Labor demands Turnbull release NBN Strategic Review



news The Opposition has demanded the Federal Government release the Strategic Review report which NBN Co has conducted into its operations and possible future plans. However, the report has not yet been delivered to the Government, even in draft form.

The Strategic Review is being led by NBN Co’s Board and executive management. Its primary objective is to evaluate both the current NBN operational and financial performance as well as the timing, financials and product offers under alternative models of delivering very fast broadband to homes and businesses across Australia. Its recommendations will help shape the Government’s decisions regarding the future of the project.

Last week, NBN Co executive chairman Ziggy Switkowski told the NBN Senate Select Committee that the company would deliver the Strategic Review to the Federal Government today. This timeframe is in keeping with a pledge by Communications Minister Malcolm Turnbull that the review would be developed within 60 days of NBN Co having a new management team.

A spokesperson for Turnbull this morning confirmed the report had not yet been delivered. When it was, they said, it was likely to be in draft form. After the Government had time to consider the draft, a final version would be produced. This approach has largely become standard practice for the production of this style of report, under both Labor and the Coalition, although some commentators have criticised the approach for having the potential to undermine the independence of such reports.

In a statement issued this morning, Shadow Minister for Communications Jason Clare said it was “D-Day” for what he described as “the Coalition’s dud broadband policy”.

“The Coalition promised that if elected they would conduct a 60-day strategic review. It is now more than 80 days since the election,” said Clare. “It is time for the Government to release the NBN Strategic Review. The Government now has the Strategic Review, it was delivered to the Minister today, he should release it today.”

Clare said the Strategic Review needed to meet “the test set for it by the Minister himself”. Two weeks ago Turnbull said: “We want hand on heart true, realistic and achievable options prudently costed and scoped on which we can make weighty decisions.”

“If the Government is going to move to a Fibre to the Node model, the Strategic Review needs to provide realistic costs to fix and maintain the copper network they are going to use,” Clare said. “If the Strategic Review doesn’t provide this information it will have failed. If the Strategic Review team hasn’t got this information from Telstra and independently audited it, we will not know how much it will cost to build the Coalition’s second rate network.”

Shadow Assistant Minister for Communications Michelle Rowland added: “We need this information before any ‘weighty decisions’ are made to switch from Fibre to the Premises to Fibre to the Node.”

The two Shadow Minister said the Strategic Review needed to answer the following questions. “If the Strategic Review doesn’t answer these questions it will have failed to deliver,” Clare said.

  • How much is it going to cost to for NBN Co to access and use the Telstra copper network that will make its fibre-to-the-node model work?
  • What data has Telstra provided about the copper network? Has it been audited?
  • How much is it going to cost to fix/upgrade the copper network so that it is of a reliable standard?
  • How much is it going to cost to operate and maintain the copper network over the next ten years?
  • Does NBN Co plan to buy or lease the copper network from Telstra?
  • What plans does NBN Co have to utilise the existing HFC network?
  • How does the Government plan to plug the gaps in the HFC network?
  • Will the HFC network be made open access?
  • Given the Government promised to make the NBN easy to convert to a full fibre-to-the-premises network in the future, exactly how will this be done?
  • When does the Government expect this to happen?
  • When will agreements with Telstra, power companies, construction partners, and equipment vendors be completed?
  • How many nodes will be constructed and what will be the maximum distance between a node and a premise?
    What will the node cost to build, operate and maintain?
  • How will voice services be delivered in a fibre to the node model?

Although it is demanding the release of the NBN Strategic Review, the Opposition is also withholding documents relating to the NBN project. Last week, for example, the Opposition confirmed it would not consent to key Labor cabinet documents related to the NBN being publicly released, despite the fact that the documents are several years old.

Of high interest is a report a report produced by investment bank Lazard back in 2010 that warned the then-Labor administration of major risks to the NBN plan. Details about the report were recently revealed by The Australian newspaper, but the report itself has never been released publicly. It was one of a number of reports commissioned by the Government at the time and presents one view of the NBN. Other reports presented different views.

