opinion/analysis The level of hysteria over the past 24 hours over Malcolm Turnbull’s entirely predictable decision to refresh NBN Co’s board has been laughably absurd, and starkly demonstrates the lack of understanding the media has about the National Broadband Network in general. Take a chill pill, people: The Coalition is not “trashing” the NBN or “setting it up to fail”. The sky is not falling.
Since every article that I publish that’s even mildly favourable about the Coalition or its freshly minted Communications Minister tends to see me labelled as a Turnbull shill taking regular fat sacks of cash from the Coalition’s coffers, let me firstly, at the outset of this article, reiterate (once again) my long-term, sustained support for a universal fibre National Broadband Network. As I wrote in April this year, regarding the Coalition’s half-baked, half-copper, half-assed alternative:
“Fundamentally, it’s a worse policy than Labor’s. Its critics are right; it betrays a tragic loss of long-term vision for Australia’s telecommunications infrastructure. Fibre to the node is a dead-end technology which will, in several decades, be already fading into memory. By investing in fibre to the node, the Coalition isn’t skating to where the puck is going to be, nor even where it is now. It is looking backwards, not forwards, and by doing so it is throwing away the opportunity for Australia’s economy to transition from digging things up out of the ground to a more sustainable knowledge-based export economy — you know, the kind of economy which countries such as Germany and Japan already have.”
There are so many arguments against what the Coalition wants to do with the NBN that it’s not even funny. There are the financial arguments. There are the productivity arguments. There are the industry reform arguments. There are the Telstra arguments. There are the social utility arguments. And, of course, as the Financial Review so accurately reminded us this morning (who would have thought it, the AFR criticising the Coalition over NBN policy?), underlying all of these are the technical arguments. Although the Coalition’s preferred FTTN technology has worked well overseas, nobody’s really sure just yet how well it will work in Australia. I guess we’ll find out.
That little disclaimer out of the way, let’s get to the actual business at hand.
Anyone with any interest in the NBN project or NBN Co itself would have felt their eyes inevitably drawn, yesterday morning, to the riveting revelations locked in the pages of the Sydney Morning Herald that the entirety of NBN Co’s board had tendered their resignations.
Now, the SMH’s article was pretty plain fare. Although it was excitedly labelled “EXCLUSIVE”, and its authors, seasoned journalists Adele Ferguson and Eric Johnston, took a somewhat breathless and metaphor-prone approach to their breaking news (painting NBN Co’s board as ‘falling on their sword’ and likely replacement chairman Ziggy Switkowski as ‘waiting in the wings’ to stop the ‘massive cost blow-outs’), at a gross level it gave us the news: NBN Co’s board was out.
What happened next, however, was extraordinary, as commentator after commentator, politician after politician, weighed in to give their own views on the supposed managerial bloodbath.
Perhaps the most hysterical article was penned by Crikey writer Stilgherrian, who made the extraordinary claim that NBN Co’s board was quitting because the new Coalition Government was setting NBN Co up to fail, “either as a byproduct (intended or not) of introducing wholesale competition, or to provide a clean and obvious historical example that “proves” Labor can’t manage infrastructure projects, or both”. In Stilgherrian’s view, the Coalition’s version of the NBN is doomed no matter what (either through incompetence or artifice), and so NBN Co’s board members are the equivalent of rats jumping off a sinking ship.
Normally level-headed Business Spectator commentator Alan Kohler backed Stilgherrian’s claim to the hilt, writing that not only did it make sense for NBN Co’s board to desert the NBN cause, but that even supposed incoming NBN Co executive chairman Ziggy Switkowski shouldn’t go near what he described as the Coalition’s “donkey, a money sinkhole, a political noose, and an end-of-career nightmare”.
If you dipped your head into the blogosphere on the topic overnight, you’d find many of the same sentiments being expressed, only in more impolite terms.
Long-term NBN critic Kieran Cummings, for example, accused Turnbull of taking “revenge” on NBN Co’s board, claimed the new Communications Minister was setting up NBN Co to fail so it could be sold to Telstra “for below cost price”, and even went to far as to allege that the departure of NBN Co’s board could create a “failure cascade” inside NBN Co that would lead to a critical mass of departures from the company. “Game over,” Cummings added.
And all of this was before the politicians got involved.
‘Acting’ Shadow Communications Minister Anthony Albanese — stripped of his staff, his power to command NBN Co and perhaps even his ceremonial gown — nevertheless proved he had lost none of the anti-Turnbull vitriol he had worked himself up to during the election campaign, accusing the Viscount of Vaucluse of kicking off the process of dismantling Labor’s pride and joy. “And so the trashing of the National Broadband Network has begun”, Albanese ponderously pronounced.
Would-be Opposition Leader Bill Shorten went further, alleging the Coalition would use the various upcoming reviews of the NBN project to “go after the NBN”, in a turn of phrase which raised uncomfortable images of Turnbull chasing outgoing NBN Co CEO Mike Quigley around a village green with a hockey stick, trying to clip him around the ankles. Presumably Shorten meant that Turnbull would use the upcoming reviews as justification for turning off the lights for good.
Now, I won’t say that all of this wasn’t entertaining to read. Labor might be trying to reform its image in the wake of its election failure, but it’s nice to know that Australia’s oldest political party hasn’t lost its capacity for bile. Judging by the performance of Tony Abbott and his understudies, Labor will need all the bile it can get to maintain the verbal standard the previous Opposition has set for it. Then too, I do personally enjoy conspiracy theories. I’ve spent a great deal of time online reading articles which purport to contain evidence that the US Government destroyed its own twin towers on 9/11 and that Bin Laden was merely a fall guy. The claims that the Coalition is deliberately setting out to destroy the NBN so it can use it as a case study of Labor’s failure are just as entertaining.
