“Cooked books”: Abbott misleads on NBN


news Opposition Leader Tony Abbott appears to have made a number of mistakes or factual inaccuracies in a wide-ranging speech criticising Labor’s National Broadband Network project, alleging, for example, that the project’s funding was based on “cooked books” and that retail prices would be three times higher than on current broadband networks.

The comments were contained in a speech Abbott gave this week to the Infrastructure Partnerships Australia conference, a forum which sees public and private sector executives debate public policy in the context of Australia’s infrastructure industry. Abbott’s speech was entitled The Coalition’s Plan for the Infrastructure of the Future. Not all of the speech is based on misleading information; some of it is factually accurate.

In the speech, Abbott strongly attacked the NBN, which is one of the key infrastructure projects being pursued by the current Labor Federal Government. However, in the speech, Abbott appeared to make a number of statements which falsely characterised the NBN project. Firstly, Abbott attacked the retail prices which service providers would charge end user customers using the network, and its construction cost. “The Rudd-Gillard government’s most notable contributions to infrastructure have been roof insulation that’s caused house fires, school halls built at double the normal cost and a National Broadband Network that’s digging up streets so that families can pay three times the current price for broadband speeds they don’t necessarily want or need and that could be delivered sooner at vastly lower cost,” said Abbott.

It is true that some retail services have expressed concern that the wholesale pricing scheme utilised by the National Broadband Network Company could eventually lead to higher consumer prices under the project. However, there is no evidence as yet that retail prices under the NBN will in practice be higher than those available through the current copper or HFC broadband networks.
The NBN prices released by companies such as Optus, iiNet, Telstra, Internode, Exetel and others so far have been directly comparable to current prices, and some companies — Optus, for example — appear to have directly ported their current plans across to the NBN.

Secondly, Abbott’s statement that consumers don’t necessarily want or need higher broadband speeds is also incorrect. The Coalition’s own Shadow Communications Minister, Malcolm Turnbull, has acknowledged the need for higher speed broadband in Australia, and the Coalition’s telecommunications policy currently features a similar underlying policy goal as Labor’s NBN project — to boost basic broadband speeds and coverage across Australia. In addition, polling has consistently shown that most Australians support the NBN, even amongst Coalition voters, with a new survey taken in April showing that more Coalition voters support the NBN than oppose it. The numbers of Australians who support the NBN are much higher amongst Labor and Greens voters.

Abbott also attacked the accounting mechanism through which Labor is funding the NBN, which does not see the project listed as an expense in the Government’s annual budget, because it is an investment expected to make a return.

“If the Treasurer predicts a surplus in next week’s budget, Australians can be confident that it will be based on cooked books, like the pretence that the NBN is not really government spending,” he told the conference. “If the $4.4 billion that the NBN is due to spend in the coming financial year were on budget, the government would be unable to predict a surplus. But to move the NBN off-budget, the government has had to assume unrealistically high take up rates to generate a commercial rate of return.”

However, according to a research note recently published by the Parliamentary Library of Australia, Labor is technically correct on this matter, and the Coalition is wrong. “Australia has adopted internationally accepted accounting standards, and these are applied in the budget treatment of the NBN,” the library’s Brian Dalzell, who works in its economics division, wrote in the report (available online here in PDF format). “While the applied accounting treatment depends on the specific transaction conducted between the Government and NBN Co, this treatment is governed by accepted accounting standards and is applied equally to all government business entities (GBEs). This treatment is not determined by the return generated by NBN Co (or any other GBE).”

Dalzell goes on to provide a great amount of detail around how the Federal Budget treats the NBN, breaking up the Government’s investment in the area into a number of different sections and looking at the differences between cash flow, equity, debt and so on. But all of it only serves to reinforce the impression that the Coalition is improperly defining the NBN initiative as an expense. In fact, the economist addresses this misconception directly.

“Can the NBN be accounted for as an expense item in the budget operating statement?” he asks. “In the budget statement, the NBN is accounted for as a financial asset (equity investment) under the ‘investments in other public sector entities’ line item of the balance sheet. The NBN is not accounted for on the operating statement as an expense item, because it cannot be defined as such under accepted accounting standards.”

Abbott also attacks the NBN on other grounds.

“Not only has the government failed to deliver on due process. It’s also failed to deliver on its commitments to get things built,” he said. “Its biggest single project by far, the NBN, is over-budget and way behind schedule. The latest figures show that it’s only passed 18,000 houses and that only 12 per cent of these are actually using fibre. To meet the target of 760,000 houses passed by the end of the year, it will have to pass over 3100 houses a day – or 100 times its performance up till now.”

At this stage, it is unclear to what extent the NBN is currently under- or over-budget, as NBN Co has provided a range of projections for how much its fibre, wireless and satellite infrastructure will cost to build.

Abbott’s statement that the NBN has only passed 18,000 houses and that only 12 percent of those were actually using fibre is based on figures released by NBN Co earlier this year (PDF). Although NBN Co has not released new figures since March, it is believed that more than 12 percent of customers who can connect to the NBN would have now done so, as customers have been steadily signing up to the network as it’s rolled out, driving connection rates of up to 30 percent in some areas.

Abbott is correct that NBN Co is aiming to have passed around three quarters of a million premises by the end of 2012. After an extended planning and negotiation phases, the company is now entering a full-throttle rollout phase, where it plans to reach millions of Australian premises over the next three years, under a plan released last month.

The Opposition Leader also criticised NBN Co over the salaries of its staff, compared with its ability to deliver. “NBN Co currently has 1300 staff earning on average $148,000 a year, the highest pay of any business in the country. That’s one staff member for every five customers. As Churchill might have said: never has so little been delivered to so few by so many at such expense.” Abbott is correct in that NBN Co’s average salaries are higher than many other Australian organisations. Although the company’s top executives on average receive less pay than the top executives of other major telcos such as Telstra, Optus and others, many of the other workers employed by the company were employed at a high rate, as NBN Co has attempted to attract much of Australia’s top telecommunications engineering talent to its ranks over the past several years, head-hunting executives from existing major companies like Telstra and Optus.

Lastly, Abbott made several other criticisms of the Federal Government on the NBN, who he referred to as “born-again socialists”.

“Yes, Australia does need faster broadband so that tele-commuting is an alternative to commuting,” he said. “As Telstra has just confirmed, this doesn’t require fibre to the home and is more likely to be provided by a competitive market than a government infrastructure monopoly. The Coalition’s broadband will be national, not nationalised. It will be available sooner and at much less expense to taxpayers.”

Abbott is correct that faster broadband can be achieved via other means than the Government’s fibre to the home-based NBN rollout, with the Coalition’s own proposal currently calling for the existing HFC cable networks operated by Telstra and Optus to be upgraded and continued to be used for high-speed broadband, and the potential implementation of so-called fibre to the node technology in Telstra’s copper network, which would see fibre extended from telephone exchanges out to neighbourhood cabinets instead of all the way to houses and offices.

However, his statement that faster broadband is more likely to be provided by a competitive market than a government infrastructure monopoly is incorrect. In Australia, major companies such as Telstra, Optus and others have not rolled out new broadband networks over the past decade since the HFC cable networks were built. Many in the industry have cited the idea that telcos are unwilling to invest in such fixed-line broadband infrastructure because of the negligible returns involved, the fact that it would likely be heavily regulated by the Government, and the threat of other telcos duplicating the infrastructure and reducing the potential return, as Telstra did when Optus rolled out its HFC cable.

