NBN: Can we trust either side to actually deliver on their promises?


full opinion/analysis by Renai LeMay
13 August 2013
Image: Office of Malcolm Turnbull

Both Labor and the Coalition have evolved their National Broadband Network policies to the point where, on paper at least, they are viable and would deliver Australians substantial broadband service delivery improvements. But can either side be trusted to live up to their promises? History and analysis of the plans suggest that no matter who wins the election, very little will go as planned.

On last night’s edition of the ABC”s late night Lateline program, the Australian electorate got a real treat. Two senior politicians, one each from either major side of politics, sat down with a seasoned journalist, and got into a furious debate about something which really matters — how best to provide faster broadband to all Australians.

Both sides scored valid points during the debate. Communications Minister and Deputy Prime Minister Anthony Albanese was able to successfully push the Federal Government’s point that universal fibre represents the future of Australia’s telecommunications needs and that the Government’s existing NBN project would be able to provide for the nation’s broadband needs for the forseeable future.

For the Opposition’s side, Shadow Communications Minister Malcolm Turnbull also performed admirably, convincingly arguing that the Government was out on a limb with its costly and time-consuming fibre to the premises NBN rollout, and that it do better to follow international best practice being used in countries such as the US, UK, Germany and France and pursue a cheaper fibre to the node rollout style that would get next-generation broadband in the hands of all Australians much quicker.

Playing the part of adjudicator, host Emma Alberici also did an admirable job. In an age where it has become common for journalists to let politicians get away with blue murder, the Lateline host never let her subjects get too far out into pontificating before she reeled them back in. Alberici, who had obviously researched the NBN debate extensively, pinioned each side repetitively on key weaknesses in their arguments, probing for the truth behind the facade of political spin. The journalist was able to press Albanese hard on the Government’s NBN plan, while the Coalition’s financial estimates also came under fire. There were quite a few moments which reminded viewers why great journalism itself is always necessary — even if the institutions which host individual journalists sometimes do so much wrong.

What emerged from the debate between the two sides was something extraordinary in Australia’s political climate: A substantive, detailed, complex policy decision, displaying to perfection the key philosophical differences between Australia’s two major sides of politics. From Labor, as is its wont historically, Australia got a big-spending vision of a landmark infrastructure project which would serve the nation’s needs for many decades. From the Coalition, a more conservative, more market-based vision emerged — but one that had the promise of delivering on its aims more quickly and with less government investment. And all the while, the press kept the bastards honest. Gold.

Even I, as an expert commentator who has covered the National Broadband Network project for its entire life, found it very difficult to know which side ‘won’ the debate. Which option is better — Labor’s NBN vision or the Coalition’s? Both had many valid points, but there were also weaknesses exposed in each. I really have no idea how the electorate will be able to judge between the two policies and the two candidates for the future role of Communications Minister, when both visions are quite persuasive.

There was, however, one little problem with last night’s debate. As I watched it, I couldn’t help but think to myself: “Is this gloriously stimulating, intellectual debate just a whole lot of hot air? Will the parties actually be able to deliver on their promises? Is all of this just a tale, told by an idiot, full of sound and fury, signifying nothing?” The problem, you see, is that when it comes to actually delivering on flagship telecommunications policies, neither the Labor Government, with its current NBN project, or the Coalition Opposition, with its previous initiatives, actually has much form at all. And there is every indication that no matter who wins power in the upcoming Federal Election, neither side will actually be able to meet their promises in terms of their respective NBN rollouts.

Last night, Albanese stuck staunchly by the veracity of NBN Co’s corporate planning process, and its ability to meet its rollout targets.

However, if you go back to NBN Co’s 2010 Corporate Plan, or even the updated plan released last year, any objective observer would be forced to admit that the company’s ability to plan and deliver on its plans is somewhat laughable. In 2010, NBN Co was planning to have rolled out its fibre network to some 868,000 total premises by June 2013, with its wireless network slated to have reached some 269,000 premises. By 2012, the fibre number had come down dramatically to 341,000, and its wireless target integrated with its easier-to-achieve satellite target. In March this year NBN Co revised its fibre targets downwards again, from 341,000 down to between 190,000 and 220,000.

In July this year, the company revealed that it would finally hit a target, revealing that at the end of June it had passed a total of some 207,500 premises with its fibre network. However, even then there wasn’t much room for jubilation, with the company itself acknowledging that one third of the premises its network technically ‘passed’ were not actually able to access broadband services, as the premises concerned could be hard to reach, such as apartments or units in blocks. The company’s wireless figure was even worse — NBN Co had connected just 27,300 premises as at the end of June (remember, its initial target from 2010 was 269,000), and it had just 1,900 actual customers using wireless.