The only problem with all of this, hilarity aside, is that it’s making a mountain out of a molehill. It was entirely possible to predict way ahead of time that Turnbull would turf NBN Co’s board as one of his first actions as Communications Minister, given the past history of antagonism the Duke of Double Bay has had with the board.
In fact, I did predict it. In an article published last month for Delimiter 2.0 on Turnbull’s first 100 days as Minister (paywalled), I wrote:
“The first thing which Turnbull will need to do upon taking power as Federal Communications Minister is obvious: He needs to find new management for the National Broadband Network Company.
Irrespective of where the blame lies for the situation, the poisoned and potentially litigous relationship which has developed between the Earl of Wentworth and NBN Co’s current board will make it impossible for Turnbull to work effectively with it in future as Minister. There is just too much suspicion and distrust, too much blood in the water, for NBN Co’s current board to co-exist with its new primary shareholder minister. Upon taking office, Turnbull must immediately ask for the resignation of NBN Co chair Siobhan McKenna, as other 2009-era board members such as Diane Smith-Gander and Terry Francis. Other board members, particularly former Leighton executive Rick Turchini, may be asked to remain, to ensure stability during the transition.
If I were Turnbull, I wouldn’t bother with the kind of ‘executive search process’ which Labor has previously undertaken to find new board members. Those kind of things normally take six months, and Turnbull has enough connections of his own. If I were the MP, I would already have a shortlist of executives primarily drawn from telecommunications and construction industry background, to fill the vacant chairs. A former senior executive from Telstra or Optus would do well as chair.”
By all reports, this is precisely what Turnbull did. The day after he was appointed Minister, he asked for the resignation of NBN Co’s entire board. It looks like one or two board members will remain, but in the meantime a hand-picked executive (Ziggy Switkowski) will help guide NBN Co through a transition period, while new board members and a new executive team are found. Ziggy’s a terrible candidate for chair, by the way (paywalled), but that’s largely beside the point.
All of this, as seasoned business commentators like Kohler will know, is entirely normal. When a company of any kind changes owners, there are always board changes. It’s also normal for new Governments to turf any bureaucrats, diplomats, and, in the case of NBN Co, technocrats, which they feel are too partisan to the previous administration.
It doesn’t mean the end of the world. It doesn’t mean the destruction of the NBN. It doesn’t mean Turnbull’s the ultimate evil.
Instead, and despite how counter-intuitive this will sound to those still howling for Tony Abbott’s cadre of wreckers to be marched back into the sea, Turnbull is being entirely predictable and even sensible, by modern and corporate standards, in his move with NBN Co’s board.
Other aspects of Turnbull’s plan to reform NBN Co along a FTTN model are also proceeding apace. Telstra has confirmed suspicions of being *shock* willing to work with a Coalition Government on a FTTN model for the NBN by preemptively deploying a FTTN trial in a secret location to demonstrate an early real-world test of the technology. Negotiations between Telstra and NBN Co over key changes to their $11 billion contract are also moving towards fruition, with both sides having reportedly appointed advisors to assist with the process.
And even the idea that Telstra might construct large portions of the NBN — an idea which was so radical before the election (paywalled) — has moved into the mainstream conversation about the NBN.
They say that the media hates a vacuum: That in the absence of any real, hard news of substantive change, that journalists and editors will start speculating, inventing, drumming up, dreaming up, extrapolating the little tidbits of information that they do have into inflated stories that don’t do the actual situation on the ground justice. The media has to have something to talk about, so when it doesn’t, it blows up small stories into big ones: Precisely what is happening with Turnbull’s changes to the NBN. And, of course, there will also be articles by journalists attempting to relieve the boredom by puncturing that hype. You’re reading an example of the genre right now.
As I wrote at the outset of this article, I vastly prefer Labor’s version of the NBN, and most Australians feel the same way. On every front, it’s a better policy, and it’s the one I backed and would have liked to see enacted. I still think it will be enacted, in the long-term. Fibre to every premise in Australia is kind of inevitable at this point, on a time scale of several decades.
But let’s not demonise Australia’s new Communications Minister for doing precisely what he said he would do, upon taking office. In his first few days, Malcolm Turnbull has been eminently predictable and, dare I say, it, sensible. Refreshing NBN Co’s board, kicking off talks with Telstra, blessing fibre to the node trials, and so on: These are all things we knew would happen. The fact that they are happening is, viewed in a certain light, reassuring. At least the Earl of Wentworth isn’t going off into left field right from the get-go.
You may disagree with Turnbull’s FTTN-based NBN policy. God knows I do — it’s a godawful, mess of a bastard child of Labor’s pure NBN vision, mixed with poisoned politics. But one other thing we may say for certain. There would only be one thing worse than the Coalition competently delivering a FTTN-based NBN policy instead of Labor’s FTTP-based model. That would be an incompetent Coalition not delivering anything at all.
“That would be an incompetent Coalition not delivering anything at all.”
Unfortunately, this is highly likely. Turnbull still has to use the same contractors as Labor. There are no new magical people to do it for him. If he screws them round it will take ages to sort out the mess and get it started again.
Kohlers article made a lot of sense – NBN Co with FTTP was shutting down competition to ensure it’s own competitiveness in the market.
With competition back in the picture it’s no longer financially viable without charging significantly more in regional areas. There’s a reason cable is where it is in the cities and it’s all about dollars.
Except Kohler’s article contained zero financial details to back up his claims …
@Renai
Steve Jenkins has done several analyses, as has David Braue over at ZDNet. And myself. That’s just to start. None of us are experts. But even our basic assumptions show it cannot be viable. Not in the iteration Turnbull wants- ie. any competition in any area. Even losing 5% of the market to TPG is a huge revenue loss to NBNCo. in one of the most profitable sections.