Internationally, it has often been governments who have rolled out fibre broadband infrastructure. In countries where corporations have done so, they have often done so where there is a much higher population density than Australia features; such as in Japan or other Asian countries.

In addition, it is unclear whether the Coalition’s rival broadband policy will be “available sooner and at much less expense to taxpayers”.

The NBN is expected to make a modest return on the Government’s investment, according to its business case available online here. According to NBN Co’s business case, the NBN will cost between $36.5 billion and $44.6 billion to build over the next ten years. However, it is slated to make an internal return on that investment of between 5.3 percent and 8.8 percent on that investment — from $1.93 billion in the worst case to $3.92 billion in the best case. This return will be facilitated by the fact that rival infrastructure is being discontinued, to incentivise Australians to shift onto the NBN. Both Telstra and Optus have plans to migrate their customers onto the NBN en-masse.

In addition, the Coalition has not yet disclosed the cost of its own policy. However, a recent analysis by Citigroup found that the Coalition’s policy would itself cost $16.7 billion. The Citigroup report didn’t mention what financial return, if any, the Coalition’s proposal was slated to bring in on its own investment.

On the issue of timing, Shadow Communications Minister Malcolm Turnbull has repeatedly stated that a Coalition Government would immediately halt construction on the NBN while it instructed the Productivity Commission to carry out a cost/benefit analysis into how fast broadband could be best provided to Australians. This process is expected to take up to a year, potentially significantly delaying the rollout of the NBN in some areas.

Many of the misleading statements which Abbott made this week are similar to statements he has consistently been making about the NBN over the past year. I am surprised, in many cases, that he continues to make them. Certainly Malcolm Turnbull has gradually changed the way he speaks about the NBN over the past several years, indicating that his thinking has progressed on the issue. He no longer criticised the NBN on some of the areas which Abbott mentioned this week.

What this indicates is that Abbott does not hold a very nuanced view of the NBN and does not have a solid understanding of the facts underpinning the current telecommunications policies of each side of politics. This is disappointing; I would have expected the Opposition Leader to consult more with his Shadow Communications Minister on this critical national issue. It is, after all, one of the issues on which the Coalition lost critical electorates during the last Federal Election. Of course, Turnbull hasn’t exactly been the bastion of truth when it comes to the NBN either. Neither has finance spokesperson Andrew Robb. Or Liberal MP and former Optus executive Paul Fletcher. Detecting a trend here?


  1. Abbott isn’t a technology or ideas man. He’s firmly in the “resist for sake of resisting” camp.

    I think if Mr Abbott actually came up with a ground breaking policy, he’d frighten his colleagues.

    If your only trump card is to reject the government outright, and you can’t actually provide factual, balanced responses, without calling for an election, let alone provide solid policies from your own team, then one cannot expect too much.

    If they are getting the basics wrong now, what else will they get wrong, should people be daft enough to give them the balance of power next election?

  2. Can’t blame Abbott for lack of consistency. He takes his NBN advice from the same source he acquires his global warming advice from. Yet this person looks likely to be our next PM, which reflects rather badly on us.

    • “He takes his NBN advice from the same source he acquires his global warming advice from.”

      Exactly. Turnbull is smart, but stubborn, and will operate on his own at times. Abbott does, it seems, whatever his Advisers tell him. If your inputs are flawed..

  3. Tony “Non Sequitur” Abbott – the man who hates the carbon price, but declared that “a simple tax” would be the best way to tackle the problem.

  4. So, the line you guys in the tech press are pushing is:

    1. Mike Quigley and the Labor Government are being absolutely truthful about the economics and viability of Labor’s NBN;

    2. The Liberals are simply playing politics and telling lies about Labor’s NBN;

    3. Malcolm Turnbull apparently “secretly loves” Labor’s NBN and is gradually moving towards fully adopting Labor policy (all his trips to various countries talking to overseas telcos and lengthy, detailed articles attacking Labor’s NBN are just a political show);

    4. The Liberals will eventually have no choice but to build Labor’s NBN since there is obviously no better alternative to a brand new $36bln fiber access network that “doesn’t cost taxpayers anything or result in higher prices”.

    boy, are you guys in for a rude shock when the Liberals take office in 2013 . . .

      • I am sure it will be a rude shock to have to keep looking at Abbott’s head on a regular basis.

      • The biggest problems posed by a Coalition switch from FTTP to FTTN are twofold.

        In the short term it’s the broken contracts and the cost of redesigning the network. Witness the new QLD Liberal government’s decision to scrap the climate smart program. Total value of the contracts was 5 million, contract termination charges were 4.2million. Add in the administrative overhead of having staff actually arrange the termination of individual contracts and you’re soon into negative territory.

        On the scale of the NBN that means billions upon billions lost – billions that then further reduce any cost benefit the “cheaper” replacement might provide. The worst case is we end up paying more for an inferior solution than if the NBN simply ran it’s course.

        In the long term the major problem is that FTTN isn’t an endpoint technology wise. It’s a stepping stone to FTTP. The limitations of VDSL are well known. The first standard ITU G.993.1 was ratified in 2004, the second ITU G.993.2 in 2006, in the 6 years since that time nothing. There’s reasons for that and it isn’t because the engineers decided to take all their long service leave. It’s because the easy speed wins are gone. They may squeeze another revision out but over a 30 year timeframe FTTN is already a technological dinosaur while FTTP remains the only technology with a clear upgrade path that will allow 10 fold increases in performance to be implemented easily.

        So within the next 30 years we’ll need to repeat this whole process and pay again, effectively ending up with the NBN but at double the cost (or even worse – not at all).

        That the LNP will win the next election is a certainty, that Australians as a whole will lose because of it seems equally sure.

        • The Libs are not terminating the contracts; they are altering it to seek access to the copper.

          The entire broking community is now salivating at the prospect of almost $20 bln in cash payouts to Telstra from the Government. Any hint of these cash payments going off the rails will cause the TLS share price to plunge. Telstra will bend over backwards to preserve the value of the deal. If it means handing over access to the copper, why not?

          WDSL has now been declared and the wolves are baying at the ACCC’s door demanding cheaper and cheaper access and preparing to rape Telstra’s DSLAMS and backhaul all over the country. The value of Telstra’s wholesale fixed-line business will soon be worth less than Simon’s private aeroplane collection. Why not take the $20bln and run?

          The really tricky bit is the HFC. Telstra will want to hangon to HFC for Foxtel. It’s a long-term strategic asset. And I can’t see Telstra bothering to switch on broadband on HFC if it has to be open access to all-comers and price-controlled by ACCC. Think of all the future headaches of having to negotiate with ACCC for future upgrades (replay of FTTN regulatory impasse!)

          Government contracts are the bread and butter of engineering contractors such as Leighton. Mining companies come and go; the last thing you want to do is play hard ball and sue your largest long-term customer.

          • “The entire broking community is now salivating at the prospect of almost $20 bln in cash payouts to Telstra from the Government”

            Dude its 11 Billion, thats not changed. Thats ducts, pipes and customers.