Now, there are many quite legitimate reasons for NBN Co’s slowness in rolling out its network infrastructure. The negotiations with Telstra took much longer than expected, the company’s construction partners have not expected as delivered, asbestos in Telstra’s ducts has halted construction in many areas temporarily and the Government itself has changed the game on the company several times — for example, giving it extra responsibility for greenfields (new housing estates) developments. In addition, NBN Co’s delays, in one sense, can be seen to be within normally expected variants for a massive infrastructure project of this size, which usually suffer slippages and cost over-runs.

However, that still doesn’t mean that the Government shouldn’t be held accountable for those delays. The politicians — especially then-Communications Minister Stephen Conroy and Prime Minister Kevin Rudd — made certain promises, and were unable to deliver on those promises. There is every indication that, should Labor retain power in the Federal Election, further delays in the NBN project are to be expected on virtually every front. New excuses will be found for those delays, including legitimate excuses, but that doesn’t excuse the politicians from being held to account over them.

When it comes to the Coalition, the deficiencies and vast assumptions in its rival NBN policy that will likely bring its implementation effort to its knees are legion.

In its first three years in office, the Coalition has promised to carry out several analyses and audits of NBN Co itself and its activities, as well as re-negotiating NBN Co’s highly complex arrangement with Telstra to migrate the telco’s customers onto NBN Co’s network and gain access to its ducting infrastructure. Its FTTN-based policy will also, in all likelihood, force NBN Co to re-negotiate billions of dollars of existing contracts with construction firms and network equipment vendors, due to the key differences between its rollout style and the fibre to the premises rollout style used in Labor’s existing policy.

And then there’s the rollout itself, which is dependent upon most of the activities mentioned in the preceding paragraph. The key policy commitment which the Coalition is taking to the election is that within its first three years in office, to the end of 2016 — essentially, its first term — it will deliver download speeds of betweeen 25Mbps and 100Mbps to all Australians. The Coalition will also need to deal with the technical difficulties associated with opening up Telstra’s HFC cable network to wholesale access; a process which has not historically been tried on a large scale in similar cable networks globally.

The difficulty with these promises, as many commentators have pointed out, is that the timeframes involved may not be workable in practice.

NBN Co’s existing contract with Telstra alone took several years to negotiate, and a fundamental re-working of that contract would be expected to take at least half a year, or perhaps more. The arrangement, although so-far unpublished, is one of the most complex contracts in Australia’s history, and any modification would require teams of lawyers to pore over every consequence. If the contract was varied significantly, say, to include the legal sell-off of Telstra’s copper network to NBN Co, and a variance in the remuneration involved, this could mean that Telstra would need to approach its shareholders again, as it did in late 2011, for their approval. This would probably involve an additional delay of several months to the Coalition’s plans.

Then too, many of the delays associated with Labor’s NBN implementation will also apply to the Coalition. Issues with Telstra negotiation, asbestos, NBN Co’s contractor workforce and even delays with the rollout of wireless towers due to community objections and local council planning processes will affect the Coalition’s NBN implementation in precisely the same way as they have Labor’s project. The fundamental nature of the challenges associated with building the NBN will not change, no matter which political party is in power in the Federal Government.

Greens Communications spokesperson, Senator Scott Ludlam, has described NBN Co’s recent rollout downgrades signs of “either high-level delusion or basic contract mismanagement”. And independent MP Rob Oakeshott, who describes himself as a strong supporter of the NBN, has said that he doesn’t believe Australians can have faith in the rollout figures being provided by NBN Co any more. And even retail telcos such as iiNet and AAPT are getting fed up with the slow pace of NBN Co’s rollout.

We must also consider the Coalition’s past history when it comes to telecommunications. Perhaps the most substantial accomplishment by this side of politics, in this area, was the 1997 deregulation of the telecommunications sector, which allowed many new players to challenge the dominance of the incumbent, Telstra. However, in the decade between that point and 2007, when Labor took over, the previous Howard Government abjectly failed to take necessary steps such as structurally separating Telstra’s wholesale and retail operations, dealing with blackspots and competition in regional areas.

Its last attempt to deal with this issue — the ill-fated OPEL project, which would have seen a consortium of Optus and Elders roll out ADSL2+ and WiMAX in rural and regional areas — was delayed, achieved little and was ultimately abandoned when Labor took power, and the Coalition didn’t win any hearts and minds back with its botched 2010 NBN policy, which stacked up poorly next to Labor’s more ambitious vision. Turnbull himself has been able to claw back a great deal of respectability for the Coalition in the telecommunications portfolio by embracing many aspects of Labor’s policy and taking a financially conservative approach to the rest, but the Coalition still has a poor track record in the telecommunications field, and I don’t think many industry observers have forgotten that.