Its along the lines of “90% of the money is controlled by 10% of the people”. In this case its “you can serve 90% of the people with 10% of the cost”.
Those are random numbers, the point being that its not hard to show that cherry picking leaves too little fruit on the tree for the rest.
And that analysis has been done plenty of times without much disagreement.
Of course the ‘cherry picking’ argument has to totally ignore Coalition policy referring to Infrastructure competition, otherwise there is no argument , especially the bit about having to provide wholesale access to all access seekers at ACCC controlled pricing.
What is interesting is the repetitive head-in-the-sand attitude on this, it’s as if you keep ignoring it even though reminded of it, (it helps to totally ignore being reminded of it as well), it will actually go away.
Why do you assume I havent read to Coalition policy? Cherry picking isues dont disappear with the Liberal policy, all they do is require the ISP’s to share the technology at a wholesale level. You dont think those rolling out better technology arent going to take advantage of it?
Sydney Park Village has residents tied to 1 ISP if they want the HSB connection. HFC lines are exclusive to whoever paid for them, be it Optus or Telstra. Whoever overbuilds FttN will have exclusive access to that technology, or they wont be building it. Thats simple business sense. Why spend millions to make thousands?
You dont think TPG would be planning on cornering 5% of the market with MDU’s if they didnt gain exclusive rights within those MDU’s, do you?
These are issues with the open competition model of the Liberal plan. It encourages a LACK of competition, not an INCREASE. ISP’s wont build infrastructure unless THEY are the ones getting the benefit. Why would Telstra go through that voluntarily when they did everything they could to stop it with the copper lines?
Of course the ‘cherry picking’ argument has to totally ignore Coalition policy referring to Infrastructure competition
You think it’s gospel and means there can be no cherry picking what so ever?
2016 will come and go, and Turnbull’s idiotic promise of everyone having at least 25Mbps by the end of 2016 will just not happen.
It’s better if he does do nothing. Sit in your office, pontificate all you like Turnbull and in 3 years piss off when Australians realise what a dud Abbott is along with the rest of the Coalition.
It’s better to mothball FTTH and let a future Labor government resume it where it left off, having learned lessons from the first crack at FTTH rather than having to undo the mess that the Turnbull Bullshit Network will create.
There I was thinking the Coalition have to unravel the NBN mess Labor has left them, and why many voted them in to do that.
Sure, we all saw it coming. Turnbull’s blunt commentary pre-election, the ongoing personal attacks.
What people are finding funny (or perhaps not so) isn’t actually the NBNco board mass exit. It’s what’s happening in context of that.
Your last two sentences sum up where we are headed if the current situation continues, and Turnbull removes cherry-picking legislation. There will be nothing left of value to build.
Well said, although this news vacuum seems to be fairly localised.
Last time I checked, Syria had just implicitly confirmed they gassed their own people, Russia was about to walk away from vetoing a security council resolution, and “we” are all focused on who will lead the 3rd smallest Labor shadow cabinet, and whether or not anyone will have to place a pair of red undies on their head now Malcolm is running the show. (Ok that last one was to vaguely bring it back on topic, with a laugh)
“and whether or not anyone will have to place a pair of red undies on their head now Malcolm is running the show. ”
That would be Ziggy Switkowski.
The Coalition will remove or waive impediments to infrastructure competition and private companies will cherry pick the profitable installation sites. What will be left is Switkowski with his red undies and an unprofitable NBN in both the cities and rural Australia.
Well said, although this news vacuum seems to be fairly localised.
Hope or fear, either way, the Libs are setting themselves up for a fall…
My concern in all of this Renai is Turnbull’s refusal to say anything. At all.
Sure, I’m not expecting the Coalition will act like Labor- they pandered to the 24 hour news cycle. But this is a project many millions of Australians are interested in. And Turnbull has said precisely nothing for almost a week now. About anything. Including the Corporate Plan he so vehemently noted would be released immediately upon entering NBNCo’s doors for “full transparency.”
It is not only the media vacuum that is causing this. It is Turnbull’s refusal to do exactly what he said before the election- open NBNCo’s doors for transparency.
He’s holding a press conference this afternoon, it’ll be on ABC News 24.
Cheers.
I’ll hold any further judgement on transparency till after that.
From what I read, Alan Kohler’s most compelling reason for the NBN becoming a money sinkhole is that the removal of the NBN monopoly, allowing private enterprise to cherry pick the profitable neighbourhoods, will lead to an unprofitable NBN.
Arguments around dismantling the board, FTTN vs. FTTH seem to pale in comparison to the incompatibility between the NBN business model (a wholesale monopoly) and the Coalition’s fundamental beliefs (competition in any market is a good thing).
Competition an a market may be a good thing. The trouble is no one wants to compete in the low return areas.
Because it’s not competitive or fiscally viable to do so.
When I lived in Malaysia in the 90’s that Government spun off their monopoly water supplier for the capital into two separate private companies. One of those was the private monopoly supplier of water, the other the private monopoly responsible for waste water. Guess which one was raking in the cash and which was on a collision course with bankruptcy?
The crazy thing is, FTTN with infrastructure competition will have precisely the same outcome nearly 20 years later and in a country that is ‘meant’ to be free of the sort of corruption that infused (infuses?) the Malaysian government.
I have heard the following a large number of times this week across most portfolios and a variety of media outlets: “We asked the minister for an interview on the matter but he declined”
It’s not just Turnbull, it’s a whole of Govt policy
@StephenH
It’s very clear the new government won’t pander to the news cycle. It’ll take a number of weeks/months before it settles down.
However, in light of all their talk of “transparent, open government” before the election….they can hardly cry foul now that the media wants information they said they’d give…
You mean like information on boat arrivals? Oh wait they can’t it’s a military operation now and is now subject as “Classified Information”..