            “Telstra will bend over backwards to preserve the value of the deal. If it means handing over access to the copper, why not? ”

            You’re kidding right? They’d just hand over access because it seems like a good idea? When they could charge the Government extra? The same Liberal-Conservative Government that started this mess, by not removing Fixed-Line infrastructure control in the first place, all because it seems like a good idea?


            Theres no way a company in their position who essentially can hold the country to ransom, would just “give it up”. Telstra WILL do everything they can to shaft that Liberal Government because they know full well that they can double-dip here. If you think they’re that silly, you and I have different opinions on how clever telstra are.

            Telstra got a free-ride the last time a Liberal Government was in power, because they know that they traditionally do things on the cheap. Telstra scored a full-blown network for free, this time – the Labor Governments at least given them an incentive to stick around – by not allowing them bids on future spectrum. The Labor Government had a card to play. What do you thinks going to happen when the bid’s over? What possible thing could they offer telstra to sit at the table?

          • This is a puzzle, because when financial market analysts work out the payments that will be made to Telstra and Optus over this period in return for migrating their customers and shuttering their networks, and for NBN Co’s leases over Telstra infrastructure, they come up with considerably higher nominal figures – usually around $6 billion higher. By their reckoning, if the rollout is on time, NBN Co will have to pay Telstra about $19 billion and Optus about $2 billion in round numbers.


          • @ malcomturnbull.com.au !!!???

            thats hardly independent commentary even if it is presented by our 1%trollster…

          • 1% substance. No actual comment, just a copy/paste job. It’s lazy just like the coalitions “broadband” plan…

          • thats from Turnbull who we already know is a questionable actor in this at best. got any of these ’19’ and ‘2’ billion figures from anywhere ELSE then? and no the Australian doesnt count.

            in any case ive certainly not heard those figures in any media i follow; its almost universally 11bn and 800 million reported for the two. where are you getting those outlandish figures from?

          • And so taking this information from Malcom Turnbull’s own website I should take this gospel?

            On this website, he bases this claim on almost zero FACTUAL information that the governments agreement with telstra will go over the contractual arrangement they have.

            So given its a contract, I happen to deal with people’s contracts all the time – my understanding is that the payment is fixed in time based on the agreed amount at the point the agreement was signed.

            con·tract/ˈkäntrakt/Noun: A written or spoken agreement, esp. one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

            Verb: Decrease in size, number, or range.

            Synonyms: noun. agreement – covenant – treaty – pact – compact
            verb. shrink – narrow

            Ok so now that we understand what a contract i,s and we know that the defined cost of the contract is set in stone at 11 billion, why would it increase? Mr Turnbull I think needs to revisit his statement, given that his costings are probably as accurate as his claim that FTTN would cost less than FTTH.

          • Indeed Apollo.

            If I were, like our friend, was politically up to my neck in BS, I’d retort with info from conroy.com.au, but I’m not so instead I’ll just say WTF?

          • Seriously, what does the term; stands out like dogs balls mean to you?

            Everyone has seen your comments and others have mentioned it too. So come out of the closet.

            But even once you do come out and disclose the worst kept secret at Delimiter, if you have a factual legitimate argument (not here say and your opinions), let’s hear it…

            All I have seen so far is regurgitated electioneering.

          • Your analysis is good but it is highly unlikely that Telstra’s fixed line business would be affected with FTTN, but Telstra would happily hand over its copper network and be well compensated. It can win both ways, if the govt is incompetent enough to let it. Let me explain…

            For fixed line POTS and broadband Telstra would happily wholesale from NBNCo’s FTTN network and accept also the compensation, there is no loss there.

            The key is that Telstra already has a fibre network that covers the majority of business and comerical districts AU wide. Its problem has always been its business customers who are locked into its copper network. for the government to build a FTTN network would be disasterous because 1) it will have to sell to an ever falling POTS/Broadband market which is being eaten away by wireless, 2) it would force business to transition off the copper not onto the Gov’t FTTN xDSL lines, but onto Telstra’s fibre. see ***

            Leveraging business services off FTTN is inferior and yesterdays technology, FTTN would primarily be a xDSL based carriage, hence SHDSL, VDSL, ADSL – all are low grade business carriage systems …Telstra will outstrip it in quality by offering business data over fibre, which it can already do today but is holding back because of its monopoly over the copper network.

            So in conclusion , the smartest thing the government can do is to retract all NBN builds, and surprise surprise – get out of the market. Regulate a FTTN telstra build a la 2007 Sol Trujillo, and we end up pretty much where we were.

            *** for more techy stuff, the problem with FTTN is that it will only offer data carriage via DSL, today Telstra’s copper network is capable of delivering all the legacy protocols of the last 30yrs. FTTN would cull this and offer only DSL,this poses a big problem. The only solution is to use fibre which can accommodate this much better, this means Telstra get an immediate advantage.

          • Thanks for your insights — much appreciated.

            Telstra will outstrip it in quality by offering business data over fibre, which it can already do today but is holding back because of its monopoly over the copper network.

            Does that mean the average quoted price of Telstra fiber will fall under FTTN (or Telstra will introduce some lower-priced and spec’ed offerings for businesses to transition off copper)?

            l guess the implication of a government FTTN build is “lower ROI” relative to FTTN built by an integrated telco. Or, more accurately, a horizontally-integrated telco is best placed to “subsidise” a FTTN upgrade.

          • I’ll throw you a bone 1%…

            Perhaps Telstra will agree to hand over the copper gratis, to the opposition if they win government?

            That is, if the government in turn agree’s to hand Australia’s comms completely back over (or even more than previously) to Telstra?

            This would include giving Telstra the already built NBN, allowing them to offload the USO, to off load copper maintenance or; generally demand huge subsidies well beyond what they would be entitled to, in relation to the USO/copper upkeep.

            Of course even Telstra would have to agree to something, so they’d agree to separation, for the whole dirty deal to at least look partially fair…

            Now I know that would be nirvana to you and it’s hard, but please take off your two hats (Coalition and Telstra) and then tell us rationally, would that really be good for competition, our future needs and Australian consumers/taxpayers?

        • Basically, the loss of the copper fixed-line business is not such a big deal because it is open access. Everyone flogs voice and DSL. There is no competitive advantage in terms of product differentiation. Telstra is happy to give that up in return for the cash value of the wholesale business.

          Foxtel on HFC is an entirely different matter. This is the key difference between Telstra’s product set and other ISPs’. Thodey will draw the line there.

          However, it would be silly to force everyone off 100mbit cable broadband onto inferior FTTN for the 3mln households that have access to HFC. So, we could end up with this *wicked* situation where Telstra is allowed to use HFC to compete against NBNco’s FTTN in broadband.

          “Infrastructure competition”!

          Of course, iiNode will be pissed off to no end.. . . ;))

          • Infrastructure Competition can already happen under the current NBNCo FTTP system, there are just rules that these other infrastructure companies have to abide by, namely making sure it has the same open access policies as NBN itself.

            Why oh WHY do NBN haters forget this fact?

            The only problem is that no private company is willing or has ever been willing to lay down infrastructure, because it costs too much, only reason Telstra had to do it was because they were obliged to do it, otherwise the ACCC would go after them.