In March this year I wrote:

“… the wonderful thing about the NBN dream is that it’s a panacea: A universal remedy to all of Australia’s long-term telecommunications problems, designed to fix, once and for all, problems with dropouts, crappy speeds, poor telephone call quality, a lack of mobile reception, exorbitant prices or even an inability to get fixed-line broadband at all in certain areas.

The NBN is still a wonderful dream; wonderful enough that anyone from overseas who visits Australia tends to praise it as a fantastic undertaking that they wish their own government had undertaken.

But let’s be real about this: For the foreseeable future, the NBN is going to remain just that — a dream. The NBN is not coming to your house or business any time soon, and in the next five or so years Australia can expect the current disgraceful level of political infighting about the project and delays in its rollout to continue. This dreadful situation is not going away any time soon, and neither are the problems with your broadband connection. So get used to the dropouts.

The NBN has always been a fantastic dream. But all dreams must end as we wake to grisly reality. This project has been mismanaged by Labor, and is about to be screwed over wholesale by the Coalition. At this stage, the suggestion by then-Telstra chief executive Sol Trujillo back in 2005 that the Government pay Telstra a few billion to deploy FTTN itself (and lock out competitors along the way) is looking more and more like it would have been a winner, comparatively. We may not have had competition in the telco landscape, and we may not have had fibre to the home. But at least we would have had something.”

It’s a truism that real-world project governance is different from policy-crafting; that a much greater effort must be placed into actually rolling out infrastructure than promising to; that it’s just a much harder task to deploy broadband technology than it is to say that you’re going to. We’ve clearly seen this from the past decade in Australian telecommunications, where very few political promises have actually been delivered. But I’m not sure that fundamental difference is well-understood at the moment. Perhaps we should be having a debate about each sides’ project governance credentials, and to what extent they can keep any kind of NBN Co project on track — rather than about the theoretical speeds and feeds which each sides’ concepts on paper will be able to deliver.

Right now, both sides of Australian politics are great at making election promises about the NBN. But when it comes to actual delivery — actually rolling out better infrastructure around Australia, on time, on-budget and in a way that actual Australians can actually order better broadband — neither side has a great, or even good, track record. Their abject failures are legion, and we can expect more of the same in future. Both sides have great ideas, but great ideas are cheap. What Australia needs right now is a Government that can actually do what it says it will in the area of next-generation broadband — not one which has glorious plans which never make it into the real world.

TL;DR: Politicians are great at promising better broadband to Australians. I’m yet to see much action, and until I do, I won’t place much trust in either side.


  1. From Paul Grahams essay “Revenge of the Nerds” – http://www.paulgraham.com/icad.html

    large organizations, the phrase used to describe this approach is
    “industry best practice.” Its purpose is to shield the pointy-haired
    boss from responsibility: if he chooses something that is “industry best
    practice,” and the company loses, he can’t be blamed. He didn’t
    choose, the industry did.

    I believe this term was originally used
    to describe accounting methods and so on. What it means, roughly, is
    don’t do anything weird. And in accounting that’s probably a good idea.
    The terms “cutting-edge” and “accounting” do not sound good together.
    But when you import this criterion into decisions about technology,
    you start to get the wrong answers.

    Technology often should be
    cutting-edge. In programming languages, as Erann Gat has pointed out,
    what “industry best practice” actually gets you is not the best, but
    merely the average. When a decision causes you to develop software at a
    fraction of the rate of more aggressive competitors, “best practice” is
    a misnomer.

    The essay is about
    programming languages, but I think it applies to anything technology
    related. I really recommend reading his book “Hackers and Painters”,
    it’s rather enlightening.

    • I’ll agree that this applies to some forms of technology — for example, software development. However, I think the NBN is not really about technology, or at least it’s not when you get outside NBN Co’s NOC and datacentres. The NBN is really fundamental infrastructure like roads, railway lines or ports, and like those types of infrastructure, it’s really a construction effort, not a technology development effort. It’s implementing existing technology, not deploying new technology. In this sense, i think project governance is the real issue underlying the NBN rollout — not technology itself. We understand the technology. But I don’t think we understand project management well enough when it comes to the NBN.

      • True enough, but I was countering Turnbull’s point that FttN is Industry Best practice. I hear that a lot in my day job (System Administrator) and the reality is that it squares up with exactly with what Paul Graham says.