The refusal to release the document let Turnbull off the hook somewhat, as the Minister had pledged to consider asking his department to publicly release his incoming ministerial briefing document if Labor allowed key NBN cabinet documents dating from its administration to be released.

“Cabinet documents are kept confidential by Governments of both persuasions,” said Clare at the time. “If Mr Turnbull wants to change that convention, he probably should run it by the Prime Minister.”

In addition, Communications Minister Stephen Conroy initially refused to release NBN Co’s first business plan delivered in late 2010. At the time, the Greens and Coalition teamed up in the Senate to compel the release of the document, but the then-Labor administration proved reticent to comply. Conroy eventually relented and released the document under intense public pressure to do so.

I note that last week NBN Co executive chairman Ziggy Switkowski stated that not all of the NBN Strategic Review document may be published. Depending on how much of the document is withheld or redacted, Delimiter may seek access to the full document under Freedom of Information laws. This is important information that must be made public in order to inform the ongoing conversation about this national project. It must not be kept secret.

Image credit: Labor


    • The review includes ‘possible future plans’, as clearly pointed out…

      IMO, these are the parts most people are wanting to see.

    • They know what state the NBN is in; but they don’t have a detailed report of what NBNCo think it will cost to make an FTTN network, or maintain the copper.

      Because those things weren’t part of the plan; they were planning to bypass it.

    • Labor didn’t have to stitch Copper into the network.

      Labor also held a review, ended up selecting fibre and had the media (and industry) challenge every aspect and ongoing work, virtually daily from that point, forward – regardless of political leanings there are questions and considerations that are vital to any future network build.

      The report may touch on policy-sensitive areas and I am sure the temptation to not release, or heavily sanitise will be there.

      Frankly that the Government doesn’t see fit to release the Blue Book (which could have been damning for Labor, based on quite a bit of commentary) shows that this is far from a simple situation.

  1. So, any bets on some big announcement this week that NBN Co are opening up a whole *new* set of areas for FTTP – which will be delivered in near record time indicating the ‘technology agnostic credentials’ and superior (Mother?) project management credentials of the current Board and Government?

    Astute observers will immediately notice that many of these sites used to be on the NBN Co map before the recent ‘metrics change’ made by the new NBN or event areas that have not been on the map but commentators in Delimiter and Whirlpool have witnessed fibre being laid in the streets……

  2. I’m really not willing to make any bets. As much as I want to believe Turnbull will change to a FTTP roll-out, I also feel too much ‘wishful thinking’ is deluding my mind of something that will never happen.

    Time and time again, he has staked his reputation on the benefits of FTTN and trashed Labor’s FTTP solution. He’s all in now, and he ‘rigged the deck’ as much as possible with his cherry picking of the NBN board.

    Sure, they may say FTTN will take longer to roll-out then the LNP predicted, but Turnbull will then turn around and repeatedly compare it against Labor’s “$94 billion FTTP” solution that was “going to take decades to complete”.

    FTTN never made sense to begin with when you compared what LNP promised against what ALP promised. It was only when you allowed yourself to believe everything the LNP told was gospel truth, and everything from Labor was an outrageous lie. Only then did the LNP’s $30 billion FTTN make more sense than Labor’s $94 billion FTTP.

    The fact is in the election wars, the Coalition won, and they are now in a position to re-write history as the victors. They will make wild statements about how badly Labor’s FTTP roll-out would have gone if it was allowed to continue, and no-one can really say definitively that they are wrong. So FTTN might be completed in 2025, but LNP will still be claiming that FTTP wouldn’t have been completed until 2040.

  3. Some interesting facts in the ABS 8153.0 – Internet Activity, Australia, June 2013:

    1. According to the ABS 2011 census, there were 9,117,033 private dwellings with an average 2.6 people in each.

    2. At the end of June 2013 there were 12,408,000 internet subscribers in Australia with 9.678,240 (78%) classified as Household subscribers and 2,729760 (22%) Business and government subscribers.

    3. There are just 6.1 million total (household+business+government) fixed-line (Dial-up+DS+cable+fibre) subscriber connections The majority of these (4.8 million or 79%) are DSL. The ABS does not break down these numbers between household and business/govt. sector.