Yes I went there =P
You mean like the ‘transparency’ of the final Labor NBN Co Business plan, we know now why Albanese sat on it.
No, Fibroid, like Pyne proposing the removing the same cap on University places, which he had said he would not remove in July this year.
You mean like the ‘transparency’ of the final Labor NBN Co Business plan
I’m pretty sure he means transparency like the Liberals said they would do. Or are you arguing for them to drop all transparency now because “others” aren’t transparent?
Not too bad, we seem to agree more after the election than before :P Especially RE the board – they shot themselves in the foot with that lobbying. However:
” There would only be one thing worse than the Coalition competently delivering a FTTN-based NBN policy instead of Labor’s FTTP-based model. That would be an incompetent Coalition not delivering anything at all.”
I’d disagree on. I’m not entirely sure a FTTN model would be better than nothing – after all it’s a huge expense of money on a system that IMO is drastically incapable of delivering the speeds we need in even the short term. It would, however, be the perfect excuse to post-phone and drag out a FTTH rollout for years, possibly even a decade or two, by suffering the ‘good enough’ speeds.
Walking through Sydney’s Central station country terminal today, I stopped to read a plaque above a bust of a man’s head. The similarities between the development of NSW rail and the current NBN infrastructure struck me so I’ll paraphrase, lest we forget. Please bear with me:
‘John Whitton,…,is acknowledged as the “Father of the New South Wales Railways.”
His foresight and uncompromising will overcame opponents who propoed narrow gauge horse-drawn trains on wooden rails. Whitton.. insisted on.. standard gauge.. steam trains on steel rails. This set a high standard of construction which formed the basis of our present railways.
Whitton .. was often subjected to great pressure in turbulent political times, but his honour, integrity and competence were fully confirmed by the Bridges Inquiry of 1884-86’
Now there’s some worthy integrity deserving of a name on a plaque. Not faster or cheaper, but the best solution that we still benefit from over a hundred years later. I hope Turnbull has truly searched the country high and low to find a new board that would satisfy his standards and deliver an accordingly worthy broadband outcome for Australia.
Well this was the most pointless NBN article I’ve ever read. Surprised it’s on Delimiter.
Your specific criticism being …?
Sorry but I dont find commentary on others commentary particularly interesting. Can you imagine watching a DVD like this? Lack of focus on the politicians involved kills it for me.
A” DVD like this” would be a documentary, wouldnt it?
A documentary with a commentary of someones commentary of the documentary? Yes :-)
Ah, the extras… Some people watch those, you know. Surprised me as well.
Seriously, I dont think its as bad as you feel HC. Its just an interesting reflection on how the blogosphere has imploded after the news, and not necessarily with justification. Give Renai credit that he’s willing to step on so many compatriots toes in calling them out on it.
Whether you get entertainment or education out of it is a different story, but there’s merit in noting the instant hysteria the story created. When I heard about it on my local radio yesterday morning, I was expecting it to be on here before news.com.au, given the relative size of the story.
Renai seemed to be the only one that held off a few hours before reporting the story. I think there’s some credit in that for the Laberal shill that he is. Libor shill? Not sure either looks right…
The Peer of Point Piper has selected “Duke Nukem” Switowski as his man, in his previous Telco incarnation blew nearly a billion on worthless Dotcom start-ups and collapsed T2 prices, hasn’t been allowed near a Telco since. He was quickly replaced by true professional that had actually ran a Telco, Sol Trujillo.
Duke’s got nothing in his head other than wild fantasises about nuclear reactors appearing like mushrooms all over Australia.
The overseas operators that have “successfully” deployed FTTN made these decisions nearly 10 years ago, about the same time as Sol proposed FTTN to the coalition. During the “Howard” government, that the then communications minister Alston thought FTTN was a hugely expensive uber techie project to assist porn downloaders and gamers, so came up with OPEL which was just a name (MIRAGE wold have been better) that delivered nothing.
Would these overseas Telco’s facing the decision today do the same thing, the answers NO. New Zealand, Spain and France have moved to FTTH, Turnbull has sunk his private investment into the companies building FTTH. Is he going to be investing in NBN Co now Duke Nukem is running it.
@Kevin Cobley
‘The overseas operators that have “successfully” deployed FTTN made these decisions nearly 10 years ago, about the same time as Sol proposed FTTN to the coalition.’
Overseas operators made FTTP decisions nearly 10 years ago also, mixed infrastructure rollouts are common the world over, FTTN is still being used in rollouts in 2013 and will still being rolled in 2014 and beyond.
But apparently Australia is unique in the world where only FTTP is plausible.
‘Would these overseas Telco’s facing the decision today do the same thing, the answers NO.’
Yes they would because they are rolling out FTTN in 2013, if they didn’t think FTTN was viable they would not be still rolling it out, and research would not be going on to take it beyond VDSL1 and VDSL2.
‘ Turnbull has sunk his private investment into the companies building FTTH. Is he going to be investing in NBN Co now Duke Nukem is running it’
Those companies are rolling out FTTN as well, so a Coalition NBN Co rolling out mixed infrastructure follows that precedent well, and no he won’t be investing in the NBN Co no matter who is running it because it is a wholly owned Government department.
I have to agree with seven_tech Renai, you can’t promise to provide full transparency and not even comment on the maelstrom that went down yesterday. He is treating us with disdain & contempt & most likely laughing at the media gorging on itself yesterday. Is he helping the msm with content now?
P.S Viscount & Earl makes my blood boil ;)
He’s holding a press conference this afternoon … should be 2pm, on ABC News 24.