          • Infrastructure Competition can already happen under the current NBNCo FTTP system, there are just rules that these other infrastructure companies have to abide by, namely making sure it has the same open access policies as NBN itself.

            The Labor Government recognises that NBNco will only survive (if at all) as a monopoly with zero competition. This is why they are shelling out billions to Telstra and Optus to shutdown all competing networks.

            It is probably unconstitutional to pass a law saying you can’t build a fixed network. But the Government needn’t go that far — they just had to exercise their regulatory powers and mandate “open access”. The effect is the same because no telco will build or upgrade existing networks in brownfield areas under an open access regime. No competitive advantage = no incentive to risk own capital.

            The only exceptions would be municipal initiatives (or small, community-built networks) and some greenfield builds which have unique business models that are different from conventional telcos.

            Even in the case of greenfields, due to NBNco’s bungle, Conroy had to grant temporary, anti-cherry picking exemptions to several impending Telstra Velocity greenfield builds because the “open access” requirements mandated by the NBN legislation would see Telstra immediately abandoning the sector and leaving many new estates in a lurch when NBNco is not ready to step up.

            So, while on the face of it, the “open access” legislative provisions appear designed to “promote open access networks”, the real effect and underlying intention is to deter private network builds in competition with NBNco.

            Things are never what they seem at first glance.

          • one percent poster wrote:
            ” the real effect and underlying intention is to deter private network builds in competition with NBNco.”

            Of course it is. How do you expect the NBN to work if it isn’t the underlying infrastructure of the nation? That is the entire point of the build. NBNCo is the only wholesale network. That is my friend, by design. You are permitted to build wholesale if you wish but you cannot undercut the NBN… end-of-story. In addition you have to offer the same level of access. Otherwise every tom dick and harry would build in the high density regions where profits can be made, undercut the NBN network and undermine the entire point of having ubiquitous access across the country. What the NBN makes in the city helps to pay for what it delivers in the rest of the country.

            Just remember that we tried it your way for 15 years… and look where that got us? This way we get an even playing field of retail players. Wholesale of any type has to offer the same level of access the NBN does at the same price. So if that’s too harsh for alternate private networks then so be it. We are not deploying a tin foil hat here. Its the infrastructure of a nation and I for one don’t want to see it dismantled by private enterprise greed thank you very much.

          • Please stop Kevin, you are speaking waaaay too much sense :-)

            Yes through sheer ideology and even after, as you say seeing 15 years of comms disorder – disorder which I’m sure most of the NBN critics complained about too – some still are unwilling to contemplate an across the board network which is fairer for everyone and wish to return to the previous disarray.

            I think the bit they find hardest to accept about the NBN, isn’t the network, nor the funding… in fact, they really can’t find anything substantially wrong with it… apart from who’s initiated it.

          • 1%. I appreciate your fervour.

            WDSL is another technological dead end. I won’t go into the detail as it’s discussed in detail elsewhere but wireless is incapable of delivering the data requirements of home users now and forever more.

            Telstra’s contracts for access to the copper in a FTTN rollout do not have to be free or “why not” as you put it. They are a commercial organisation with an obligation to maximize profits for their shareholders. They will claim the maximum legally obtainable value from any alteration to the existing contract specifications and then renegotiate the new terms and conditions. This will not be a null sum.

            There is also a considerable body of evidence regarding the long term pitfalls of FTTN. It’s orders of magnitude more expensive to maintain and upgrade than FTTP, it’s only barely adequate by current standard and would be outdated before it could be completed. It’s only benefit is a lower initial outlay, much like buying a fridge that has a zero star energy rating because it’s $20 cheaper. Any cost benefit analysis which has as one of it’s terms the TCO over a 30 year time frame will clearly show this. As one experienced BT engineer recently put it

            “Fibre to the cabinet is one of the biggest mistakes humanity has made,”

            I know you mean well but you sound too emotionally involved to actually be able to make objective comment on this subject.

          • You should have followed up Peter Cochrane’s comment about the FTTN street corner cabinets to the effect that they have a car battery inside and once the “chaps” find about that, then there is going to be lots of vandalisations.

            You can just picture it, a couple of dozen Nodes being hit in a night and all of a sudden a suburb loses all Comms. I wonder where in either LNP or Telstra’s Risk Mitigation Strategy this one is covered?

          • “No competitive advantage = no incentive to risk own capital.” — that alone is the key reason the NBN was proposed, and implemented.

            I’m curious as to when Wollongong would get HFC installed, or when regional Victoria would be as fast as Melbourne. Did you know that parts of Victoria only had dialup until 18 months ago?

            You’re spot on – the big companies wont risk their own capital when there’s no advantage, and what that means is continually cherry picking the prime locations with the next best thing, while leaving the dud areas to languish in 10 year old technology as long as they can. CBD’s get 4G for example, what about suburbs?

            The decision here is to let that keep happening, or to reset the clock so the vast bulk of the population is on an equal playing field again. After that, the differences are semantic. If you really believe the cost is the biggest issue, then vote for the Liberals who will end up cooking their own books in the future to justify their non-position.

            The NBN is truly one of the cheapest options to get our unique country advanced to world standards. There may be ways to trim the fat, there always is, but on the whole the “solution” offered by the opposition isnt it. It simply delays the inevitable, and ultimately costs more than what the current plan costs.

            Here’s a question for you 1%. If the Coalitions plan costs $16.7b to implement, how is that money recovered? I for one havent seen where us, the taxpaying public, gets that money back into public coffers. At least with the NBN you know where the money is going, and how its coming back.

            Oh, second question, followup to the first if you answer. Many anti-NBN whinge about the $36b cost of the NBN, citing Govt history of projects costing more. Wouldnt the $16.7b cost of the Coalition plan also be subject to the same fear? If that money has little to no chance of being repaid, whats the real cost to the taxpayer?

            For the NBN, the real cost is still zero, or near enough, because of how the NBN is planned. Without any details from Turnbull and friends on the exact way they will deliver both global high speed broadband, AND pay for it, we can only assume a worst case scenario where it costs $16.7b plus whatever fear factor % is applied. If its a ‘standard’ 20% uplift, thats another $3.3b for starters, taking the cost to over $20b.

        • the problem with NBN is that FTTP is a broadband network and is not fit for most business and commerical WANs out there at present or into the future…

          It is designed as a consumer phone, internet and media platform, what they call triple play. Problem is, most businesses have no use for this in their daily operation.

          ergo, copper stays in, with the new fibre, telstras fibre stays in, things get very congested…

          • I have no idea why you suggest business is uninterested in data and phones, especially if they are at a price and quality beyond anything currently available.

            … or should we just take your word for it?

          • lulwut, people are going to use ADSL and copper services instead of NBN Fibre, because NBN fibre isn’t as good for businesses??

            Best argument ever.

          • Just once I’d like an anti NBN to have a good argument. It seems that the only negative arguments are just rediculous crap manufactured by Liberal supporters. Actually supporter is a too weak a word, fanbois, and 99% of them seem to be completely nuts.

      • Hear hear Renai…

        Realistically, those who are dictated to and live their lives according to their political masters demands, will always argue and never give an inch in relation to the NBN, because they are not allowed to.

