analysis The ongoing stoush over how the Coalition’s Broadband Network should be deployed in Tasmania shows Australia’s broadband tangle at its worst: Construction contractors who don’t deliver, overly optimistic promises and estimates, and politicians playing petty power games with a highly important national infrastructure project. No matter which way you look at it, it’s a shocking mess.
If you look at the situation with respect to the Coalition’s Broadband Network in Tasmania from a 10,000-foot view, you might think that it’s easy to understand.
On one side of the boxing ring, with his clenched fists clad in sterling blue mitts and held up in front of his face protectively, stands Communications Minister Malcolm Turnbull, an evil glint in his eye as he defends the Coalition’s Fibre to the Node plans to significantly water down NBN Co’s broadband rollout in the state. On the other side of the ring is arrayed a crowd of opponents — Labor, unions, Greens, industry and even Tasmanian Liberals — all yelling angrily at Turnbull that they want a full Fibre to the Premises rollout for Tasmania.
It’s the sort of classic good versus evil dichotomy which the media consistently likes to apply to political battles; when conflict sells newspapers and drives clicks, all pictures will be painted in black and white.
I’m certainly not saying that the Coalition should pursue a partial Fibre to the Node rollout in Tasmania. My view is public and very clear: Tasmania deserves a full Fibre to the Premises deployment across the state. However, when you delve a bit deeper into the situation, it’s a little more complex than it appears, and I’d like to take some time in this article to illustrate some of the dynamics going on in the Apple isle when it comes to this issue, and why the whole situation is more of a mess than it appears at first glance.
The core issue in Tasmania right now is not, in fact, what style of broadband rollout the state will receive from NBN Co over the next few years. In fact, the core issue right now is how any kind of rollout will actually be delivered — who will do it, and how.
As Turnbull has pointed out, and as former Communications Minister Stephen Conroy has agreed, Labor’s external construction model for its former National Broadband Network project failed. In the populous eastern seaboard states, where skilled construction labor is more widely available — Queensland, New South Wales and Victoria — this has meant delays to Labor’s FTTP rollout.
However, in states with less resources — South Australia, Western Australia, the Northern Territory and Tasmania — the rollout basically collapsed entirely, with NBN Co being forced to turf contractors such as Syntheo entirely and start employing sub-contractors itself directly to reboot its deployment in many areas.
In Tasmania, basically the entire rollout of Labor’s NBN project was handed to one contractor, Visionstream. However, as Turnbull has pointed out (and there is quite a lot of evidence to back the Minister’s allegations), Visionstream has proved itself extraordinarily ineffective at getting work done on the Tasmanian leg of the construction effort, with its progress virtually grinding to a halt late last year.
Before the Federal Election, Turnbull explicitly promised Tasmanians that a Coalition Government would respect existing construction contracts signed by NBN Co. However, FTTN or FTTP, the problem now faced by Turnbull in Tasmania is primarily the question of whether Visionstream is actually capable of deploying either. Right now, Visionstream’s constract with NBN Co hangs by a thread, as the company moves forward with deployment efforts (PDF) designed to prove to Turnbull that it can actually get its job done.
Visionstream’s problems in Tasmania are, to a certain extent, understandable. As the contractor has stated publicly, Telstra has had issues with asbestos in its network in the state (PDF). Then, too, although Visionstream has 200 staff in the state, a substantial portion of the work is being undertaken by the company’s contractors. In a broadband-starved state such as Tasmania, where little telecommunications infrastructure has been deployed over the past decade, one can’t help but suspect those contractors are not yet experts in deploying fibre cables. It’s likely also that NBN Co’s management of the situation hasn’t been the greatest.
None of this is a solution for Turnbull. But if you look at the Visionstream relationship as being Turnbull’s key problem in the state, it does cast light upon the Minister’s public statements on Tasmania over the past several months. Virtually every statement Turnbull has made about the Tasmanian situation has been designed to put public pressure on Visionstream to deliver on its commercial obligations to NBN Co in the state. We saw this in October, when Turnbull said the Tasmanian rollout was “dead in the water”, specifically calling out Visionstream for its issues, we saw it in November when Turnbull explicitly blamed Visionstream for the issues, and we saw it again in February when Turnbull explicitly blamed Visionstream for the FTTN decision in the state.
Turnbull’s decision to conduct a further round of aerial Fibre to the Premises trials in Tasmania has nothing to do with needing new deployment data — as the CEPU has pointed out, plenty of trials have already been done, and the financial modelling can be done on paper — and everything to do with appeasing a displeased electorate ahead of the state election, as well as starting to engage with one of the two companies which could provide a viable alternative construction workforce to Visionstream’s: State-owned energy utility Aurora Energy.