        You are quite correct, the technology is irrelevant. Which is why the Coalition would have my vote in a heartbeat, if they were just going to come in and do a better job. The cost and time reduction doing FttN isn’t enough justify using a much lesser technology. (Vectoring/G.Fast are not realities yet, and I think we’ll find in practice they’re going to be difficult/expensive to deploy. Much more than fibre which doesn’t need any fancy hacks to perform)

        Get rid of the special Australia only hardware, put Nodes in MDUs, and look at FttN for communities that are currently out of scope because they are too small.

        • I would certainly like to see the Coalition give a lot more information on how they are going to deliver a FTTN faster. Right now it seems like both sides are going to be facing a much slower rollout than anyone is acknowledging.

          Personally I think, if it’s going to be slow, get fibre all the way to the premise, or at least to the basement in the case of MDUs. We’re going to have to do it eventually — it might as well be now.

          • I would certainly like to see the Coalition give a lot more information on how they are going to deliver a FTTN faster.

            Me too. I’ve been bitten by tradies that have said the same thing when I needed some work done on our rental property, “Yeah mate, I can do that faster and cheaper than the other guy”, and fair enough it was. Unfortunately, the quality of the work was not what we expected, but fit the description of what he offered to do perfectly, so after many angry phone calls (which resulted in him standing firm on the work done), we needed to get the original guy to come in and redo the work to get it up to par…

            Given that FTTP is the “end game” for Australia telecoms needs (as even he has said), I think he needs to let us know how and when his plan covers it. He is just plain wrong when he says it’ll be in 50 years time, it’ll need to be much sooner as looking at the simple numbers of national data usage show.

            Having been stung before, Malcolm is showing all the signs of the smooth talking “dodgy tradie”.

          • The thing that I think sometimes about data usage figures right now is that, even to the extent that we have them, they’re obviously artificially constrained. If we had FTTH, as compared to the current mix and match of ADSL2+, ADSL, HFC and mobile broadband, one wonders just how much data we would be using. In my experience, when it comes to technology, usage expands to fit the potential. If you have more power or faster speeds, you always end up using them. This is, perhaps, one of the main arguments I see for the idea of deploying FTTP.

          • Yeah, I agree 100%. It’s a lot like the “which can first, the chicken or the egg” problem. A good example was Foxtels recent foray into IPTV, where they said they are waiting for better/bigger connection plans so people get better quality streams. A lot of other companies are probably waiting for the same thing to happen, and if the “Well, there’s nothing that can use FTTP speeds currently” crowd wins out, it’s take a lot longer for the investment in this are to start happening here.

      • Whilst I agree with what you write, Turnbull *IS* relying on new and untested technologies such as Vectoring and the yet-to-be ratified G.Fast. When presented with credible arguments against his “alternative” he goes into complete bullshit mode and talks about using these to provide this 25Mbps minimum he’s promised.

        • Hmm not so sure if that’s true. I don’t think Turnbull is going to use vectoring or G.Fast to do the base 25Mbps — I that can be achieved by deploying FTTN alone. I think it’s in the higher speeds that he will relying on some of these technologies.

          • I guess this is the crux of the matter. There’s so many unknown factors that Turnbull simply glosses over or is dismissive about.

  2. From my perspective of many years in Transmission and Transmission systems and networks rather than IT or Data background.
    I have considered the NBN is actually misnamed it is a National Transmission Network. It should have been named the National Communications or Information Network which of course includes “Broadband” whatever the term actually means at the time, this would have shifted the perspective and evaluation of the Debate

    The absolutely key differential has not been discussed and that is not a Data stream Factor, but rather a transmission factor and as such has not truly been appreciated.
    That is that with FTTN the 2.5 Gb SPECTRUM available (which can include a spectrum (wavelength) band dedicated to multicast at a reduced cost) will be decoded into discrete streams per user for Electrical transmission on pairs or encoding back to light for FTTP . Certainly some of that could be multicast, but splitting 25Mb or oven 100Mb for a multi user premises is limiting .

    However with GPON FTTP that whole 2.5Gb (or 10, or 40, or 100) is split to each subscriber and the NTU decodes their service, that 4 port NTU can decode 4 discrete separate services.
    Remember 10Gpon now available 40GPON soon and 100GPON by the time it is built.

    This may appear inconsequential at this time but so many possibilities are made possible apart from just multicast Video including high quality 4K not just low quality compressed versions, such as public service (government services), community services (within the Fan) etc etc.

    That is what it is actually all about an enabler for what is yet impractical or just a dream to become practical profitable realities

    It is the capabilty for future evolution of services that is the differentiating factor

      • Forgetting about the focus on just the National Broadband for a second; there is a saying:’When, as a guy, you’re looking for a girl, you’d better find one with a good personality – make sure she’d nice because they ALL have a vagina’

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