    • 1. More or less
      2. Definitely
      3&4. They’ll, as Turnbull has said, let the contracts finish naturally. Assuming they win 2013 that means they’ll talk about how horrible the NBN is for the 2013 election and say “our hands are tied” till 2015-2016 while they build up their studies and cost benefit analysis and such. By then they’ll have to sell what their great new idea to finish the, then 50% done, NBN.

      Call me a cynic but I think they’ll let the NBN finish and claim that it’s success is due to their “solid management”.

      • I’ve thought that would be the likely outcome for some time. We’ve pretty much reached the point of no return, and will definitely have passed it by next year when the contracts come up from renewal.

        Abbott’s mojo is attuned to winning office – not serving in office. For a foretaste of that, see Barry O’Farrell in NSW, aka “Mr Do-Nothing”.

        • doesnt it pretty much depend on the makeup of the senate? ie having folk there that will nobble any attempt to change the parameters ot the NBN insofar as thats possible from the house of Reps?

    • “2. The Liberals are simply playing politics and telling lies about Labor’s NBN;”


      “3. Malcolm Turnbull apparently “secretly loves” Labor’s NBN”

      Turnbull like most coalition members are actually in favour of the NBN (or if you please in favour of “Labor’s NBN”)

      “boy, are you guys in for a rude shock when the Liberals take office in 2013”

      Well actually no, we know what will happen if the NBN goes ahead and we know what will happen if it is cancelled… also the shock wont be as great as the one the coalition got after they failed to fool the independents with their “broadband plan”.

      Also since you are so sure the Liberals will take office in 2013 what are you doing here exactly? Seems a wasted effort whining about the NBN all day long when you can predict the future and know for sure you will get that “great” FTTN patchwork you want.

        • My view is that even if they wanted the proposed FTTP network is technical impossibility to build. Guess this is what happens when you like politicians make decisions.

          There is way too much critical services currently operating off the copper network. While FTTP caters for home uers of broadband it does not allow business networks the same seamless change over. This is because the chosen technology ie. GPON is designed for residential broadband use, as can see where it is deployed, ie. in the suburbs in residential areas.

          This is the key difference between the copper network and GPON. All business networks have built themselves around the copper network and various WAN technologies. It would not be possible to upgrade suburbs or regions to GPON and not cause a business WAN to lose links to some of its sites,meaning it cant do business. Nor is there a transition technology that would allow GPON or direct fibre to carry copper data services.

          The inherent problem particularly with GPON is that its a mass deployment broadband and internet based technology, and is not compatible with private WANs, and there is no way to reconcile this, as GPON was not designed for the purpose that the Gov’t is trying to implement in the NBN.

          The same is some what true for copper data transition to fibre, there is as yet no clear cut transition plan, unless each business devises its own IT transformation plan to upgrade its network, which would cost their business millions.

          As a result I think its likely that the NBN will be built with the copper network in place and I doubt the copper would be removed long after the NBN is complete.

          • Enter the arm chair experts with no idea what they are talking about but clever alias’ that make them appear to be in the industry and knowledgable!

            Ppl, working on an ISPs residential help desk does not make you an expert in Telecomunications!

    • 1. Pretty much. The inability to show any figures to the contrary, just making assertions that it is wrong and not showing any figures as to why (please spare me your own personal assertions, I have read enough of that crap)

      2. Definitely

      3. I don’t know if he loves it. I think however a lot of his opposition is because that is what he has to do. I am not sure you even truly believe some of the stuff you come out with. You seem intelligent, so some of the really stupid arguments seem like spin.

      4. No idea. They may just leave broadband in limbo, they implement the same thing “differently” they may go for FTTN. I have no idea because their “plan” is so vaige and in the air anything could happen. I assume since they want to do a study once, or if, they get into power they don’t plan give many concrete details before the election.

  5. Right now I’ve got all fingers and toes crossed as I’m counting the houses the NBN passes, while looking at a government teetering on the edge. The Coalition are for 20th century business – manufacturing and the daily commute to the office. The NBN represents a leap into the 21st century, the global marketplace and better living standards for suburban and rural citizens.

  6. “national, not nationalised”

    Aha! Therein lies a core aspect of the Liberal party’s opposition to the NBN.

    They want it to happen, they just don’t want it to be owned by a government corporation in the best interests of the nation – they’d be much, much happier to see it in the hands of a privately-owned telco who would screw the nation for as much profit as they could get.

    IMHO, in the event of a Liberal win in 2013, I expect the NBN rollout to continue – but under the ownership of a private telco, most likely Telstra (and we all know how wonderful their pricing & commitment to competition has been in the past…).

    • “IMHO, in the event of a Liberal win in 2013, I expect the NBN rollout to continue – but under the ownership of a private telco, most likely Telstra”

      Maybe Abbott was being truthful. His claim of 3 times the price for broadband is taking into account him gifting it to Telstra.

  7. “In addition, it is unclear whether the Coalition’s rival broadband policy will be “available sooner and at much less expense to taxpayers”.

    How the Libs can claim to deliver decent fast BB sooner cheaper than the current NBN rollout simply beggars belief and is logically impossible considering the following:

    * 1/3rd of Aus will have FTTH build or under construction at the time of the next election

    * stopping the rollout will actually delay ppl getting FTTH

    * if they want to rollout FTTN then they will need to spend up to 2 years changing legislation and doing a new deal with Telstra to BUY/LEASE the copper (Telstra wont give it away free) and will have to add another 10billion or so to the current agreement (they still need all the ducts to get fibre and power to nodes so the copper is an EXTRA expense).

    * It sure as heck wont be cheaper because the “Network Co” will have to pay for power to the 50,000 odd Nodes (fibre doesnt magically convert to electrons and jump down the copper wire by itself!) and on top of that we have the ongoing copper maintenance costs which are far higher than that of an all fibre network.

    *So to wrap up; we have 20billion in payments to Telstra + the 16 Billion to roll out FTTN giving us a grand total of 36 Billion dollars for a 70% FTTN network!!!! (same as for FTTH to 93% + LTE + Sat)

    I could go on but they are a few of the major reasons we can use to call BS on the Liberal claims of “we can do it faster” – we already knwo the “we can do it better” is pure BS because Copper will never be better than Fibre!

    • “(fibre doesnt magically convert to electrons and jump down the copper wire by itself!)”

      I’ll be waiting for a plan to have little solar cells at the end of each fibre to make this possible ;)

      • Awesome, so under an Noalition we’ll only be able to get BB on sunny days, no night time net at all or on rainy cloudy days!


          • FTTN would have cost $4Bn as costed by Telstra in 2007 for 5 metro cities.

            Addition of $4Bn would be likely to upgrade regional with FTTN and wireless.

            If the govt and Telstra could agree on terms, telstra would pay for the $4Bn cities build. Govt pays $4bn as regional BB plan as no private entity would do it.

            so in all it costs only $4Bn for a pretty good solution for all.

            But NBNCo is trying to do something quite complex build wise, more likely to cost $60-$80Bn, and probably wont return a profit as wholesale business.

          • That was for a metro only rollout covering barely 60% of the population and then Telstra would have used it to shut out ALL competition and raise prices significantly with a rock solid monopoly for iirc about 10years. Do you really want to go back to a 100gb plan costing $200 per month? In Howard found that prospect unacceptable!

