 billion and these projects are notorious for going over budget. The recent Economist analysis was scathing in terms of cost.

      When was the NBN ever $4.5B? The lowest cost I’ve heard is $43B.

      You sure you’re not getting that mixed up with OPEL?

    • “All we hear is excuses, but we are still asked to trust the revised timetables.”

      A timetable is revised? Big deal, we’ve been told that no one needs the NBN so logically these delays should be irrelevant besides what’s the alternative? Waiting for Abbott and his zoo crew chums to come up with a decent plan? That isn’t going to happen.

      “it started out at 4.5 billion and now is at 50 billion and these projects are notorious for going over budget.”

      Let’s call it a trillion just to be sure. LOL.

      “Second, there is not definite cost for the NBN”

      Fact of the matter is there doesn’t need to be one. The important number to look at is how much the government is contributing. So say the 93% FTTH is built and then NBNco then decide to extend that to 96%, the cost of building the network had gone up so do you then say “OMG they went over budget!!!”?

      “Fourth, the Government has a shocking record for wasting taxpayer’s money”

      Oh I know, tell me about it, remember those wars of terror we got suckered into.

    • @BC – Yes, so do I.

      Some people apparently see NBN as just another opportunity for political slogans and catcalling. This hides the main reason we need it, namely that it is the only system that will meet our needs in ten or fifty years time.

      Some of the stuff used against NBN, like the post from @the lone gunmen above, is so ridiculous as to be self-answering, but most of the politics from both sides is a distraction from informed discussion.

      Maybe it’s meant to be – there doesn’t seem to be much other point to it.

  10. The naysayers also selectively forget that the NBN will raise revenue which will eventually offset the initial costs if it stays in govt hands. This is why the private sector will be very interested in it – allow the govt to install the infrastructure (an opportunity the private sector never took up), buy the finished product and then sit back and rake in the money.

  11. ” …. we certainly don’t guarantee to keep in public ownership something where competition, I think, is generally better at delivering an affordable service.”

    There’s the problem right there. Policy making driven by political ideology rather than common and practical sense.
    And Turnbull ‘think’s’ does he. Nice to know he wont wait until a CBA was done.

  12. Renai, In your analysis, you state that all the planning has been done. This is not true. Before an area has any work started, the planners have to look at many factors before they can begin planning. Only areas where work has started, has planning actually finished.

  13. What’s frustrating and insulting is not only Abbott’s relentless and reckless plan to destroy the NBN, but that he is completely unable to answer any direct questions about coalition alternatives.

    The questions raised by Andrew Connor (great bloke btw who has done so much for lobbying for better digital services in Tasmania) were entirely reasonable and relatively straightforward, but as usual Abbott simply “profoundly disagrees” and leaves it at that.

    Tasmania is depending on the NBN to inject vital funds into our struggling economy, to create countless new job opportunities and to decrease the “brain drain” (we lose so many university graduates to the mainland, who could retain their residence in Tasmania and work remotely over a high speed fibre connection).

    I have quite a few coalition supporting friends down here. All of them want the NBN. One of whom works for a Liberal senator who frequently criticises the NBN (simply because it’s the party position).

    • @ Simon, I think that if Tony Abbott continues with his current plan he will lose the next election. “No” is not a justifiable answer. And yet he continues to stick to it. Can you imagine what the NBN will be worth if the Liberals get there hands on it.
      I share your frustration..

      • “Can you imagine what the NBN will be worth if the coalition get their hands on it?”

        I try not to think about it. Particularly as my house is due to get the NBN in approx 12 months time. I’m going to arm myself with a battleaxe and shield and go troppo if anyone threatens to take it away from me! ;)

    • “What’s frustrating and insulting is not only Abbott’s relentless and reckless plan to destroy the NBN, but that he is completely unable to answer any direct questions about coalition alternatives.”

