Reality check:
Murdoch doesn’t want to kill the NBN



blog Over the past day or so, quite a few readers have made me aware of this controversial article published by long-time Paul Sheehan at The Age. In it, Sheehan makes the somewhat audacious claim that the constant string of negative articles which we’ve come to expect from News Corporation newspapers such as The Australian and the Daily Telegraph have had the aim of destroying the NBN to shore up the future of News Corp stablemate Foxtel. My response was published on Delimiter 2.0 yesterday. A couple of key paragraphs from within the paywall:

“Yes, yes, yes. You can see the narrative unfolding right before your eyes. It has everything. The dark forces of evil (Murdoch and News Corp) are closing in, trying to kill fast broadband and take schoolboy Kevin’s toys, in an effort to shore up a failing business model which the Internet has made irrelevant. And of course, Fairfax is here to make sure we’re informed of the Evil Empire’s dastardly plans, flush with the success of holding corrupt NSW politicians to account …

The only problem is the gross inaccuracy of the whole thing. In its rush to create a scandal, what everyone involved in commenting on this situation has forgotten is that Murdoch and his clutch of News Corp executives don’t hate the NBN and want to destroy it. In fact, they have many reasons to welcome it, and generally have been doing so.”

Foxtel, too, has issued its own statement praising the development of better broadband in Australia:

“Even without government intervention, these networks would have developed and expanded. If government action improves in the reach and quality of broadband networks, or ensures that they are deployed more quickly, Foxtel will benefit by being able to offer products such as Go and Play to more Australians.”

It’s been fascinating to watch a variety of interested parties — including Prime Minister Kevin Rudd and Communications Minister Anthony Albanese, as well as Malcolm Turnbull. But I suspect at the heart of the matter is a simply fallacy. There’s not a lot of evidence, after all, that Murdoch is actually against the NBN; but there is evidence that the News Corp chief executive and Foxtel executives are actually for the project. Fo

Image: David Shankbone, Creative Commons


  1. So, if Murdoch & News Corp are *for* the NBN, why do their news outlets in Australia consistently print false information in stories attacking the NBN, and almost never print stories reporting favorably on rollout progress?

    • hey bern,

      as I wrote yesterday on Delimiter 2.0, I suspect it has more to do with wanting to damage Labor than wanting to kill the NBN per se. The NBN is a high-profile Labor project which is malfunctioning — it’s an obvious target for criticism. But there is substantial evidence that Murdoch and Foxtel are in favour of the project.


      • Well, it’s not just that it is malfunctioning, they were after it before it even started.
        I agree that Murdoch’s hatred is more aimed at Labor than the NBN. There is however a little difference between the broadband rollout he was pushing for and the one that is happening. Murdoch’s vision of improved broadband for Australia was having Telstra roll it out. If Telstra rolled out faster broadband and Foxtel uses the Telstra network to deliver services, advantage maintained. I know the ACCC is trying to give access to Telstra’s network at equivalent prices to all, but I do feel that the prices charged for high data volumes, even if charged internally to themselves in Telstra… Well, effectively if the cable is there, and they own it, there is no difference in cost between using it to transmit 1G or 10TB of data. For the other RSP, there is.

      • My problem with that logic is that the falsehoods and beat ups relating to the NBN have been consistent for years, well before any of the current issues surfaced.

        I do believe that they are out to destroy the NBN, however this is more about damaging Labour than the NBN itself. At the end of the day, FTTN will still enable many of the same threats, challenges and opportunities as FTTH, with regard to Newscorp and foxtel. I will still be able to stream any of the content I want over FTTN, I cant imagine the difference between the two policies meaning that much to Murdoch.

        • I’m with Renai on this one – the damage has intended to be to Labor, not NBN. NBN has been the big ticket item for a number of years, so a simple target for them to aim for. As its on such a scale we’ve never seen before in Australia, it was inevitable that something would go wrong, and hence be ammunition.

          If they were against the NBN, they’d be attacking the FttN plan of the Liberals with as much gusto – if Labor’s vision was so poor, why is the Liberal plan any more acceptable? The questions of affordability and rollout delays apply to both plans, so if its the idea they disagree with, its easy to get ammunition against both.

          As they havent, its clear its Labor they are against, not NBN per se.

  2. It may not be the only reason but it is definitely a factor and his tweet is not exactly evidence of his support for an NBN just evidence that he would say that.

    Here is the difference between now and 2007
    In 2007 Netflix was but a dvd mail service and beginning to offer streaming over the internet.
    In 2013 Netflix is starting to challenge Cable TV in the USA and biting into their profits.

    If this is not a concern for Foxtel then they are very stupid but they are not stupid at all.

    They do not want the NBN because right now they have the only method of broadcasting multiple HD channels and since most people are signed up to satellite Foxtel all they need to do to have 4K is 1 new satellite and then they are back in front while the Coalition Broadband may allow for a single 4K stream if no one else is using the connection the NBN will allow multiples and using the second port on the NTD + multicast will mean they do not interfere with normal internet access.