          • “so in all it costs only $4Bn for a pretty good solution for all.”

            For all except the internet users of tomorrow…

            “more likely to cost $60-$80Bn”


            “and probably wont return a profit as wholesale business.”

            It most likely will.

          • Hubert, I find it interesting that those who support FTTN keep telling us that FTTP costs will blow out from $36B to $60B-80B, because that’s what happens with government policies.

            So going by that rationale, why are we saying the oppositions FTTN is $17B, shouldn’t we also conclude that FTTN will (according to their logic) blow out to $30b-$50B?

          • “shouldn’t we also conclude that FTTN will (according to their logic) blow out to $30b-$50B?”

            I dont see why not. Actually come to think of it perhaps we should really be saying their FTTN patchwork will blow out to 77 – 97 billion. 17 billion + their cost of doing a proper job with FTTH after it’s done. Oh and add about another $4 billion for each year it is delayed.

  8. Fixed Broadband Optimisation program to provide DSL services or high speed equivalents, a $1 billion grant program for fixed wireless networks in rural and remote Australia areas and a $1 billion investment in fixed wireless networks in metropolitan Australia,

    • Out of curiosity, where dd the $1 billion figure come from? Is this based on some sort of actual analysis that you can share? Are we to believe that $1 billion represents the sum total of the deficiencies in Telstra’s ADSL network? Or is it just a random and convenient-sounding figure?

    • yeah because giving Tax Payers money to private companies which then use the money to boost their own profits is a great idea!

      • Ironic (or rather idealistic idiocy) isn’t it djos.

        The NBN critics claim waste, when the NBN is being funded via investment and will inevitably be profitable and an asset for the nation.

        Whereas, giving $b’s to private companies to build and own our network with no ROI and no asset ownership for the nation, isn’t…


    • Lets look at the two schemes the LNP criticize Labor for.

      School Halls – Giving public money to private enterprise – who proceeded to do what was in their best interest, maximizing profits by delivering the bare minimum of the contracts.

      Pink Vats – Giving public money to private enterprise -who preceeded to what was in their best interest, maximizing profits by taking short cuts in safety.

      Now the LNP Broadband Scheme – Giving public money to private enterprise – who proceed to maximize profits by….

      Well based on the Telstra experience with the CAN I would go with maximizing profits by delivering the bare minimum of the contracts.

      All projects administered or to be administered by the public service.

      At-least with NBNco Labor bypassed the public service by setting it up as government owned company. Like a company they will maximize returns by… however unlike a private enterprise those returns aren’t necessary monetary profits. Those returns are things like having the “profits” available to extend and improve the network further.

      There are actually a number of government services that should be setup similar to NBNco but it would never happen because of the entrenched public service.

      • SMEMatt

        You are talking crap. Unmitigated, ignorance based crap, do some research instead of parroting the Media and Party lines.

        As one famous wit once remarked “its best to keep your mouth shut and be thought a fool than open it and confirm that impression”

        However, in the past 2 paragraphs you demonstrated a grasp of having some intellectual capability insofar as moving your argument to a reasoning basis.

  9. I find it amusing that so many think that we don’t need to take Mr Abbott at his word. They seem to be saying “it’s ok, he’s lying about halting the NBN”. In some cases this smacks of double standards (“I won’t vote for Ju-liar because she lied about a carbon tax**” vs “I’m going to vote for Tony because I don’t believe him when he says that he’s going to scrap the NBN”).

    ** Actually she didn’t lie, we don’t have a carbon tax, we have an ETS.

      • im quite sure abbot would terminate the nbn.

        they would have to settle the contracts.

        doubt labor ever believed in the NBN at all,but it costs now run to $1Bn but to win the votes of a few independents and stay in power, it was worth the money, even if the most was burnt.

        one simply cannot deny the fact that after just scraping though the election – won by bumpkins and the sell of broadband to the bush – a total fluke by the way…. that NBNCo started recruiting 1000 staff and money started pumping it.

        if they had an easy win, labor would not have even bothered to start this company and would have just back flipped on this $43Bn project.

        • l think l agree.

          While Telstra is “protected” no matter what approach the Libs choose to take, l think the future Government will find the whole process of negotiating with Telstra to lease the copper, writing SLAs and finally privatising the contracting party (NBNco) so unnecessarily convoluted and complicated (as well as creating unnecessary risks for the Government). . .

          l think Abbott will decide wisely to completely halt the NBN and reverse all of Conroy’s so-called “reforms” lock, stock and barrel.

          This approach makes so much more sense:


          • 1% your understandanding of the the word wise is seriously flawed, cancelling the smartest piece of infrastructure ever conceived for this country is nothing short of economic vandalism.

            But then I’d expect that from someone described by his own colleague (John Hewson) as economically illiterate!

          • You guys don’t realise that Labor’s FTTP NBN is already being built in close co-operation with Telstra. . . .

            A redesign to build FTTN would only further enmesh the complicated, entangled commercial relationship between Telstra and NBNco to a higher degree of complexity…. to the point that it simply makes better sense from the point of view of transactional simplicity and taxpayer risk minimisation to just completely scrap NBNco and let Telstra do the job on its own instead (with the assistance of direct subsidies if necessary).

          • Of course Telstra is involved, as they are the incumbent who primarily own everything :/

            And why wouldn’t NBNCo, who want the best outcome, included Telstra who have the know how, the blueprints of the existing network and some very clever people working for them, FFS?

            But, just let Telstra do it..?????

            Telstra DIDN’T WANT TO DO IT, they withdrew from the initial negotiations with the ACCC, because they couldn’t get the big 3. New monopoly, maximum ROI and minimal regulations. Then when given another chance with the RFP, played games by submitting a non-compliant bid, which was rightly tossed out.

            That’s the facts, colour them as you will (and I’m sure you will)…

            Having Telstra’s involvement in the NBN and paying to use their ducts is a bit (READ LOT) different to Telstra again running Australia’s comms and being in a position where they can again hold governments to ransom as they, via Sol, particularly (and unfairly so) with John Howard.

            Not to mention the competition nightmare of handing it all to Telstra and the fact that FTTN is technically obsolete, because the copper is obsolete, etc, etc… “sigh*. Around and around we go…!

            Gees the Lib and Telstra fanboys really are clueless in their vain attempts to discredit at al costs!

  10. Thud. Thud. Thud.

    Abbott is all flash and no sizzle. Actually, there’s no flash there either.

    Why the ever-sanctimonious Liberal Party continues to compromise its integrity by peddling this BS is simply beyond explanation. And why they retain someone as embarrassing as Abbott as their figurehead, even stranger. He and his entire party are lucky that, the way things are, a whole lot of Australians would happily vote a blind, drunk, rabid donkey into Parliament as long as it wasn’t named Julia Gillard.

    • “And why they retain someone as embarrassing as Abbott as their figurehead”

      They are conservative. They are so desperate to win the next election they don’t want to risk it by rocking the boat. Furthermore they know that if they win with a mental midget like Abbott they can have bragging rights. The big question for us the voters is do we really want a party like this that is unwilling to get treatment for a cancerous growth? It can’t be healthy and they cant think too much of us if they don’t.