      The reason he does this is because he believes he does not need to as currently the polls say the coalition will win the next election. There’s no point wasting any time or effort coming up with a plan when your plan is to basically do nothing. Obviously he and the Liberal party are treating voters with contempt, the smart thing to do would be to just swallow their pride and accept the NBN, unfortunately for them that doesn’t seem possible so even if they do win the next election it will come back to haunt them.

      • Sadly, I think you’re right. It’s too easy for Abbott to stay largely silent and allow his coalition thugs and right wing media to play on the general ignorance surrounding the NBN, and all the misunderstandings about complimentary technology like wireless. Rather he attempts to focus voters minds on it’s monopoly and cost (fitting in nicely with his continuous claims of reckless Labor spending) while conveniently overlooking the NBN’s necessity for Australia’s future bandwidth requirements. Not to mention completely overlooking the numerous benefits it will provide to regional Australia (Tasmania being the most obvious example).

        If he won’t even concede the NBN carries benefits for places like Tasmania (with numerous guaranteed jobs in the pipeline) he’s certainly not likely to back down on his ambitions to destroy it for the rest of Australia as well.

      • No worries Andrew. We need more tech-savvy lobbyists like yourself fighting for the future of digital services in Tasmania. I’ve long been a fan of your work.

        Great press release from Lara too. She’s absolutely right in pointing out Hodgman’s weakness and hypocrisy by not taking a stand against Abbott on this issue. He knows full well how badly Tasmania needs the NBN and he has the audacity to be harping on about job creation every other night on the news! I can think of no other area where Tasmania is poised to create so many new jobs. Not only in construction, but the many new industries and business that will grow from the NBN’s infrastructure.

    • First of all, you can’t “destroy” something that doesn’t exist (or hasn’t been built) in the first place. No government is silly enough to “rip up” infrastructure that has already been laid by NBNco. (If you’re just engaging in emotive political trolling by rehashing Gillard’s rubbish, then please pardon my literal reading and disregard what I just said.)

      Now, on to the serious stuff. .

      To those of you complaining about the supposed lack of detail on the Coalition’s broadband plan, bear in mind that the incoming new Government isn’t starting from a clean slate like Labor is. The new Administration will have to pick up the pieces that is Labor’s two-term legacy. What are these “pieces”?

      Firstly, you have the package of NBN legislation which is in public domain.

      Secondly, you have the multi-billion dollar Telstra deal which (apart from a released summary) is not in the public domain. As you can imagine, the fine print and various minutiae clauses in the complicated agreement with Telstra will be of great interest to the incoming Minister because it will determine the options (cost, penalties, etc) available to implement an alternative investment policy.

      More generally, it’s impossible to devise a negotiating strategy with Telstra (and silly to announce anything publicly prematurely) without first sighting the actual contract. (If you’re skeptical about the value of additional information in the contract not already in public domain, just think – even Simon Hackett, who has no plans on building anything, sued under FOI laws to get access to the full document.)

      The “third piece” that the incoming Government will have to deal with is the actual infrastructure constructed and inherited from Labor when power is handed over. This is the second big unknown, i.e. what infrastructure will NBNco actually manage to complete over the next 20 months or so. This information is important because it will determine the stage of execution of the Telstra deal (e.g. what clauses have been triggered, what costs have been incurred, etc).

      Once you take all of these practical realities into account, you will realise that it would be stupid for anyone to lay-out any detailed alternative plan in concrete, when the “base” (or foundation) you’re building on hasn’t even been ascertained. This doesn’t mean an alternative plan isn’t viable; it merely means the Opposition has to sit patiently until they get in power and have full access to all the pertinent information to conduct their due diligence prior to any grand official policy announcements.

      This is all commonsense.

      • Incorrect and political sleight of hand (is that you Tosh)?

        The opposition know “exactly what NBNCo has planned and can formulate their own policies accordingly”, but choose not too.

        Interestingly, they hope the apathetic, she’ll be right, Aussie public will vote for them policies or not? So they won’t cloud the issue by adding actual detail…!