Yeah I saw that but why not say something first thing yesterday morning? Let everyone get it wrong and spread misinformation till this morning,,,Oh and I see your office is in my hood ;)
Well in fairness when Albo said Turnbull is trashing the NBN he might have meant ‘by implementing FttN’ not ‘by firing the board’, in which case it’s hard not to agree.
So what if you predicted what Turnbull would do, so what if Telstra is agreeing to work with the new govt, and so what if Turnbull’s moves with the NBN Co board are “predictable and even sensible, by modern and corporate standards”.
There is one thing I still believe from all the talk that you say is “making a mountain out of a molehill”: the NBN is being set up to fail, to become an unprofitable, rural infrastructure provider. That seems quite clear to me. That’s the thing. Allowing competition is the important change here, and that will ruin Australia’s chances at equitable, consistent, fairly priced, reliable fibre-based Internet access. Instead of government-owned infrastructure and providers competing on services on an even playing-field, providers will own the infrastructure, and it will be a mess. Telstra will still screw everyone.
So please, don’t go making this _smaller_ than what it is.
“the NBN is being set up to fail”
Evidence for this claim?
@Renai
While I don’t agree with the….vehemence of the claim, the fact is, dozens of commentators over the 6 months since the Coalition released their alternative policy have shown an open-competition, FTTN based NBN does not have a business case. Steve Jenkins was told to “Fuck off” when asked about the underlying assumptions of the Coalition business case- wholesale prices and demand.
The NBN may not be being intentionally setup to fail- I think that’s going a step too far. But there is a mountain of evidence to suggest that, on current trajectory, it is likely at some point it will regardless. It’s perfectly possible that trajectory could change. But then why hasn’t Turnbull indicated that? And no, I don’t take “because I was in Opposition and didn’t have the data” as a relevant excuse. 90% of NBNCo’s datat was publicly available. And their assumptions.
If internet bloggers can do demand basis and revenue projections with facts publicly available, why can’t the former banker and lawyer and shadow communications minister??
Depends on the criteria used to define “fail”. If, for some reason, perhaps due to various factors such as chosen technology, infrastructure competition and lack of anti-cherrypicking rules, it can’t supply most Australians with an appreciatively faster connection then it may not be considered “national”. Or even “broadband” beyond current ADSL speeds if the copper isn’t up to it.
With many online commenters this would be a form of campaigning. It hardly matters if Turnbull said he would or wouldn’t do certain things, it can still be argued the NBN fails when the Coalitions new plan (or lack thereof) takes over.
Dropping a chill pill or 2 isn’t likely to happen any time soon.
Still, at least a meta-story on the NBN keeps the NBN discussion going.
I tend to agree with 7T, the LBN will probably be as successful* as most other telecommunication projects in Australia prior to the “real” NBN. I think that because Malcolm wants to use the same rules/environment that applied to them.
It’s a real shame Malcolm feels he needs to mess around with what has consistently been shown to be a popular policy, just so he can return us to the wild west that the industry was in the 90’s.
*as in “half assed attempt” i.e. HFC from Telstra and Optus; ADSL2/2+ roll out which required major intervention from the ACCC to even get started and which still didn’t mean all Australians can get it; et al.
@seven_tech
‘ the fact is, dozens of commentators over the 6 months since the Coalition released their alternative policy have shown an open-competition, FTTN based NBN does not have a business case’
No commentators have provided opinion that the Coalition plan does not have a business case because they have made assumptions how the policy will work on behalf of the Coalition, in the same way commentators had provided opinion that the Labor NBN did not have a business case.
Also Labor had multiple Business cases, it was hard to pin down which particular Business case with its constantly revised downward rollout figures and redefining of terms to meet targets was the ‘one’, and that includes the final one that Labor sat on before the election (we know now why they did that eh?).
‘ But there is a mountain of evidence to suggest that, on current trajectory,’
Sorry, some opinion based on conjecture of how the Coalition policy will be implemented does not immediately translate into ‘a mountain of evidence’.
‘It’s perfectly possible that trajectory could change. But then why hasn’t Turnbull indicated that?
Because he is waiting on the reviews to indicate if it needs to change or not.
‘ And no, I don’t take “because I was in Opposition and didn’t have the data” as a relevant excuse. 90% of NBNCo’s datat was publicly available. And their assumptions.’
Labor changed their mind after the 2007 election, or is only Labor allowed to modify policy post election? (if you call changing from FTTN to all FTTP just a modification)
‘If internet bloggers can do demand basis and revenue projections with facts publicly available, why can’t the former banker and lawyer and shadow communications minister?’
Perhaps MT wants to look beyond conjecture as a basis for those predictions?
It is not extensive, but please see the paras under ‘Wholesale vs market’ and ‘Down the track’ in the article at this link.
https://theconversation.com/nbn-cos-board-members-resign-but-why-18515
@seven_tech makes comments that I agree with. I do not think it is being intentionally set up to fail. However, there is little hope for NBN Co and equitable infrastructure as the Coalition currently envisions it.
Very true Karl, we can’t read each other minds ;) This culture of misinformation in a time when globally we are screaming out for transparency is nuts! I noted when I first read it yesterday the last sentence was – ‘Mr Turnbull’s office declined to comment. Dr Switkowski could not be reached.’
Hey ‘Meh’,
you might want to try hitting the ‘reply’ button if you want to reply to people’s individual posts ;)
Renai
Yeah ok Renai, my eyes missed that hyperlink ;)
A minor point (perhaps as bad as folks that correct grammar) – can you please stop calling Mr Turnbull “Earl of Wentworth” or “Duke of Double Bay” or other ridiculous false-titles? I fail to see what they add to the commentary.
Apologies, but no, I can’t do that. I personally find it amusing, and I’m well-advised that a number of other people do as well ;)
I think we need to find more. How about the Raj of Rushcutters Bay? The obvious one, King of Kings Cross, just sounds dicky.
