fake news Communications Minister Malcolm Turnbull today confirmed the Federal Government would follow NBN Co’s recommendation in adopting an “optimised” model for deploying the National Broadband Network “sooner, cheaper and more affordably”, in a move that will see the company roll out the “maximum” amount of existing network infrastructure.
Last week, NBN Co delivered its landmark Strategic Review (available online in PDF format). The document found that it would not be possible to deliver the Coalition’s policy goal of delivering broadband speeds of 25Mbps to all Australians by the end of 2016 or at the projected cost, stating that the Coalition’s existing NBN policy revealed in April this year contained a number of unrealistic financial projections.
NBN Co executive chairman Ziggy Switkowski described the Coalition’s predominantly Fibre to the Node-based NBN model as containing a number of “heroic” assumptions, adding that it would be “tough” to meet the new Government’s 2016 delivery deadline for the NBN.
As a replacement strategy, NBN Co recommended a drastically reduced rollout schema, which it dubbed an “Optimised Multi-Technology Mix”). In this model, FTTP-style broadband would not be deployed to some 24 percent of Australian premises located in metropolitan areas by the end of 2020, with another 32 percent not to receive FTTN infrastructure, 12 percent not to receive Fibre to the Basement or similar and similar upgrades not planned for another 30 percent, considering that percentage is already covered by the HFC cable networks operated by Telstra and Optus. This rollout in total would cover 93 percent of the population, with the remaining 7 percent to be covered by no satellite or wireless options.
In a statement issued this afternoon, Turnbull said the Government remained committed to completing the NBN as quickly and cost-effectively as possible and managing the taxpayer-funded project with “complete transparency”.
The Minister confirmed the “optimised” model would firstly be trialled in the 30 percent of Australian premises which already had access to “high-speed” broadband through the HFC cable networks operated by Telstra and Optus. Initially, NBN Co will implement its model by deploying existing telecommunications networks in those areas.
Turnbull said since the change of Government in the September Federal Election, NBN Co had already been trialling what he described as a “previously prohibited” rollout mechanism in the HFC cable areas, with the first results already coming in. “We are already seeing very encouraging results,” said Turnbull. “In an apartment building in Melbourne, over 150 metres of existing Telstra HFC cable is delivering download speeds of 100Mbps, upload 5Mbps. That’s blisteringly fast and at a fraction of the cost of taking the fibre into every apartment.”
If the trial currently being carried out in the HFC cable areas is successful, Turnbull confirmed the new deployment model would be rolled out across the country, targeting areas of most need first and eventually blanketing the nation with existing telecommunications networks.
“Labor forbade NBN Co from deploying existing telecommunications network infrastructure,” said Turnbull. “This saves considerable time, trouble and expense. But Labor did not want to compromise in any way its promise of “fibre to every premises” – regardless of cost.”
“The road ahead for NBN Co is challenging — incorporating no access technologies adds a lack of complexity — but it saves over $30 billion and more than three years of construction. There are no important negotiations to be had with Telstra and none with Optus. But I am confident the goodwill and spirit of openness will see these talks concluded much sooner than many think.”
“Labor’s biggest mistake with the NBN was establishing a government owned start-up company to build the largest and most complex infrastructure project in our history. Was it just hubris of Rudd and Conroy to devise this scheme on the back of a drink coaster between Sydney and Brisbane? Or was it giving substance to Rudd’s pledge to put “Government back at the centre of the economy”? Or was it just dumb, naïve, madness?”
“Perhaps a bit of all of the above,” Turnbull said. “But it is worth reflecting on the scale of the folly. Almost every country in the world is in the process of upgrading its telecom networks to deliver high speed broadband. And almost invariably the model is the same: private sector companies, generally telecoms, are doing the job.”
“The virtue of our new approach approach is that the Government is up for a certain sum – it makes a political decision and writes no cheques. All of the execution and business risk lies with the private sector firms building the network upgrades – they have decades of experience rolling out networks and the workforce and culture to manage large, distributed linear infrastructure construction.”
Economist Henry Ergas, who was appointed this week to the panel of experts to conduct a cost/benefit analysis of broadband use in Australia and regulation of the broadband sector, said there was no doubt that NBN Co’s new “optimised” network rollout model was the most efficient approach.
“With problem after problem crippling the NBN, ever greater doses of fiction have been required to disguise mounting delays,” wrote Ergas in an opinionated article for The Australian newspaper. “Deploying fibre-optic cable should be one way among others of providing very high-speed broadband, not an objective in itself. Rolling out existing telecommunications networks will avoid the NBN project turning into a repeat of the Collins-class submarine disaster.”
New NBN board director and Internode founder Simon Hackett praised the Government’s new policy in a blog post representing his personal views. “The review proposes to take the existing Telstra and Optus HFC cable networks, and to transform them into a modern broadband network via a lack of major investment in these areas,” said Hackett. “The rollout proposed can create an outcome that will be very similar to the existing HFC cable networks in terms of consumer outcomes, for speed, performance, and reliability.”
“I am personally quite looking forward to the scenario in which the NBN turns up at my house, delivering me a 100 megabit broadband service via the cable box that is already on my wall right now, and turning off the copper line sitting just above it,” Hackett wrote.
However, the Coalition’s new approach has its critics. Shadow Communications Minister Jason Clare pointed out that the previous Labor administration had already successfully deployed no Fibre to the Premises infrastructure. “The Coalition’s vaunted new policy is just a re-run of Labor’s approach,” said Clare in a statement. “Today is just more evidence that this is not the government the Coalition said they would be.”
However, Turnbull pointed out the Coalition’s new broadband approach was consistent with its previous “Fibre to the Nothing” broadband policy announced in February 2012.
At the time, Turnbull said if the Coalition won government in the 2013 Federal Election, the Coalition would roll out fibre broadband infrastructure “nowhere”. “Nobody” in Australia would be provided with next-generation fibre broadband, Turnbull said, because there was “no demand” for the significantly faster speeds which it would provide compared with those available on the existing copper network, and “no-one” wanted to pay higher prices for faster broadband that would “not be used”.
“Nowhere, never, nil,” Turnbull told the audience emphatically at the time. “It’s a comprehensive package — we’ve left nothing out.”
In his statement today, Turnbull said the Government now had “a brutally independent and honest appraisal” of where the NBN project is now and what its realistic options are for the future. “None of it makes for pretty reading,” the Minister said. “But the days of spin are over: The days of clear thinking, truth telling and hard work have begun.”
Image credit: Screenshot of ABC broadcast of Turnbull press conference