        For example, the opposition could say, NBNCo plan to have ABC done by the 2013 election, but if we are elected we will do XYZ with NBNCo’s ABC.

        Much like Citigroup did with their submission, by suggesting that basically, the opposition would primarily wash their hand of comms entirely and simply hand it all… the already built NBN and $B’s in subsidies over to Telstra (oops sorry Network Co and Service Co)…

        The Coalitions slogan should be, vote 1 Marty McFly – Back to the future!

        *rolls eyes*

      • Here’s the head of Telstra from todays IT section in the Oz (free). “Mr Thodey said the NBN rollout would be very complex to reverse”.

        “The truth is it’s very hard to unpick,” the Telstra chief executive said. Just copy and paste Mr.Thodey into google and the article will come up.I’m not saying it’s defintive but it’s different from the view above.

        • Complex? Absolutely. As I said above, the incoming Government is inheriting “‘three pieces” of a complex jigsaw that is Labor’s legacy. This is precisely why it is silly and rash for the Opposition to craft detailed policies at this stage and shoot at a moving target blind-folded.

          Firstly, you can rule out a new Liberal administration carrying on building 93% FTTP.

          The prospective loss on the entire project under the existing configuration dwarfs the mandatory payouts under the Telstra deal. (To get a rough idea of the size of the loss, consider Bevan Slattery’s suggestion in a Commsday editorial that the Government sinks, or “budget”, +$20 billion into the NBN project as “unrecouped” infrastructure spending, i.e. forgo recovery of capital that is unrecoverable unless you want to push prices sky-high..)

          In practical reality, just paying out the contract and liquidating NBNco will be an “extreme” option that even Tony Abbott will avoid as far as possible.

          A lot hinges on what Telstra’s real intentions are. I believe Telstra has quite possibly genuinely drawn a line under its past history of partly centering its business around ownership of last-mile fixed line infrastructure. Why?

          Firstly, thanks to past ACCC access determinations, the historical performance of the CAN from an investment perspective has been truly woeful. The $11 bln deal with NBNco represents an opportunity to lock in a final exit value for the CAN. After all, the chances of the regulatory environment suddenly turning favourable is close to zero.

          Secondly, the ongoing transition to digital IP means that actual ownership of network infrastructure no longer confers the competitive advantages that it used to in the old analogue world. In the future that Telstra appears keen to embrace, value creation and competition will increasingly take place at the services layer, and not the network layer (which will be heavily-regulated anyway).

          Thirdly, the provision in the package of NBN legislation which forces new super fast networks to be subject to open access regimes effectively neutralises the competitive advantage of building and owning your own infrastructure. Why spend your precious capital building something that has to be shared with your competitors who get to free-ride?

          In short, having locked in an exit value for its fixed line business, Telstra is now sitting on the same page as the other ISPs – they are now focused on getting a head start on building new businesses and competing in the new world of digital services and are more than happy for taxpayers to “carry the can” or the entire capital risk of building the NBN. David Thodey now says he believes in “build and they will come”; of course, he does — Telstra is no longer bearing the capital risk of building new NBN infrastructure!

          However, if the above is true, and Telstra is indeed content to relinquish its current status as last mile infrastructure owner, then there is no reason why it should be reluctant to cooperate with the new Government and grant access to the copper. A faster migration of wholesale customers to NBNco under FTTN would accelerate the onset of payments relating to the “fixed network preference” component of the Telstra deal.