Wizard of Wentworth was one of my better efforts.
Besides, it’s fitting given the magic that will be required to unpick the unholy mess NBNco will be left in. Sure, sweep out the board if you want fresh blood (and potentially people who might agree copper is less fattening than fibre) but don’t toss the entire business case out with it.
Oh well can’t have you missing out on a laugh I guess, just reminds me of his breathtaking arrogance.
Apologies, but no, I can’t do that. I personally find it amusing, and I’m well-advised that a number of other people do as well ;)
I find it pretty amusing my self :)
His middle name is “Bligh” by the way (same spelling as the last name of William Bligh the Commanding Lieutenant of HMS Bounty fame), I’m pretty sure that will come in handy one day :o)
Got to find a laugh where we can these days, know about Bligh so I might start cooking something on the back burner ;)
Got to find a laugh where we can these days
Not wrong there ;o)
Renai
I note you penchant for alliterations when it comes to MT.
Or, Malcolm does not yet have a worked out plan, or one he is willing to be public about.
@Paul Krueger
This is the most likely, because I feel he is being told his current plan, regardless of FTTN being “cheaper” isn’t viable as a business. We all knew the current plan, in exactly as Turnbull as stated, was not how the NBN was going to proceed.
What we need to wait for now is what is the likely direction of the NBN. I think it’ll be many many months before we know that.
There’ll be lots of hand-waving and “free market” going about in the coming months and years, I’d predict.
Of course he can. He had a fully costed plan in August last year, how could it have been fully costed if he hadnt figured out a plan?
Guys? Hello? This thing on?
No one can be told what the plan is. You have to see it for yourself.*
* unless you appoint military leadership, in which case..
Hmmm…If Malcolm appoints a 3 start General to run NBN Co….Presto Chango! It can be run however he wants and no one can say anything about it due to “National Security issues”!!
Turnbull: “Hello is this BT? Yes I’d like to know when one of your FTTN team can build me a FTTN network. Oh you’re busy? Ok. Well I’ll call back later I guess….”
There’s his “plan”
Well.
That press conference was almost entirely devoid of useful information.
Only part that was interesting was that about 900 000 premises are likely to get FTTP as a result of previous design.
Ahhh, 60 days from a change of management at NBNCo. not from change of government.
The weasel words begin….
You caught that one too lol.
Also noteworthy talking about changing to fixed line VDSL in some wireless areas after telling us wireless is the future and the internet is becoming a wireless internet.
With the board resigning, doesnt that mean the board has changed effective yesterday?
I heard that Turnbull hasn’t accepted the resignations yet, despite being the person asking for them?
When I read the ABC online article this morning my first impression was this is a case of ‘you can’t quit, your fired’.
yes I know you’re type quickly between work
@7T, wasn’t the original LNP proposal to provide FTTP to circa 2.5 Million premises? That was the 22% fibre figure, no?
Now it’s been scaled to 900K??
Most of the 22% was expected to be greenfields sites built over the rollout period. Apparently its cheaper to put fiber in as its built, rather than put copper in and then rip it up a few years later.
except that Turnbull has “sorta” indicated that those in the “1 year Rollout” were in the 22%.
Weasel words?
@Fat Pat
The 22% includes 9% on copper too badly damaged to be economically used and about 1 million Greenfields premises (about 10%) over the next 7 years.
That doesn’t leave 9% (900 000) for the currently planned FTTP. So clearly the new policy will have higher than 22% FTTP. Unless he changes his mind again….
I went through the numbers a while back and suggested that, depending on how the “we will honor existing contracts” approach went, we could be seeing something like 40% of the population on FttH, or near that tech enough to not matter. 9% poor copper + 10% greenfields = 19%. Add ~10% more for existing contracts and you’re at 30% right now.
Toss in 30% of the remaining 70% being MDU’s and likely to get FttP (near enough to FttH for this debate) and you’re over 50% At what point does it become simpler to just give it to everyone?
If there IS a backflip, I can see it being an extrapolation of those numbers. There’s simply too little savings in FttN for the remaining sub-50% to be turned into second class citizens.
Is there a link to the conference or a transcript somewhere?
My googling is turning up nothing :(
@seven_tech
‘Only part that was interesting was that about 900 000 premises are likely to get FTTP as a result of previous design.’
Many months before the election the Coalition stated all FTTP build contracts would be honoured, so they get into power and all FTTP build contacts continue on as they stated.
So as far as the FTTP rollout is concerned everything is continuing on as if Labor had won, the problem is what?
I’m sorry Renai, but you’ve got to call bullshit on that one from the press conference:
“I’ve never attacked any of the NBNCo. board personally, individually”
That is clearly a lie.
No, he’s trying to reframe the question so he can answer.
He’s not attacked personal traits, per-se. He has however openly attacked the competency and professionalism of both Quigley and McKenna. One could argue that also could be considered an attack on the person, rather than the entity.
Either way, it’s still a jerk move.
Malcolm saying “I am also puzzled why he has made several, self-serving and false statements” isn’t him saying Mike Quigley lied?
How is calling someone a lair (someone that makes “false statements”) not an attack on their character?
Maybe he was talking about individually as in by himself. He always had a group attacking them ;)
Having said that, he’s come awful close to crossing the line into personal attacks; I remember the Alcatel-Lucent bender Turnbull went on:
http://www.businessspectator.com.au/article/2011/5/17/technology/turnbull-shows-his-quigley-colours
I think what also got up everyones noses yesterday was news of News Corp newspaper revenue falling by $350m let alone it’s goodwill value. All of the talk that News Corp wasn’t campaigning against the ALP government because the NBN was a threat to Foxtel but that in fact there were business opportunities for Foxtel in the NBN did not fool anyone. The SEC filing that came out yesterday also talks about what changes to Australian media regulation could impact on the Company’s Australian business and it’s shareholders. Nobody likes being treated like an idiot.