      “the way things are, a whole lot of Australians would happily vote a blind”

      Indeed. I believe the majority don’t really care for real democracy, it’s all about a football team for them… we need more Tony Windsors.

  11. Personally, I found it amusing that all the coalition has in the way of encouraging people to vote for them is, “We’re not labour, and we’ll tell you our plans 12 months after you elect us.” Yup, my confidence in them just skyrocketed.

    • Just ask the voters of Victoria about that one. Predictably, the need for budget cuts arose and the already-struggling education system was first to go on the chopping block. It was so bad that the education minister wrote to the TAFE sector to apologise.

      Not to mention all the things Baillieu promised that got him elected in the first place, but will never deliver. Expect more of the same at a federal level if Abbott, Turnbull, Dewey, Cheetham & Howe are elected next year. Sadly, the politics of discontent are alive and well but there is no indication they will be for the betterment of Australia.

      • Too true, and Fatty is flying in NSW too, right? Oh yeah, the fracksters got a green light, I guess that is doing something…

  12. Look at that smug smirk in the included picture. God I hate him.

    “Cooked Books” is a serious allegation, he is basically accusing the government of fraud when there is no such thing. I can’t believe he gets away with so many outrageous lies.

    Just a tip for you Tony, using widely accepted accounting practices doesn’t count as “cooked books”. A better example is getting your election costings wrong by a number which has 11 digits in it, getting an accounting firm to give them a quick once over (who were subsequently fined for breaking accounting standards) and then pass them off as “independently audited”.

    • It basically boils down to a disagreement about the value of the assets sitting on NBNco’s balance sheet.

      When the Libs take office, the incoming Finance Minister will have to assess the fair (or recoverable) value of the assets currently sitting on NBNco’s balance sheet at historic cost. Any difference will have to be crystallised in (or run through) the Budget, and will affect the bottomline on an accruals basis.

      In his last post on Delimiter, Malcolm indicated that he believed that asset writedowns are highly likely. The Libs are basically questioning NBNco’s practice of fully capitalising the costs of building a brand new fiber network when the prospect of total cost recovery is far from certain. This is actually prudent accounting.

      That article by the parliamentary librarian actually touches on the various scenarios where NBNco-related expenses will directly impact the Budget (e.g. subsidies, etc). A revaluation of the Government’s investment in NBNco by the Shareholder Ministers would be the relevant case in point when Abbott talks about “cooked books”.

      • Hi One percent poster,

        Yes, you are quite correct that an asset imparement expense can be crystalized under AASB 136 (imparement of assets), and that this will have an impact on the general government budget outcome.

        The easist way to manipulate this to manufacture an asset imparement expense would be by such expeidents as assuming no extra subscribers are ever connected to the NBN over it’s 50+ yr lifetime, assume that a “market borrowing rate” of say 15% rather than the less than 4% rate that the government borrows at or the 7.75% Telstra borrows at, or by assuming that fiber will be valueless after 20 years due to mobile broadband technology developments.

        The easiest way for the NBN co to render this manipultion of the financial statements completely irrelevant would be by preparing a revised corporate plan from 2012-2015. This would superceed the existing corprate plan that ends in 2013 which doesn’t have the timing and cost impact of Telstra deal. Once this plan is published, it will form the framework that the auditors will use to apply the AASB 136 (imparement of assets) imparement tests, as well as have the benefit of demonstrating to the public the financial probiftability of the NBN.

        So yes, One percent poster, you are technically correct that “cooked books” over the NBN can result in budget losses, but the question is open as to who the book cooker is.

        • Hi Lachlan,

          Which body audits GBEs such as NBNco? The Auditor-General’s Office?

          I’m not sure it’s quite so simple for NBNco to rig the auditing process and results just by publishing a new Corporate Plan with more rosy forecasts.

          For example, I recall reading media reports of Quigley arguing in defence of NBNco’s business model at some Commsday event that NBNco would “seek to earn back the capital invested over a longer time frame than normal commercial enterprises” (or similar sentiments).

          In this specific respect, are there special exemptions under AASB rules that allow GBEs to adopt unusually elongated time frames in calculating depreciation schedules?

          I’m certain private sector auditors wouldn’t allow a private company to get away with the kinds of accounting tricks NBNco appears to be intimating.

          Further, you talk about “subscribers connected over 50 year lifetime” —- in the space of half a century, you can have two World Wars which change the face of the earth, thousands of companies arise from nowhere then go bankrupt and vanish, and numerous unpredictable cultural and technological disruptions, etc.

          If I was an auditor and someone started trotting out 50 year forecasts to justify delaying capital payback and inflating near term accounting profits, I would be raising my eyebrows.

          • you are deliberately misreading him. from what i understand of it the 50 year comment was a hypothetical argument using proposed expedients to manipulate NBNco into the position of taking up impairment of assets expense but noone at all has suggested it will have NO new customers for 50 years – that is a self evident nonsense. as are the other suggestions (interest rate assumption, or the $0 residual fibre value calc at 20 years in). it is a longer time frame investment but NOT 50 years.

            in any case it is completely reasonable to expect a revised Plan post Telstra agreement, and THAT is what you should be looking to. talk of cooked books is decidedly premature.

            as for audits i dont know about financially but it reports to parliament (senate?) something like 6 times a year to various committees and oversight units, is that redundant enough for you? i dunno about you but if i was wanting to run a crooked outfit and glom some money off the top for me i wouldnt be doing it with an outfit thats so scrutinised as NBNco is.

            particularly AFTER pink batts et al. and after people have repeatedly and obviously painted a large red and white bullseye onto Quigley and NBNco. in contrast to many govt plans and enterprises (QLD health payroll anyone?) this one is far better organised, run and investigated than ive seen in a long while.

          • Ah yes speaking of 50 year forecasts, just proves why the calls for a CBA are ridiculous…!

      • There can only be a disagreement on the current value of the assets because the project is in an early stage. If the project was stopped today, the value of those assets would likely not be equal to what has been spent on them. Yet if we assume the project will be taken to conclusion, it IS a valuable asset, no matter what way you look at it.

        If the Liberals get in and cancel the project, it will be THEM destroying the value of the asset. It infuriates me that it is almost inevitable that we will get a PM so hell bent on destroying Labor’s legacy that he would rather throw away billions of our tax payer dollars and deprive us of an unquestionably better broadband network rather than allow the project to come to its natural conclusion.

        • To all the above. The Auditor, as the NBNCo is a GBE will in all likelihood be the Australian National Audit Office (a Commonwealth Govt Statutory Authority) with a hell of a lot more credibility than the entire front bench of the Opposition will ever have.

          From my reading of what has been written about Asset values etc., it looks like none of the resident doom merchants have ever run a large scale project. Chaps its not like trotting down the to local every Saturday morning to stock up for the next week. There’s a hell of a lot of advance planning, commitment and procuring and holding stock until its needed. But all you experts knew that didn’t you!

  13. I Disagree that HFC is an Acceptable outcome compared to FTTP.

    Simply because HFC uses nodes and bandwidth sharing technology.

    I had HFC (Telstra) and in that time that I had it, during peak times, the speak dramatically falls – this is because HFC has nodes allocated bandwidth – HFC has limited path upgrades as well.