          All things being equal, this by itself may not improve the NPV of the deal by much (if at all). Bear in mind, the NBNco deal is effectively a “put option” on the fixed line wholesale business. All the Government has to do is to get the ACCC to further push down current access pricing on the CAN and, voila!, suddenly those accelerated disconnection payments (which are contractually fixed) will look even more appetizing, and Telstra will be keen to exercise its options in a hurry ;)

          • 1%, you’ve laid out the business and economic proposals both in terms of government and Telstra very well. It seems obvious now Telstra have decided to make an active effort to move away from the lumbering dual-headed behemoth of a monopoly that they were, pair down and become a business competitor on services,

            However, I put this to you- If NBN Co. were to receive take up of 40% (what their corporate plan predicts) by 2013, that would still put them in a massively strong business position, enviable by any telecommunications fixed line company internationally. I don’t doubt their numbers, the take-up we have seen so far is not, by any stretch of the imagination, indicative due to their slow trial schedule and locking in contracts with Telstra. This would put them on track to be revenue neutral by 2014 and turning a modest profit, which would flow back to the government in 2015, as their plan predicts. Again, I’ve no reason to believe this won’t happen; many people much cleverer than me, including a half a dozen economic firms have shown this to be a reasonable expectation.

            Enter the Coalition, who, would most probably put an immediate stop in 2014 to a government owned company that has just turned several hundred million dollars of loss into a break-even scenario. Now the government would actually begin receiving loan payback, and yet the Coalition would be happy at this point to simply walk away, cancel contracts, sell off the cable laid and reverse course with Telstra? How is this good business? Forget the actual benefit to the consumer here for a minute, although this is one of the biggest parts, as this isn’t all about business, it’s about finally! decent telecommunications infrastructure for our nation, but if you look at this from a pure business standpoint; why would the Coalition cancel a policy which would soon make them money, to pay off that “huge” debt we apparently have, while subsequently providing the consumer with better, faster and ultimately cheaper broadband, with better services and more competition in the marketplace?

            THIS is why I honestly believe the Coalition have no solid outlined plan. Yes, there is always an element of guesswork when it comes to projections and market take up and progress, especially cross-partisan, but in all honesty the NBN is a good BUSINESS case, and he Coalition know it. Now they’re trying to find a better one and FTTN is proving that it isn’t, but they don’t have anything else.

            On a consumer level, why would you go with an inferior product when for a couple of extra Billion and a few more years now see us go the whole hog and giving us major advantages in speed, reliability, availability and upgradability of broadband for the country? I don’t care where you’re from, the projected national debt of 10% GDP is minuscule and that’s coming from the OECD, the IFM and just about every economics and ratings firm in the world. We are fortunate to have a mining boom Mk2- while I enjoyed and relished the Howard years, no significant infrastructure spending was done during Boom Mk1 and this time around, we need to bite the bullet and spend the money while we have it. We’re in for a tough couple of decades and good infrastructure now will relieve the pressure when welfare and healthcare costs skyrocket over the coming years. I’m sick of hearing “how much each Australian now owes thanks to Labor’s reckless spending” I don’t normally appreciate Labor’s “spending” anymore than the best conservatives, but it was Labor’s spending that got us out of the GFC, along with the mining boom mk2. Yes, there have been bad wastages (insulation scheme anyone?) but NBN Co. is OWNED by the government, NOT run by them. My father hates Labor, always has and always will and I cannot get him to see that NBN Co. is independent and free to operate the most efficient way it can. We have some of the best people in telecommunications in Australia and the world working on a world class, nation changing piece of infrastructure- can we not put politics aside for 2 minutes and just realise what an incredible opportunity this is for Australia to become a world leader in one of the most important areas in the next century- information.

          • Well dont blame the current Govt for the complexity, blame the Howard Govt that didnt separated Telstra into retail and wholesale. Its the Liberal Howard Govt that is responcible for the telecommunications situation not the Labour Govt which is trying to correct it.

          • l’m not aware of any telco that has been split prior to privatisation. If this is a major policy failing, then it’s a failing of governments all around world.

            In retrospect, the parts of Malcolm’s NPC speech about the spin-off of CAN assets into “Network Co” was largely an exercise in hypothetical speculation about what the Opposition could do if it was starting from a clean slate. With the passage of the NBN legislation and the ratification and execution of the Telstra deal, by the time the Liberals take office, the horse will have well and truly bolted.