    4. There are 6.3 million total (household+business+government) wireless (Mobile broadband+fixed wireless+satellite) subscriber connection. The majority of these (6.2 million or 98%) are mobile broadband. The ABS does not break down these numbers between household and business/govt. sector.

    5. In addition, there are 19.6 million mobile phone internet subscribers

    So there are 12 million total premises but just 6.1 million fixed-line connections. Assuming the 2.7 million business and government subscribers have predominantly fixed-line connections, this leaves 3.4 million fixed-line connections for over 9 million households.

    From the above it appears that over 5 million households (>55%) are wireless-only households.

    This is implicitly confirmed by the following ABS data:
    1. The proportion of wireless broadband connections increased from 36% to 51% between June 2010 and June 2013 while the proportion of fixed-line connections dropped from 58% to 49% in the same period.
    2. The number of mobile phone internet subscribers increased by 13% to 19.6 million in just six months to June 2013 .
    3. Total fixed line connections increased from 4.2 million in 2008 to 5.8 million in 2013 (38% growth), while wireless broadband connections increased from 1.5 million in 2008 to 6.3 million in 2013 (320% growth)

    So here is the problem. The NBN Co.’s revenue projections are based on there currently being just 13% wireless-only households, increasing to 16.3% to 2025 and remaining at 16.4% to 2040.

    NBN Co. made this assumption based on a couple of user surveys from Roy Morgan and Ovum. The ABS data above was not available at the time the NBN Co. corporate plan was released. But if the ABS data is correct, the revenue forecasts could be out by 300%.

    • “From the above it appears that over 5 million households (>55%) are wireless-only households.”

      Does the report separate wireless-with-fixed from wireless-only? If it does not, then this assumption may be flawed.

      “But if the ABS data is correct, the revenue forecasts could be out by 300%.”

      Which would be exacerbated by a change in technology – assuming that’s the outcome of the, now overdue, report (and assuming the ABS data clearly delineated between wireless only and wireless + households).

    • The other thing the data may not show, are the reasons for the swing to wireless.

      Obviously wireless devices are far more prevalent and the proliferation of mobile phones will always continue this trend, but there will be causal factors in a percentage of cases.

      How many have changed due to factors such as fixed service quality/ availability? What percentage of wireless is actually to replace a ‘fixed’ service?

      Without contextual information, statistics have a habit of saying whatever you want to say. This is not to call into question your logic. At all. More that the absence of context makes it harder to draw concrete conclusions.

    • HI Steve,

      I think I’ve worked out the problem with your maths. You’re ignoring the fixed phone lines.
      The FTTP NBN plan included using the NBN for phone lines in addition to the internet connections listed by the ABS publication.
      Given there are approximately 8 million phone connections active with Telstra now, your calculations are ignoring about 2-3 million fixed line phone replacement connections. That addition would get you up to the NBN projected figures of about a 2/3rds take up rate.
      You might assume that these fixed lines won’t migrate to the FTTP network, but given the fixed lines are used by businesses, security systems, panic buttons, etc, that would be a rather heroic assumption to make.

      Hence the FTTP NBN business plans have a rump of 12mb subscribers indefinitely, representing the fixed phone connections.

    • In the suburb that I live in, all we can get is wireless (mobile) we are too far from the exchange. 10gig per month for $40 bucks, I can get 100gig download on ADSL for the same price, stats only give you part of the picture.

  4. The report’s figures are on subscribers. i.e. there are 6.1 million fixed-line subscribers (Dial-up, DSL, cable, fibre) and 6.3 million wireless (mobile broadband, fixed wireless, satellite) subscribers, in addition to 19.6 million mobile phone internet subscribers. Doesn’t mean that fixed-line subscribers don’t also have wireless subscriptions and vice versa, but if this is the case, then the revenue forecasts would be out by even more.

    The data is from all Australian ISPs. Essentially the data says there are 6.1 million fixed connections (or 6.2 million even if you include fixed wireless and satellite with the wired) and 25.9 million mobile subscribers.

