news Communications Minister Mitch Fifield has described the previous Labor Government’s near-universal Fibre to the Premises approach to the National Broadband Network as a “fantasy model” and “unachievable”, despite the fact that almost all of the progress on the NBN thus far has been based on that model.
Last week the NBN company revealed its rollout schedule for the next three years. The NBN network currently reached about 1.3 million premises, with another 700,000 currently in the construction phases. The new plan contains another 7.5 million premises which will be being deployed over the next three years.
Many have welcomed the release of the plan, however it has attracted criticism from some quarters in Australia’s technology sector due to the fact that much of the progress over the next three years is slated to be made using technologies such as Fibre to the Node and HFC cable, which are technically inferior to Labor’s original Fibre to the Premises model for the NBN.
Shadow Communications Minister Jason Clare last week gave a speech in which he revealed that Labor would significantly up the amount of fibre being deployed by the NBN, if it won power at the next Federal Election, although he stopped short of detailing Labor’s actual plan for the NBN.
In several television interviews last week, Fifield roundly criticised the previous Labor model as well as the plans announced by Clare.
“Well, Jason Clare, the day before yesterday, announced that an elected Labor Government would revert to a full fibre network,” Fifield told Sky News (the transcript is available on the Minister’s website). “Now, what he announced had every single detail you could possibly want other than: when they’re going to do it, how they’re going to do it, and how they’re going to pay for it. So it will be interesting to see if, and when, Labor release that.”
“But look, we know theirs was a fantasy plan, theirs was a fantasy model. It was unachievable. What we have done, and full credit to Malcolm Turnbull as the former Minister, has brought order to bear in what was unbridled chaos.”
“What we see today is a concrete, realistic, achievable plan over the next three years to see a build for 7.5 million premises and we will have 9.5 million premises with the availability of nbn by the end of this process. Because at the moment, we’ve got 1.3 million premises who can access the nbn, another 700,000 under construction, add that to the 7.5 million and you’ve got 9.5 million – that’s a great figure.”
Fifield further told the ABC (transcript available here) that the previous FTTP model would take six to eight years longer to implement, at a cost of $20 to $30 billion more.
“Look, I pose this simple question, would you have more confidence in a program that was auspiced under the leadership of Malcolm Turnbull as Minister, or would you have more confidence in a plan which is really being driven by [Former Communications Minister] Stephen Conroy?” asked Fifield. “Jason Clare, good guy, we all like him, but everyone knows that Stephen Conroy’s really the person driving Labor’s nbn policy.”
“… there are many first world countries, European countries, who are also doing exactly what we’re doing – using that which is there. Using the infrastructure which is available. Using the infrastructure which is fit for purpose, things like HFC. So what we’re doing is not unusual or unique and it will provide the speeds that people need.”
However, there are several elements of Fifield’s statements which are highly contestable.
Although the Liberal Senator stated that Labor’s FTTP plan was a “fantasy model”, the truth is that almost all of the 1.3 million premises which currently have access to the NBN have access through the Fibre to the Premises technology which Labor instituted as the initial model for the NBN.
In comparison, in two years in power, the Coalition has made relatively little progress with its preferred technologies. The FTTN model is only now starting to be deployed, while the HFC upgrades are still in trial phase.
The NBN company under Labor continually failed to meet its early construction targets, but was also bedevilled by unexpected factors such as the presence of harmful asbestos within Telstra’s pits and pipes infrastructure and difficulties with construction contractors. With those issues largely being handled, the FTTP rollout under the NBN company is accelerating as the NBN company gets better at deploying FTTP infrastructure.
Similarly, it is believed that the Senator’s statement that it would take six to eight years longer to deploy a full FTTP network in Australia, at a cost of $20 billion to $30 billion more, is also contestable. A series of NBN estimates have previously found that an all-FTTP version of the NBN, like the Coalition’s MTM model, would be likely to make a positive return on the Government’s investment in the project and only take several additional years to deploy.
The only document which deviates from these estimates significantly is the most recent NBN corporate plan, released in August 2015. It finds, along the lines which Fifield claimed, that an all-FTTP plan would take six to eight years longer to complete than the Coalition’s MTM vision, as well as costing significantly more.
The NBN company based this conclusion on a high-level analysis which the Government requested it conduct. However, the company and the Government have refused to release this document, defying a Senate order to do so.
In addition, Fifield’s statement that there are “many” first world countries taking the same path as Australia with respect to upgrading their broadband infrastructure is also contestable.
The Minister is correct that a number of other countries are upgrading HFC cable and copper networks, using FTTN and other technologies. However, no other country is pursuing the same commercial model as Australia, where the Government is buying and upgrading legacy networks from commercial telcos. Instead, in almost every other country, the Government is incentivising incumbent telcos to upgrade their infrastructure, through direct subsidy or regulation structuring the industry.
Image credit: Parliamentary Broadcasting