            The NBNco ship will have long sailed from port. In the absence of an immediate double dissolution and gaining of Senate majority to make major legislative changes, the path of least resistance will be to chart a new course for NBNco and build FTTN quickly before privatising (or selling) NBNco into a utilities trust.

            l don’t think Telstra’s going to spend $11bln building data centres in Australia. The digital services business isn’t that capital intensive. Given that Telstra now sees itself as an international telco company, l think Telstra is going to take the billions and recycle them overseas investing it in infrastructure in international markets where the regulatory environment is more friendly.

            By legislatively forcing all future fixed-line networks to be automatically subject to open access regimes, the Labor Government has basically forced all private capital out of the infrastructure game for good. As I’ve said above, no company is going to bother building anything if it doesn’t deliver a competitive advantage. You can also add the millions Telstra will get from folding Velocity estates into the government “NBN” to the billions in capital flight to overseas markets.

            With Telstra, Optus, iiTPG, et al ranged against it, the privatised NBNco utility company will undoubtedly be regulated to death by the ACCC, and have little surplus capital to invest in major infrastructure upgrades. Unlike other countries where broadband upgrades are driven by multiple private entities engaging in a competitive arms race, with Telstra permanently withdrawing from the market, all future brownfield infrastructure investments will very likely be entirely reliant on direct intervention and funding by the Government.

            This is Labor’s radical, anti-market legacy. It will be interesting to see how much of Labor’s supposed “reforms” the Liberals will eventually reverse over the long run.

      • 1% you’ve essentially said it is impossible for the Coalition to create a competing policy on the basis that they don’t have enough of the facts. I call BS on that. Certainly, they have no access to the vast majority of the contracts entered into, as you say, they are private. However, treasury estimates and freedom of information on the forward budget are more than capable of providing adequate estimates on contracts, penalties for cancelling contracts and the like, including borrowing for the current policy and what it would cost to pay those loans back.

        The reasons they won’t? 2 actually:

        1- After the absolute joke of their “we don’t trust the treasury so we’re gonna audit the budget ourselves” showed they’d essentially made numbers up and ended up with something like a $15 Billion hole in their budget, they CAN’T run up to the treasury and ask for the estimates- the media would have a field day.

        2- They already HAVE estimates about cancelling the continued rollout of the NBN, cancelling contracts, doing their own “cost/benefit analyses” (load of bollocks that they are) and then actually getting their own “Broadband Policy” up and running. But there’s a problem- it’s MORE expensive than the NBN AND will deliver less ( They’ve estimated it’ll cost $16.7 Billion, substantially less than the $28 Billion the government will have to pony up overall….however, at the end of the article is the killer. No costs for cancelled contracts, no costs for rewriting and implementing the structural separation of Telstra and backlash for supporters of the NBN. I can’t find the article right now, but I clearly remember when NBN Co. entered into their contract with Telstra, any cancellation would net them in the vicinity of $5 Billion. (round figures). That’s JUST Telstra. So now the bill runs to $21.7 Billion. Plus at least a $1 Billion in other contract cancellations ($22.7 Billion) then they would have to produce their own CBA’s, and legislation as well, all while absolutely NOTHING gets rolled out to the Australian consumer.

        So we have a Coalition policy with estimates that show their “plan” will cost around $23-24 Billion (probably more) and will be delivered EARLIEST 2018. By 2018 NBN will have rolled out 60-70% of the network. So similar time frames….ecept the NBN delivers higher speeds to more people, cheaper and has the ability to be upgraded from 100 Mbit to 1Gbit already, let alone in the future, while the Coalition have guaranteed “12Mbps minimum” which is limited mainly because of the copper running from the exchanges to the premises.