One claim Turnbull made in his presser is that he doesn’t know what it costs NBNCo to currently connect each premise.
Strange. Turnbull has been adamant for months that the NBN rollout would cost $94bn. And a large part of this estimation was based on a per-premises figure of (as I recall) $3600.
So he’s gone from being arrogantly adamant to being ingenuously ignorant. What a performer!
By inference, his now hands-on-heart advocacy of a review (Libs love reviews as much as Labor – LOL) leaves room for a complete about-turn. Don’t be completely surprised if he announces in a few months time that, after careful consideration, he has found ways of fine-tuning the process and FTTP can go ahead after all.
Even so, he’ll screw it up – TPG and friends will have cherry-picked the CBD’s while Turnbull mulls over his “review”.
Anyway, we shouldn’t worry. In the long run (like as in, say, thirty years) an FTTP network of sorts will surely exist – built, rebuilt and overbuilt by a hodge-podge of market carpetbaggers and government know-alls like Malcolm Turnbull.
it’s a godawful, mess of a bastard child of Labor’s pure NBN vision, mixed with poisoned politics.
Now there’s a statement I think we can all get behind :o)
Whilst I wouldn’t say Malcolm Turnbull is ‘trashing’ the NBN, he is certainly not setting up a good position for what he has promised.
And that is “an independent audit of NBN Co’s books, a review of its commercial progress and a Productivity Commission inquiry into broadband policy”
How is there going to be an effective independent audit when those responsible have been sacked?
It won’t exactly be “independent” and open to public scrutiny if he’s going around firing those people who are in the know, and are in a position to say something.
Once they are out of the job, they will be under their NDA or exit clause of their job and won’t be able to say anything.
The Draft Corporate Plan (June 2013) has been leaked. Among the many interesting details is this statement:
“As at 30 April 2013, 26% of NBN Co’s FTTP End-Users were on the highest available wholesale speed tier (100/40 Mbps), whilst 47% were on the entry-level wholesale speed tier (12/1 Mbps). These compare with 18% and 49% respectively forecast for FY2013 in the 2012-15 Corporate Plan.”
This clearly demonstrates how wrong so many NBNCo supporters who have posted here are about how the NBN will be used, and justifies the building of a FTTN network because at 50Mbps in 2019 it will be more than adequate for 50% of connections.
@MAtthew
Wow. You spend you days desperately looking for a way to inflate your own points don’t you?
I’ve said this to you on Whirlpool and I’ll say it here- that 50% includes multi-connection premises. ie. those that take a phone and broadband service in a bundle. The Draft Coprate Plan even says as much on page 98:
Exhibit 15-5 illustrates that the proportion of 12/1 Mbps End-Users has increased progressively each
month since December 2012. This largely reflects the impact of some Service Providers launching
retail voice services on the NBN in late 2012 and the approach being taken by a number of Service
Providers to migrate their existing customers across to the NBN on a ‘default’ 12/1 Mbps service
initially.
This shows NBNCo. knew that 12Mbps products (that’s not 12Mbps the BB service, but the 12Mbps product) would be over-represented in the market because of those who wanted a UNI-V service. It does not prove, in any way, shape or form, that only 50% of customers want 12Mbps as a BB speed.
There is no indication FTTN will be any different if they were to provide the same service (12Mbps UNI-V bitstream phone service). But the % who took the higher plans, 50Mbps and up, would be considerably less because FTTN cannot provide those speeds to all who want it. Revenues will therefore be significantly reduced (as it is the top users who actually carry the highest revenue load for the system) and the business case for the NBN as an FTTN affair, would be significantly eroded.
I thought it clearly demonstrates a greater demand for higher speeds than was forecast.. you see what you want to see.
So you’re just going to ignore the fact that it’s 8% higher than forecast on the 100Mbps tier as per your own quotation?
We never asserted that it was laughably wrong, only that it was conservative, that is erring on the side of caution. The data provided does not contradict this Mathew.
Also, given that 26% of users are opting for a tier that will not be possible on the majority of FTTN connections , which ignoring the obvious problems with the difference in rollout footprint and demand, is 4% more than what Turnbull is allowing for, and they’re doing that right now without a usage justification, how precisely does this present a justification for FTTN?
I’ll give you a hint, it doesn’t. The justification for FTTN is what it always was, a way to save in the short term by recycling an existing asset.
There aren’t any justifications for FTTN apart from blind ideology.
Direct fibre on demand exists for those who want faster speeds and it will be cheaper because it won’t be building an extensive under utilised network.
Weren’t you predicting 50% would need FoD speeds by 2019? Sounds like an very expensive solution come 2020+ Or is that another Mathew?
Matthew, Fibre on Demand does NOT exist under Turnbull’s policy. It’s another one of his bullshit thought bubble style rantings that will just be swept under the carpet and ignored.
It’s only “cheaper” in the sense that buying one of something is cheaper than buying ten of something. What a foolish argument. If you buy in bulk, it’s cheaper per unit. So which is cheaper, buying one of something ten times, or buying ten of something once? Your wilful ignorance is exasperating.
I think you need to learn something about about economies of scale and total cost of ownership for the consumers. Because you’ve consistently demonstrated you don’t understand either.
Perhaps you can tell us how it works in this situation?
I have, as have others, to both him and you, on multiple occasions.
I have explained how economies of scale reduces the per premises cost of FTTP compared to FoD.
I have explained how the Mathew has not adequately explained how the TCO of FoD is less than FTTH.
Why should we continually repeat this argument?