If the Visionstream contract eventually fails, after all — and, as I mentioned, it’s on a thin thread right now — Turnbull will need to source an alternative. There are probably two main options for that at the moment: Aurora, which has been itching to deploy FTTP in Tasmania for a decade now and deployed the state’s TasCOLT trial, as well as some of the early NBN infrastructure — and Telstra, which owns most of Tasmania’s existing telecommunications infrastructure and also has its own workforce.
Turnbull knows that he can’t quickly get Telstra involved in the Tasmanian deployment, courtesy of the extremely complex negotiations which NBN Co is conducting with the telco on a national level at the moment. But he can hold the prospect of Aurora taking over at least some of Visionstream’s work as a knife against its throat; and that’s precisely what he is doing.
There are also additional complexities to the Tasmanian situation. For starters, its doubtful that the State Liberal Leader, Will Hodgman, is actually trying hard to convince Turnbull that Tasmania should have a full FTTP rollout, as he has stated. In fact, it’s much more likely that Turnbull and Hodgman, members of the same party, after all, came to an arrangement whereby Hodgman would call for FTTP to keep the electorate on side for the state election, and Turnbull would ‘reluctantly’ allow himself to be persuaded of the need for trials along those lines.
This is precisely the behaviour we saw from the Liberal Party before the September Federal Election, when Turnbull appeased Tasmanians by implying he would commit to FTTP in the state, without actually doing so. Local Liberals picked up the statement at the time and ran with it. But let’s get real: For ideological reasons, Turnbull simply has no interest in pursuing a full FTTP rollout in Tasmania, no matter how much sense it makes.
For its part, Aurora Energy is doubtless champing at the bit to be involved in the CBN rollout, both for its own financial success, but also because it has long believed FTTP is inherently the right thing for the state. Most electricity utilities across Australia do. However, as with its mainland siblings, Aurora is also probably underestimating the actual deployment cost of FTTP infrastructure. Most broadband projects initiated by Australia’s electricity giants over the past decade have gotten nowhere.
This has led to the farcical situation where Labor Premier Lara Giddings has publicly offered NBN Co access to Aurora’s power poles for aerial FTTP deployment. The cost? A piddling $25 million over 20 years, which Giddings and Aurora no doubt sees as a substantial commitment, but which NBN Co would see as a drop of water in the ocean of its billions upon billions of broadband deployment costs.
The last looming presence in the whole situation, of course, is Telstra. As I have previously pointed out, Labor’s NBN contractor model was highly unusually globally in that it is seeing an external company upgrade an incumbent telco’s network. In pretty every other country globally, the Government of the day has worked with the incumbent telco, usually separating it into retail and wholesale arms, and then incentivising it to upgrade its network, rather than taking on the task itself.
I personally strongly suspect that the external contractor model which first Labor, and now the Coalition, is pursuing with respect to NBN Co’s rollout efforts will eventually change drastically, and that Telstra will be brought in to oversee substantial slices of the upgrade of what is, after all, its own copper and HFC cable networks. In Tasmania, I suspect that this will eventually happen, as it will eventually happen on the mainland.
There would be a significant irony in this situation. Telstra has dominated telecommunications in Tasmania since time immemorial, even more so than it dominates telecommunications on the mainland. It must be amusing to the telco that successive governments continue to turn elsewhere for their construction efforts.
So where does this leave Tasmanian residents and businesses? Clearly, it leaves them in a mess.
The current NBN Co construction contractor in Tasmania is not delivering on schedule. The next most likely option is probably overly optimistic about its capabilities and costs. The Federal Government is playing politics with the population, implying FTTP verbally but steadfastly marching towards FTTN in reality. The two major state political parties are also playing politics with the rollout. Meanwhile, Telstra is waiting in the wings for its own stab at the situation. In short every stakeholder in this situation is marginalised, not able to deliver on its promises or just not listening to the Australian public’s will on the issue.
It’s a shocking mess. But then, that’s nothing new for the NBN. As I wrote 12 months ago:
“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.”
So what should happen in Tasmania? It’s fairly clear, to my mind. Given the universal political support for FTTP and the need for new industry options to boost the state’s economy, the Federal Government should mandate an all-FTTP rollout in the state. At least three contractors — Visionstream, Aurora and Telstra, as well as anyone else interested and who can demonstrate their capability — should be given the chance to prove themselves in small trial rollouts in small areas of the state, with evidence heard as to how they would extrapolate those rollouts across Tasmania. Then new contracts should be issued to one or more of these companies to deploy FTTP. If you want to pick the safe and secure (but probably costly) option, I’d go with Telstra. And of course, Aurora would be mandated to help with aerial FTTP rollouts, as it’s owned by the State Government anyway.
This would seem to represent a sensible way forward, although I’m sure there would be specific problems to deal with, such as how to cancel the current Visionstream contract. But then, nothing with respect to Tasmanian telecommunications has ever been sensible. Everyone concerned with the process seems too involved in looking after their own interests and not focused enough on the overall picture. It’s nothing new for Australia’s fraught broadband situation; but it is disappointing.