        The Coalition don’t have a plan, unfortunately as already has been mentioned because they think they can get away without one, treating the public like lemons and because their “plan” would pale so badly in comparison to the NBN it’s likely to do them more harm than good.

        • The Coalition don’t even need a detailed plan they just need to tell us two things.
          What is their end goal for comms and how do they expect to pay for it and are they expecting any any of that cost to be offset by revenue, how do they plan to recover sunk costs from stopping the NBN?

  14. “we certainly don’t guarantee to keep in public ownership something where competition, I think, is generally better at delivering an affordable service.”

    Please provide the evidence for this Mr. Abbott. Otherwise you just destroyed your entire stance on delivering an alternative to the NBN.

    • “we certainly don’t guarantee to keep in public ownership something where competition, I think, is generally better at delivering an affordable service.”

      Well, there’s the problem. Tony thinks the NBN is a service. It isn’t, It’s infrastructure to deliver services on.

  15. Well even if the coalition wins the next election, its highly unlikely they’ll control the senate.

    Really the waste of money is purely politically motivated. Wars cost us more money, middle class welfare costs us a heap more in one year than the NBN will cost in 10 years. But hey people are selfish and $5k for a kid and extra money to help people with all sorts of things who should learn to budget their decent salaries rather then get government handouts.

    Cash never helps anyone, but providing services and tools always does.

  16. blah blah popular blah blah

    What is the actual number of households passed vs households connected vs household actually uisng
    the connection ? Money talks – the rest is b***s**t

    • Even then, “the actual number of households passed vs households connected vs household” is VERY misleading because of the following

      1) Remember that it’s highly likely that a good portion of those not on the NBN, but have NBN connections, are locked into either 12 or 24 month contracts.

      2) The Telstra deal has only recently been approved, and Telstra have not yet begun migrations.

  17. I just have a suspicion that LNP wont have any fleshed out policy on broadband until the election or even after the election where maybe they will win office. Their campaign is simple. Be anti Labor, and NBN is a big project where they spin voters their way claiming it’s a big wasteful project.
    They know it’s not a welfare project and that it’s a business. It’s not the same as spending billions on health or defence.
    I doubt LNP be tearing up infrastructure and I really question if they will “tear up the NBN” plan in its entirety if they win the election.
    Well that’s just one theory as to why they might be holding back on revealing their own policy.

  18. Fibre to the Node is ‘zoom then plod’. But what’s the bet that ‘nodes’ will be located at parliaments and Liberal Party offices nationwide?

    Definitely under Labor. Merely coincidentally under the Coalition.

  19. I guess Abbott could split Telstra, hand over the NBN to the wholesale arm and go FTTN, (with access to Telstra copper as payment for handing over the NBN).


    By the way, the three year plan is more like a four year plan given June 2015 is more than 3 years away.
    (Which is when I’m scheduled for rollout to start planning in my area.) Calling it a 3 year plan is a bit unfair.

    I just wish NBNCo ramps up rollout a lot faster now more hurdles are out of the way.

    The LNP should release their plan NOW, not on page 3 of The Australian a week before election.

  20. Seven_tech, you say that the NBN is a ‘good business case’ – if that was so, the market would be undertaking to build an equivalent network itself without a government-protected monopoly having to do it. If you’re going to be pro-NBN, just say so on infrastructure grounds, but don’t pretend that there is an irrefutable business case for it.

    Also, as someone alluded to earlier, it is rather difficult to have a fully-fleshed out alternative policy when there is a clear asymmetry of information – the government holds all the cards, all the contracts and all the plans, so the coalition is inherently going to be two steps behind whatever they actually say.

    And for all the criticism of Abbott, he is right that the roll out is taking far too long. People have been willing to give the revised timetables a free pass, but I don’t. Even if NBNCo does manage to ramp up exceptionally quickly, I doubt it will meet its targets.

    • You have got to be kidding. It’s a good business case for a *government*, which welcomes a 7% ROI over a 15 year time period. It’s a terrible business case for a private corporation, which requires a much higher ROI over a much shorter time period. Why are so many people so bad at basic economics?