    How would you explain 12.4 million total subscribers, >9.1 million households and only 6.1 million fixed-line subscribers? If not wireless-only, how are the remaining 5 million+ households accessing the Internet? I don’t want the statistics to say anything particular. Just looking for an alternative explanation that fits the data.

    • See my above answer regarding fixed phone lines.

      Also, there are vacant premises, in addition to wireless only households.

      Roughly it’s 1/6th vacant,1/6th wireless only, and 2/3rds subscribers.

      Additng 2 million fixed phone lines would cover the difference.

    • steve, I’m sorry to inform you that there’s a big hole in your understanding.
      From the table,
      “Internet subscribers by type of access connection(a)(b), for ISPs with more than 1,000 subscribers ”
      In June 2013, there were:
      6 150 000 mobile wireless subscribers (connections)
      6 063 000 dialup, DSL, Cable or Fibre subscribers (connections)

      In my house, there are:
      4 mobile subscribers (connections)
      1 DSL subscriber (connection)

      Do you understand?

  5. Thanks Lachlan As you rightly said, the NBN plan does assume 16% vacant/third-party premises, 12% wireless-only premises, 7% fixed wireless/satellite and 65% fibre subscriber take-up. 6.1 million fixed-line connections + 2 million vacant/third party + 1.5 million wireless-only + 0.9 million fixed wireless/satellite gives 10.5 million, which leaves 2 million. I take your point about the fixed lines used by businesses for security systems, panic buttons, etc., which aren’t specifically mentioned in the corporate plan.

    I presume these businesses/households would need to upgrade these security systems, panic buttons, etc. since these currently work on PSTN only. Wouldn’t businesses upgrade these systems to work over wireless or over the same NBN connection as other business applications, rather than requiring a dedicated fibre connection for each? thus resulting in fewer NBN subscriptions?

    Also, the 1.5 million wireless-only + 2 million vacant/third-party + 2 million phone-only premises gives 5.5 million (44%) premises to which Gbps fibre will be rolled-out but never used.

    • The flaw in your hypothesis is that a single person can be a subscriber to multiple methods.
      I myself have 2 wireless subscriptions and one fixed…but I glean 99% of my actual internet data from the fixed connection.

      I will add that it is a very good thing that so very little data is actually downloaded using wireless as it would be an unusable format if everyone went wireless only

  6. Chas, A single person subscribing to multiple methods does not change the point.

    There are 6.1 million fixed-line subscribers, of which 2.7 million are business/government subscribers. This leaves 3.4 million household subscribers and >9.1 million households.

    Even if each of the 3.4 million household subscribers has 2 additional wireless subscriptions, it does not change the fact that there are 5 million fewer fixed-line household subscribers than there are households.

  7. MikeK, Wireless can be secured by using a VPN.

    Wireless has dropouts, but the wired coverage is appalling as it’s use is limited to your home. Anywhere outside the home is one big dropout.

  8. Brendan, there will be causal factors in a percentage of cases. as you suggest due to fixed service quality/availability. However, note that fixed-wireless and satellite account for only 142,000 subscriptions, the remaining 6.2 million (98%) wireless subscriptions are for mobile broadband.

    While quality/availability of fixed service probably accounts for a small percentage, the difference between households and fixed-service household subscribers is >5 million (>55%) households, not a small percentage.

    • There are salient points above the address much of what you have claimed.

      Not all fixed lines have an internet service; you are assuming otherwise. Also a few of us have pointed out wireless doesn’t exist in a vacuum and that multiple service types can be used by a single person.

      There is quite possibly a gap; but I don’t think it’s quite the same degree.

  9. mikek, Mobile broadband is inherently secure. When you are using a mobile broadband connection over a phone network, you automatically employ the mobile provider’s built-in encryption when sending and receiving data. In addition mobile broadband gives you a Private IP address, which essentially means your connection sits behind the broadband provider’s firewall, giving you an additional layer of security. You can add additional security by installing a client firewall and using a personal VPN.

    • Sorry. It’s not. Recent history has shown it’s anything but. It still isn’t. It won’t be any time soon.

      It’s not 1985 anymore and the world is a different place.

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