That argument, where the assertion is that by providing FTTP to all even if they don’t need it is cheaper than providing FTTN with a optional upgrade to FoD of which the residence pays for anyway, for the immeasurable few that want it.
Your economies of scale would only apply if about 90% of all FTTN residences immediately order FoD within weeks of receiving an active FTTN connection.
Of course economies of scale applies to a FTTN rollout as well, it’s not a only a FTTP unique thing, even more so for FTTN because of the economy of scale of using existing infrastructure.
26% of those offered the NBN speeds that the current iteration FTTN under the proposed roll-out conditionsis not technically capable of to the majority of premises is not an immeasurable few.
Your implication here that I was implying that this would somehow make FTTP cheaper than FTTN, hardly. It would only make the business case, considering the tens of thousands (yes, only that many might be enough to tip the balance), of FoD requests bring the CBA of rolling out FTTN in question.
Economy of scale of using existing infrastructure? That doesn’t even make any sense. Economies of scale mean that you can spread the fixed costs thus reducing the per unit cost. The ability to leverage of existing experience or assets is does not provide an economy of scale advantage. It provides another type of economic advantage, known as sunk cost.
And I never said it didn’t. You are trying to put an argument into my mouth, as your always do, since obviously arguing that FTTH can be cheaper than FTTN is easier than trying to argue about opportunity cost, CBAs, and demand.
That argument, where the assertion is that by providing FTTP to all even if they don’t need it is cheaper than providing FTTN with a optional upgrade to FoD of which the residence pays for anyway, for the immeasurable few that want it.
If Telstra want $13b for the copper, your whole world will invert, wont it ;o)
But seriously, and thinking ahead to the not so distant future, how much do you think Malcolm’s FTTN will cost to upgrade to FTTP (like he has said he will need to)?
Having seen this ploy used many times by a number of generic node nerds, it seems apparent that thay ask the same question over and over (even after having been answered umpteen times and unable to refute) simply because they can’t rationally explain why they support FttN other than … err, Coalition good.
Say something enough and it starts to stick. Doesn’t matter if it’s actually a fact or not ;o)
Mathew, underutilised at what point? Now? 2019? 2025? 2050? At what timeframe do you think a FttH network would be underutilised?
This is an important question, because at some point in the future, the standard connection is going to need what FttH can offer, and FttN cant, and that point isnt as far away as you seem to think.
This is a key reason why people call the FttN rollout a waste of time and money – by the time its built in 2019, that 26% on 100/40 isnt going to be any lower, so what will the percentage be? Point being, those without the option are going to be screaming for faster speeds, and being expected to pay thousands for it.
I hope you’re one of those people, so you can experience first hand how wrong you are.
Mats outlook is to ditch speed tiers. Pretty well every post you see from him is driven by that.
It’s a pretty immature outlook (as in “Young and idealistic”, which isn’t a bad thing, just unrealistic). The reality is, a communistic approach to broadband just wont work in this country (IMHO), peoples greed would bring such a system to it’s knees.
While we live in a capitalistic based society, there will always need to be a “cost” until people can think of others.
Thats just the way folks are “built” I guess…
Que Mathew?
“As at 30 April 2013, 26% of NBN Co’s FTTP End-Users were on the highest available wholesale speed tier (100/40 Mbps), whilst 47% were on the entry-level wholesale speed tier (12/1 Mbps). These compare with 18% and 49% respectively forecast for FY2013 in the 2012-15 Corporate Plan.”
And you believe it shows us to be wrong? WTF…
1. NBN Co estimated 18% @ 100/40 but have surpassed this by achieving 26% (so almost a 50% improvement). Proving you completely wrong… exactly as we told you.
2. NBN Co esimated 49% @ 12/1, but this was an over estimation as this figure is 47%. Again proving you wrong… exactly as we told you. Although unlike some who are pedantic about their daily figures, I will admit there’s not much in these figures (as I am here to correspond rationally, not with an agenda).
But just how you can crow that we were worng (you right) and that it justifies FttN, in relation to your daily groundhog day spiel, flies in the face of the facts.
I do like the way you guys still have to keep bagging the soon to be defunct proper NBN though, as you have nothing positive to add re: the inferior, similarly priced (gov wise) and IMO utterly ridiculous clusterfuck FttN plan….
My honest opinion on the Liberal Party opposition to the true NBN is that they did not want to allow another Labor Legacy piece which would be another example of the foresight and value of Labor. Such things today are already used by Labor such as working conditions, superannuation and Medicare.
The problem for Malcolm is that in dismantling Labors Legacy, he may well create a new legacy for the Liberals which will stay with them for quite some time.
The problem for Malcolm is that in dismantling Labors Legacy, he may well create a new legacy for the Liberals which will stay with them for quite some time.
Having been a voter for 30+ years, trust me, the Liberals already have that legacy sown up….
Renai, you say, “But let’s not demonise Australia’s new Communications Minister for doing precisely what he said he would do, upon taking office.”
I don’t think that doing what he said he’d do (i.e. trash the NBN) excuses him from being demonised.
I was going to make an analogy like If North Korea says they are going to develop nuclear weapons, and then actually do it, does that excuse them for doing it? but whatever analogy I make tends to hyperbole.
Reductio ad absurdum is a legitimate logical argument. You test his premises by presenting a logical extension of his argument that he can’t actually agree to – thereby demonstrating that his logic is flawed.
No, no it isn’t.
If you’re presenting a logical conclusion you are, by definition, not reducing to the absurd.
“Turnbull’s not “trashing” the NBN”
….yet. He still has to appoint a new board of stooges……oops I mean directors. Then the Great Australian Node Lottery can begin in earnest. The trouble is that it’s a colossal swindle – all of the people actually paying to participate will end up losing.
Comments are closed.