    • Robert- I made this unclear. However, this is exactly what I mean; the NBN is a good business case- for a government. For private sector telecommunications, you’re absolutely right, it’s garbage. I certainly wouldn’t invest in it. But this misses the point entirely. The NBN, as the Coalition appears to conveniently ignore as often as possible, is infrastructure necessary to the continued growth and prosperity of the digital economy; an increasingly important part of the Australian economy every year. However, in the case of the NBN, not only does it deliver good infrastructure, it delivers it with the promise of return on the capital, unlike any roads, rail or power infrastructure is likely to, while giving Australia fast and, more importantly, upgradable telecommunications infrastructure.

      It may be a case in point that the NBN private business case leaves alot to be desired (which is not necessarily a bad thing IMHO, as I’d prefer to see it stay government owned for the foreseeable future) but in terms of a government enterprise? It wipes the floor with anything the Coalition can come up with and they know it.

      In reference to your comment about the Coalition not having the facts they need to give a solid policy; it is true enough that the Government in this case holds all the cards, but I simply cannot accept that they have no estimates, no reasonable plan of attack and, in fact, no reasonable line of defence when it comes to their own Broadband policy. Why else would they have spent almost 4 years dilly dallying around with no solid answer to a question that their OWN REPORT into the loss of the 2010 election said was a vital point of loss that they failed to capitalise on.

      The Coalition know the NBN is a decent piece of Government infrastructure, oddly enough, thanks to the fact that Labor put it together so quickly then handed it OFF so quickly, that they couldn’t mess it up. Even Turnbull thinks so, but he has to play the party line. Their own MP’s are clamouring to have it in their electorates, but Abbott’s tired plodding over “This Government is the worst and most wasteful Australia has ever seen” is wearing thin. Half a dozen times in the past 3 months they’ve had their bluff called on false arguments against various NBN facets and lost face. This shows how thin their arguments are and really how much importance they truly give to the NBN. They’re hoping it will slip quietly into the night during the election and then they can package it off and deal with it later once they’ve won.

      I for one am not willing for this to happen to vital, and some of the ONLY much needed infrastructure Australia has seen in the last 10 years, no thanks to Howard. (although I did and always will maintain the Howard years were some of the best we’ve had) I’m sick of half measures when it comes to infrastructure- NSW has put up with it for 20 years under Labor and it makes me sick with the waste it produces. And don’t get me STARTED on the separation of Telstra- It should have been done in 1996.

  21. Robert
    Rubbish, they have had 6 years, they have waffled about wireless as a basic National communications infrastructure (one prerequisite for NATIONAL INFRASTRUCTURE as the PMG and TELSTRA etc have delivered with our POTS is reliability, stability and guaranteed QOS at a certain minimum standard) Opel was a huge fail on that basis alone, the other wireless flim flam they waffled on about fails the same primary criteria as is being displayed daily. Now FTTN as the option, it is active field equipment using in many cases past use by copper for the last mile, if the copper needs replacing it is the height of financial irresponsibility to replace it with expensive copper rather than cheaper fibre. I have read “customers” waxing lyrical over their top hat (Telstra FTTN) fed ADSL2+ pointing out how it can be upgradeable to 100Mbit and more, didn’t mention pricing etc. Still stuck with active field equipment and copper pairs guaranteeing higher maintenance costs.
    I still see the major unspoken issue is actually the protection of Foxtel and Sky’s market. Preventing the consumer from having a choice. If you want Cable TV you are forced to subscribe to Foxtel

  22. If the Libs would get on board and say (in 10 second TV grab language) “Under an Abbott Government the NBN will continue – business as usual” then i’d be a happy man (even happier of Turnbull topples Abbott before the next election). A mish mash approach is going to be much more costly in the long run to maintain and will end up with FTTH at some point anyway.

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