    While this is portrayed as a positive for Foxtel they have access to 100% of homes right now with satellite so how is it an advantage we have 100% now and with the NBN we have 100% but so do any competitors. The biggest threat to Foxtel is a level playing field Foxtel need to have an offering that is better than the competition and they can only keep this advantage with an inferior Broadband network where their Satellite network gives them the Bandwidth advantage and they can offer 4K while smaller competitors can not.

    • Actually no, they don’t have access to 100% of Australia.. they have access to anyone who owns their home, not all rental property landlords will allow foxtel to be installed. The NBN will have 100% coverage eventually though.

  3. If Murdoch and Foxtel are so in favour of the project, then they should be encouraging their Liberal favourites to adopt the policy as bipartisan.

  4. So Renai, have you stopped adding “Opinion” to anything now in favour of your D2 site?

    • Er.. this says “blog” so its a direct opinion piece isn’t it. He wouldn’t put his own opinion on his own opinion… Would he?????

      Maybe he did, but his editor came to his senses… That’s a good editor you have there Renai ;-)

  5. A company is required to act in the best interests of its shareholders. News Ltd, Foxtel, Telstra are currently doing what is in their best interests. The current NBN design appears to offer a way for the key value part of Foxtel (AFL, NRL) to go it alone. Of course these companies are going to do what they can to ensure they retain value. At this time, the best way for them to achieve that is in campaigning for the whole NBN to be looked at and then they can secure more favourable outcomes for themselves in that process.

    As a consumer however, I would say that my best interests are served by not letting Rupert or Telstra near anything that can influence my life.

  6. You expect me to believe after 4 years of endless tirades against the NBN in his newspapers from it’s commencement that he is “opposing the NBN” in our national interest.
    It’s quite clear that without his monopoly on the distribution system his business model is broken, what kinda moron want’s to buy a hundred channels of home shopping and endless repeats and sports they aren’t interested in watching just to get Game Of Thrones.
    The way of the future is program on demand with no ads minus all the stuff nobody want to watch. No ads no Murdochracy business model.
    To say the NBN is no threat to Murdoch is clearly baloney.
    If Murdoch truly thought the NBN was a great idea why then isn’t he supporting it, there are after all many other ways to attack the labor government considering the public largely supports this project?
    Is there any great certainty that Mal’s NBN is going to proceed? Tony has repeatedly stated over the years that wireless is the big thing and that any NBN is a white elephant!

    Tony today is now stating after being questioned about revenue to balance his spending proposals is promising a Tax and spending revue after the election.

    What happens when after the election Tony decides due to the “huge hidden expenditures of the Labor Government and their creation of a deteriorating economy and a massive deficit” the Liberal Government has now decided that any expenditure into any NBN is “unaffordable” and is a white elephant anyway because wireless is the future, the NBN assets will be “given to Telstra and no more of the $11Bd will be paid out. All telecommunications infrastructure would now be privately funded and built with the government having no role at all.

    Are we all going to jump around at furious demonstrations with Alan Jones and the Rooty Hill RSL mob and scream Tonyliar.

  7. I don’t agree that Murdoch supports the NBN in any shape. Whatever extra opportunities it might present to his business come at the expense of having to compete.
    His model has been one of a monopoly gouging customers who don’t have any alternatives. Rupert Murdoch is personally pugnacious and likes his opponents to be nice and crushed.
    He has achieved that in Australia and doesn’t want that changed.

    Yes, there are similar problems for him, although to a much lesser extent, through the FTTN alternative. I don’t think he is particularly happy about that either.

    So yes he is attacking the NBN as a way to get at Labor. However he also hates the NBN in it’s own right. The two are not mutually exclusive. If he says anything to indicate that he is not anti-NBN then take it with a huge pinch of salt; he is hardly the most ethical being to ever walk this planet and I assume that he will lie through his teeth quite happily.

  8. I think you’re both right and wrong, Renai.

    I think that yes, Murdoch hates Labor. Yes, Murdoch hates the NBN primarily because it’s a (popular) Labor policy. However Murdoch will benefit (or at least cut his losses) from destroying the NBN. Destroying the NBN is basically just the icing on the cake (regime change) for him.

    Of course, in attacking Labor and its works, including the NBN, he continues to destroy the credibility of the publications he owns with all but the most empty-headed readers and overzealous liberal voters, so maybe he’s becoming even more short-sighted in his old age.

    Moving on to a broader topic, I think that this apologetic stance that some people have is dangerous. Just because the grip of old media is slowly loosening doesn’t mean they can’t do damage now that will have consequences both now and in the future.

  9. I have to disagree with you that they don’t want to kill the NBN. Foxtel’s IPTV products are mere ‘me tooism’ of poor quality compared to the subscription pay tv versions.