    FTTN has major flaws that it has issues with Current (that is provided along the copper networks) and distance (requires that Nodes to be placed at 500-1km), which we all know won’t happen.

    Anyone that has any balls to say that HFC and FTTN is good needs a good kick up the arse.

  14. “Opposition Leader Tony Abbott appears to have made a number of mistakes or factual inaccuracies in a wide-ranging speech ….”.

    Very gracious of you Renai. I would call them Lies and BS. As Abbott continues to demonstrate, he is quite prepared and happy to sacrifice truth, honesty, and integrity in his efforts to gain power and the position of Prime Minister.

  15. > It is true that some retail services have expressed concern that the wholesale pricing scheme utilised by the National Broadband Network Company could eventually lead to higher consumer prices under the project.

    The NBNCo Corporate Plan (http://www.nbnco.com.au/news-and-events/news/nbn-co-corporate-plan-released.html) contains many statements that their stated intention is to increase the ARPU. That is to on average they plan to have people pay more for their internet connection.

    Here are some quotes from the NBNCo Corporate Plan to support this assertion:
    p36 – Telstra, Optus and iiNet have seen their On-Net fixed broadband ARPUs growing ahead of inflation, at about 3% per year since FY2007

    p91 – Achieves ongoing ARPU growth for NBN Co by facilitating the upgrade of services to higher speeds and increased usage.

    p103 – This has been achieved by keeping the AVC as low as possible in order to encourage consumers up the speed tiers, and relying on CVC revenues to drive ARPU growth.

    p116 – Challenge for NBN is to drive ARPU by moving customers up speed tiers

    p118 – Despite the movement of residential consumers up the speed curve shown in Exhibit 9.12, the growth in AVC (PIR) ARPU is relatively modest. This reflects the small price differential between AVC tiers, and the decline in prices for the higher tiers. However, the consequence of more End-Users moving to higher speed tiers is reflected in the significant rise in the contribution of the CVC to overall ARPU, as increased speed drives increased usage.

    p132 – If the rate at which End-Users are willing to consume bandwidth-hungry products and applications slows down over time, and / or End-Users stop moving through tiers because of price and speed inertia, then there is a risk that the growth in speed and usage will plateau after a number of years. This would limit opportunities to grow ARPU in real terms other than by price increases at that time.
    Under these circumstances, speed and usage growth would not be sufficient to generate sufficient real ARPU growth in order to deliver the expected returns.
    As mitigation, NBN Co has the flexibility to regularly monitor, and adjust accordingly, the rate at which nominal prices are reduced in order to maintain the revenues in case of lower volumes of demand.

    *How will this happen?*
    Prices for actual services will (almost certainly) decline, but at a rate significantly less than the uptake of faster services / downloading more.

    Plans for AVC pricing are outlined on page 101:
    * 1000/400Mbps falls from $150 to $90, while the average speed grows from 30Mbps to 230Mbps.
    * Price falls by 40% while average speed grows by 760%

    Plans for CVC pricing are outlined on page 103:
    * Starts at $20Mbps/Month when the average data usage is 30GB/Month and falls to $8Mbps/Month when the average data usage is 540GB/month.
    * Price falls by 2.5 times, while the average data usage grows by 18 times = growth in revenue from CVC of 720% when accounting for price falls.

    • Knock it Off Mathew, you bring up the same FUD over and over again; the reason the ARPU goes up in their predictions is because ppl will buy faster speed tiers as apps develop and use more data, not because NBN Co plan on raising prices – in fact NBN Co have said they plan on lowering prices over time!

      • Thanks for repeating the explanation I provided for why ARPU will rise and then calling my post FUD. Just because NBNCo planning to double ARPU doesn’t fit with your world view doesn’t mean that it is FUD.

        A more balanced approach to evaluating the NBN would be helpful for everyone.

  16. Mathew

    ARPU stands for averages it does not state it will increase.

    Falling prices happen over time – it’s not instanst.

  17. I think we are all wankers…what I mean is, lets get back to the printing press and the re actions in the world and stuff. Everything above is “the printing press does this, the printing press does that, the printing press means this, the printing press means that”

    Freedom on the internet is the modern version of the printing press.

  18. Folks seem to not get than FTTN is a stepping stone.

    Renai’s prophet, Mr Turnbull, has no plan beyond FTTN. No plan beyond injecting funding to motivate Telstra.

    But, it’s still not the end game. It’s an inefficient way to get there, though. It also obviates responsibility for actually fixing the current situation. Sounds like an LNP policy to me.

    Anyone deploying FTTN is doing so because FTTH isn’t possible under whatever budget is available; not because it’s technically inferior.

    The CAN is taking a slow march east. Telstra has, they’ve moved on already.

    We have over a decade of example from LNP as to their broadband credentials. They are, in short, a bit sh*t.

    Expecting something new now, when clearly Abbott has no interest (Turnbull is not leader, he either has to tow the party line, or get out) is perhaps overselling the options.

  19. I agree with Sathias in part. It’s a stepping stone only in as much as it gets you part way speed wise. But cost wise it’s extremely wasteful and is essentially a technological dead end.

  20. The coalition are big on cost-benefit analyses before acting.

    They are planning to make a major changeof direction in Australian infrastructure policy from that followed since 2007.

    We should therefore expect them to conduct and publish (before the 2013 election) a cost-benefit analyses of revoking or delaying signed NBN contracts and of delivering their alternative (hairy) solution.

    Let’s see, there’s the $16.7 build cost of terrestrial services (cf Citigroup), contract penalties (at least several billion), loss of economic and social benefits of ubiquitous availability of a full range of speeds, especially upstream, and the eventual cost to begin again and build fibre from exchange to premises.

    And all of these costs will be on-budget, from a coalition government which eschews borrowing, and therefore will cut services elsewhere. What a massive blow to Australia.

    Face it, Tony and Malcolm. You lost three regional seats on no-fibre policy in 2010. You will lose at least eight or nine on no-fibre next year. This is quite enough to risk losing your second unloseable election in a row, to a coalition of minority Labor and an increased cross-bench contingent.

    The coalition argues that, although the fibre, wireless, satellite and backhaul being built by NBNCo is the best technical solution, we cannot afford it. But your change of direction would cost much more. Economics and commonsense plainly show that you should simply make the NBN a bipartisan policy. Politically, this would also reduce Labor’s chances of forming a minority government again to zero. Just do it!

    • “The coalition are big on cost-benefit analyses before acting.”

      What’s the bet that their CBA would be better than one done for the current NBN?
      I think it will. They will do one over a shorter period of time, leaving out the inevitable
      point at which FTTH will need to be implemented. Do an honest CBA covering the
      next 50 years, the current plan would win hands down.

  21. The fact that Abbott can accuse Labor of cooking the books, repeatedly and flatly lie about the NBN’s correct place on the budget, and still be considered a viable candidate for public office, is nothing short of a damning of the state of politics and journalism in this country.

    • Indeed Karl, and to take that further, he obviously believes Australians are idiots who do not understand anything and being so, treats us with contempt.

      Obviously, contempt we (the majority according to the polls) deserve.

    • Not to mention the so called “audit” of their election promises last time around that heir accounts got fined over due to the coalition lies. Then on top of that the 11 billion dollar black hole!

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