    The NBN is a massive threat to News Corp for one major reason:

    It gives the 5 major sports in Australia (Cricket, Football, AFL, NRL, Union) the ability to band together and effectively replace both foxtel and the free to air networks, and directly sell their product (both to consumers in paid/premium formats and to advertisers) and completely take out the middleman.

    Without Sport, Foxtel would be dead. It simply cannot sustain itself without the subscriptions that sport provides. FTA would also have a huge whole to fill that it might not be able to do.

    The FTTN fraudband isn’t ubiquitous, reliable or in some cases, fast enough for these sports administrations to risk changing the status quo.

    With the NBN, these sports could create their own foxtel, using a much simpler distribution method, with far less overhead.

  10. I’m sick of this assertion that Rupert is a purely capitalist animal with only one real ideology: to make money. It’s an appealing argument, because smart people want to believe that anti-social behaviour (at any scale) is motivated by something banal like profit making.

    Rupert is a billion years old and has billions of dollars. The idea that he’s still trying to turn a buck at every opportunity is nonsense: he wants the world to be a certain way. And that way is that everything is for sale, regardless of how fundamental it is to the way a society functions. He’s not alone; every psychopath who has read ‘Atlas Shrugged’ sounds just like him.

    Rupert and his proxies attacks the NBN because it’s a government infrastructure project. Period.

    • Was about to write a new comment saying basically this.

      Rupert like me and everyone else has a set of beliefs in the way that things should be run. In his view (not mine) a GBE providing infrastructure in an industry that he believes should have limited government intervention is against his set of beliefs.

      He isn’t doing it for the governments bottom line (he doesn’t care about the 40 billion dollars) he only cares that the government is interfering in the market. The LNP project is a stupid waste of money for a government (I am sure he believes), but at least they aren’t stopping the market from competing with it.

      • I think he’s ok with the LNP plan because, as we all know, it won’t remove the private monopoly Telstra has. It will just make it shorter. RM is fine with a monopoly as long as its run by a company, with shareholders, who don’t rely on violence (ie. The State) to enforce that monopoly.

        That’s the sunny, humane side to the sort of objectivist philosophy engaged in by people like Rupert Murdoch- true enough, a mostly private enterprise like Telstra cannot fall back on a police force to ensure their ownership of critical infrastructure. Of course, this sort of thing has its place in a country with a nakedly corrupt, dysfunctional government – snark aside, Australia doesn’t have that. The government is stable, business-like and well resourced; it’s demonstrated competence in several industries for which it sets the agenda (or at least, no more incompetence and waste than your average large corporation).

        The best example I can think of is the roads system. Anyone is free to correct me if I’m wrong here, but I’m pretty sure local, state and to some degree federal government sets the agenda to maintain roads and highways in a good condition to facilitate the transport of goods and people. They’re boring, straightforward and can only really be in one of two states: good or bad. They’re by and large good.

        The telecoms infrastructure has no better analogy than the roads system. It can’t be run purely with profit in mind – it’s the backbone of communications, and Australia is a country with about 90% of people working in services. Locking in the last mile (or last 100 metres, whatever) with a company with only shareholder returns in mind won’t, and hasn’t, worked.

        So Rupert Murdoch can stand on a mountain and claim he’s fighting for the free market or liberty or freedom or whatever. There’s 12 million households in Australia that need a comprehensive, sole owner NBN to help facilitate the next stage of Australian economic development. Forget the massive cost blowouts the LNP plan will eventually come to generate- it’s the frustration of non tech savvy Australians wondering why the internet is so much worse in their new place to their old place. Or having retailers throw up their hands to say ‘we’re waiting on Telstra’. Its hundreds of thousands of maddening complaints to the TIO, ACCC and resolution departments over massive, opaque bills.

        Blah. ranted myself into a corner. Tired now.

  11. Reality Check indeed. He may not want to kill but it’s definitely a threat.

    Straight from the Company mouth …. News Corp’s Annual Report 2013

    “In addition, enhanced Internet capabilities and other new media may reduce the demand for newspapers and television viewership, which could negatively affect the Company’s revenues. The trend toward digital media may drive down the price consumers are willing to spend on the Company’s products disproportionately to the costs associated with generating content. The Company’s failure to protect and exploit the value of its content, while responding to and developing new products and business models to take advantage of advancements in technology and the latest consumer preferences, could have a significant adverse effect on its businesses, asset values and results of operations.” Page 18

    Also and more pertinently ….
    “The Inability to Renew Sports Programming Rights Could Cause the Revenue of Certain of the Company’s Australian Operating Businesses to Decline Significantly in any Given Period.
    In addition, professional sports leagues or teams may create their own networks or the renewal costs could substantially exceed the original contract cost. The loss of rights could impact the extent of the sports coverage offered by the Company and could adversely affect its revenues.” Page 19

    News Corp clearly see risk (threat) in enhanced internet capabilities. And what better way to reduce risk than slow down the development and growth of that risk.

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